More than half of EU's coal-fired power stations losing money
08 December 2017
More than half of the EU's 619 coal-fired power stations are running losses, according to a new report. The industry's slow plans for shutdowns will therefore lead to €22 billion in losses by 2030 if the EU were to fulfill the pledge to tackle climate change, the report warns.
With the adoption of stricter air pollution rules and higher carbon prices, more plants are set to become unprofitable, according to the analysts Carbon Tracker, with 97 per cent of the plants losing money by 2030. Additionally, with renewables getting cheaper costs is likely to make building new wind and solar farms cheaper than continuing to run existing coal plants by the mid 2020s.
Utility companies continue to run lossmaking plants hoping that competitors will close their plants first or that governments will provide subsidies in return for guaranteed power, though the European commission is looking to ban such payments. Meanwhile, in Spain, the government has banned Iberdrola from shuttering its last coal plants, in the interests of energy security despite the country's overcapacity in electricity.
According to Carbon Tracker, coal is in a death spiral, in Europe, with seven nations including the UK already having announced the end of coal power by 2030 or earlier.
Meanwhile, power producers from the UK's Drax Group Plc to Steag GmbH and Uniper SE in Germany are already closing or converting stations away from coal at a record pace.
By 2030, 97 per cent of plants are expected to end up in the red as the EC plans to discontinue so-called capacity payments for coal by the middle of the next decade and battery storage technology improves to provide more of the power needed at peak times, according to Carbon Tracker.
''Coal is going to be put into a death spiral and there's not much that asset owners can do about that other than to lobby and hope that the state will bail them out,'' Matthew Gray, senior analyst at Carbon Tracker in London, said by phone, Bloomberg reported.