LONDON May 8 Stricter European Union pollutant
limits could lead to costly upgrades or the closure of one third
of Europe's large-scale coal power plant capacity, a report by
the Institute for Energy Economics and Financial Analysis
(IEEFA) showed on Monday.
On April 28, EU member states approved stricter limits on
pollutants such as sulphur oxides (SOx) and nitrogen oxides
(NOx) from large combustion plants in Europe which can cause air
pollution and respiratory diseases.
To comply with the new rules by 2021, utilities will either
have to invest in new technology to retrofit coal plants,
restrict operating hours to under 1,500 a year or close the
facilities, the IEEFA said.
"The cost of compliance will be prohibitive for many of
these installations, given the market outlook and other
headwinds," said Gerard Wynn, consultant to IEEFA and co-author
of the report.
Europe's coal power fleet is already struggling to remain
profitable due to low wholesale power prices, weak energy demand
and growth of renewables. A record 10 gigawatts (GW) of capacity
closed in Europe last year and several EU governments have
promised to phase out coal next decade.
To meet EU emissions targets under a global climate pact,
the Paris Agreement, a quarter of current EU coal capacity needs
to shut by 2020 and all of it by 2030, the Climate Analytics
think-tank said this year.
Energy and environment economic research organisation IEEFA
analysed around 600 installations in Europe which burn coal,
lignite and biomass.
It found that 108 of those, totalling 56 GW of electrical
capacity and a third of EU coal-fired generation capacity, are
responsible for the most SOx and NOx emissions and are at least
40 percent above the EU limits.
Polish power companies PGE and Tauron, Italy's Enel, Spain's
Endesa, France's EDF, Czech Republic's CEZ, Britain's Drax and
Greece's PPC operate more than half of those plants.
These operators will have to use NOx abatement technology
which would add 2-4 euros per megawatt hour to the cost of power
generation and/or SOx abatement which would add 6-7 euros/MWh.
When plants exceed both NOx and SOx limits, retrofitting
could add 8-11 euros/MWh to generation costs.
"These costs range from 5 to 30 percent of expected European
wholesale power prices in 2021 (40 euros), a highly significant
burden," the report said.
"We conclude that in the case of older power plants
particularly, these costs are prohibitive, and that it would be
more rational to close the installations," it added.
(Editing by Edmund Blair)