EU Power Generators Warn Plan to Cut Use of Coal May Backfire

A group representing power generators across the European Union warned that the bloc’s plans to limit the use of coal may backfire, encouraging utilities to seek returns on new fossil-fuel plants instead of putting money into clean energy.

European Commission is considering a law that would effectively block many coal-fired plants from getting support payments under the region’s capacity market, which is intended to ensure steady supplies of electricity when the wind isn’t blowing and the sun isn’t shining.

Utilities would probably respond by building new natural gas plants, which while cleaner than coal, still produce greenhouse gases blamed for global warming, according to Eurelectric, the lobby group representing the big power generators. That, the group said, would leave the power generators focused on getting a return from new gas plants instead of investing in zero-emissions systems that could cope with variable flows from wind and solar farms.

“It will do the energy transition a disservice,” Kristian Ruby, secretary general of Eurelectric, said in an interview from Brussels. “What is overlooked in the proposal is that it can harm assets that are not coal-based. It will for example hit the fast ramp-up ramp-down assets that back up renewables when the wind stops blowing. ”

The EU law would block from the capacity market any electricity producers whose carbon discharges exceed 550 grams per kilowatt-hour, a level that would exclude coal from the system. The lobby group instead suggests lawmakers concentrate on fixing the EU Emissions Trading System, where the cost of pollution fell 70 percent since 2008 because of a surplus in permits used in the market.

EU wants to lead the global fight against climate change, which scientists blame for heating up the planet, and increase the bloc’s energy security by reducing dependence on imported fossil fuels. Its 2030 target is to cut greenhouse gases by at least 40 percent from 1990. It wants to boost the share of renewables to at least 27 percent.

“In countries where there’s currently a lot of coal, the proposal is going to force base-load capacity out of the market by the middle of the next decade while there’s no mass deployment of utility storage or batteries,” Ruby said. “It will create demand for gas, replacing old conventional assets with new conventional assets.”

The commission proposal is currently being discussed by the 28-nations bloc’s governments and the European Parliament. Their approval is needed for the law to be amended. Estonia, which holds a rotating presidency of the EU until the end of December, wants to propose a compromise by allowing a certain amount of power produced by utilities exceeding the 550-grams threshold to be used in capacity markets.

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