New emission limits for SOx, NOx, particulates and mercury under the updated EU IED (Industrial Emissions Directive) should officially be published this month. Until then, they can be found on the European Commission website. However, Euracoal, the European coal power lobby group, is already considering a lawsuit to halt these changes. The limits, specified within the BREFs – BAT (Best Available Technique) reference documents – are far stricter than current limits and are based on what has been deemed to be achievable in plants fitted with state of the art emission control equipment. Members of Euracoal argue that these “best available techniques” have no legal foundation, being open to interpretation and variable on a plant by plant basis. Further, BAT assessment does not take cost into account, meaning that some plants may face a far heftier bill than others. Over 80% of the existing coal capacity in the EU is not in compliance with the new limits and, to become so, the sector would require an overall investment of up to €15.4bn in retrofit technologies.
So, let’s look at the issues:
– Can power plants meet the emission limits within the 2021 timeframe?
– Can power plants comply in an affordable manner?
– Is compliance economically sensible considering the decarbonisation plans for Europe?
Can power plants meet the emission limits within the 2021 timeframe?
In simple terms, the new limits are set such that each plant must achieve the emission limits it would achieve if it were a standard plant installed with state of the art control technologies (BAT). However, the definition of BAT is open to debate – what works well to reduce emissions at one plant may not work so well at another. If the legislation simply required the installation of BAT, then the challenge would be entirely economic. But the legislation is based on emission limits which, in turn, are based on an estimate of what a plant should achieve once installed with BAT. And so there will be cases where plants are running in more demanding situations, with older boilers or higher ash and sulphur coals, where the installation of some standard BAT technologies will not necessarily ensure that the plants will achieve compliance. Technologies are available for most plants to meet the new emission limits, but in some cases this will require a combination of systems in series which adds to the challenge in both cost and operational terms.
In the past, there was leniency for more challenging coals but this new legislation seems less forgiving. The German Government has already requested corrections to the NOx limit at existing lignite plants where meeting the standard will be problematic. The issue is worse for plants which have derogated or received delays on retrofitting in the past, commonly for economic reasons, or which continue to run on sulphur-rich indigenous coals, which have previously been exempt from tightened SOx standards.
For the mercury emission limit, discussed in previous CCC reports and blogs, there are many issues to be addressed: – the questionable equivalency assumed between US and EU plants and coal; and concerns over the calculations used to convert the emission limit values.
Control technologies cannot be simply cut and pasted from one plant to another, and the unpredictable variations in performance for some control systems could prove costly. Further, if all plants are to comply – there are around 300 coal plants operational in Europe – then it is possible that the installation of control technologies required across the EU fleet within the next four years could be difficult in terms of availability of equipment and expertise, as well as a potential issue for the grid and security of supply in some regions where several units may have to come offline for upgrading simultaneously.
Can power plants comply in an affordable manner?
Coal plants in Europe are facing tightening legislation, increased costs and the knowledge that they are on a limited remaining lifespan. This makes investment in any new control technologies more contentious. Operators must estimate the remaining lifetime and potential income of the plant against retrofitting costs. Costs are high – the estimate for Poland’s compliance is >€2billion. Meanwhile the load factor of existing plants is dropping, wholesale electricity prices have fallen to levels which do not reflect the generation costs, and therefore the economics of keeping fossil fuel plants running are harsh. Recently, flexibility in coal plants has been “required but not rewarded” to balance out the grid receiving intermittent renewable supplies and large cleaner coal plants have lost out to smaller, dirtier, and less efficient units. When these dirtier plants close, the pressure on the remaining plants to produce more power, and to do so at more demanding points of peak demand rather than baseload, will squeeze the plant running costs to the point where investing further millions retrofitting under BREF for an unsure future simply does not make sense.
Economies such as Germany and Poland are currently dependent on coal, and not just for heat and power. The steel industry of Germany is the 7th largest in the world and is heavily reliant on coal. The coal sector is also a major employer in these regions and closure could lead to significant employment and related social problems.
Is compliance economically sensible considering the decarbonisation plans for Europe?
According to a Climate Analytics report, the EU must close all plants by 2030 if it is to meet Paris Climate pledges. Whilst the EU target date is still 2050, countries such as Finland, Germany and the UK have set deadlines within the next 10-15 years to close their entire existing coal fleet. Major energy companies in the EU have announced that there will be no new coal build in Europe beyond 2020.
If the new, challenging BREF limits lead to the early closure of coal plants, then meeting the Paris Climate pledges may become easier – but where is the baseload power to come from? The alternatives to coal in some countries is limited. Nuclear is being culled in Germany and cut back in France. Any new nuclear build, such as that in the UK, is controversial and prone to delays. Gas is reliable but can have cost and availability issues in many regions. Renewables are growing and are steadily becoming more affordable but they are still a long way from being reliable for baseload power. The EU may wish to phase out coal but may find that doing so in a short time frame simply isn’t practical.
The argument from lobbyists, several EU governments and coal plant operators, is that the new BREF limits are too much too soon. If coal is being phased out then the remaining operational coal plants, which will be required for baseload for the next 5-15 years, should not be expected to do so at a commercial loss – because they won’t.
Someone needs to sit down and do the maths. Where is the power to come from for the next few years? If, as predicted and despite the massive shift towards renewable energy, coal is still required to provide baseload power in some regions of Europe for a number of years yet, then keeping emissions down in the vital remaining coal plants must be achievable and affordable. Coal plants cannot be expected to invest millions in control technologies whilst simultaneously planning to close. Either we still need these coal plants or we don’t. This is not a simple problem to solve but it is an urgent, important and necessary discussion which must take place sooner rather than later.