Maybe it is controversial, but in a world where a government pays an asset owner €52m in compensation to close a coal power plant whilst new coal plants are still being built, there is a strong case for keeping coal fired power plants open.

In Europe today there are 272 operational coal fired power plants with a combined capacity of 172GW according to data (including Turkey) from Europe Beyond Coal (EBC), a campaigning organisation seeking the phase out of coal in Europe by 2030.

This may not surprise anyone, but the fact that twice the capacity of new coal fired power plants were commissioned in the last decade as were commissioned in the decade before and the fact that there are 3 new coal power plants under construction in Europe, may come as a shock to some.

The narrative we are often provided is that China and India are building coal fired power plants whilst we in the west are building renewable generation interspersed with fantasies of nuclear (in the UK) and carbon capture and storage that won’t be required if we build all the renewable capacity. Whilst not strictly false, it fails to provide the whole story.

Of the current fleet, those built in the 1950s and 1960s may, in all likelihood, succumb to the perils of Covid 19 in concert with the headwinds of carbon taxes, political pressure, low demand and old age. But what of the rest of the fleet?

There is a very practical public and planetary health case put forward for the elimination of coal from our electricity generation mix, it is one that has been repeated many times and I shall not make the case again here. The response from Governments and industry has led to a planned closure of some coal fired power plants in the period from now to 2050.

The above graph shows the coal fleet capacity, by year of commissioning, at future dates with the following assumptions

  • No more plants will be built in Europe after those in construction are commissioned.
  • All plants are decommissioned at 50 (current average age, of the 75 operational plants over 50, is 58).
  • Based on published declarations of closures by companies and bans by Governments.


For some, these actions will not seem commensurate with the problems that they are seeking to address, principally the effect of greenhouse gas emissions on our climate, and they will continue to encourage governments to bring about outright bans on the burning of coal or encourage those that have already introduced such policies, to shorten the time in which they are enacted.

The countries included with the EBC data, together with their declared bans and currently operational capacity is shown below

Country Ban Capacity MWe
France 2022 3,202
Slovakia 2023 693
United Kingdom 2024 4,603
Ireland 2025 915
Italy 2025 7,912
Greece 2028 3,835
Finland 2029 1,885
Netherlands 2029 4,457
Denmark 2030 2,237
Hungary 2030 884
Portugal 2030 1,978
Germany 2038 44,619
Poland 31,307
Turkey 18,510
Bosnia & Herzegovina 2,073
Bulgaria 5,039
Czech Republic 9,690
Serbia 4,401
Slovenia 1,069
Romania 4,955
Kosovo 1,288
Montenegro 225
North Macedonia 675
Croatia 335
Spain 9,859

However, capacity can be a misleading metric as the overall energy generated from coal in the EU in 2019 was 570TWh, some 37% of theoretical maximum output. This was more to do with the economies of coal and Carbon than anything else, but it is an important factor when thinking about the end of coal fired power plants.

For some countries there is a natural end to coal use, the UK is a prime example. With an average fleet age of 53, the ban date of 2024 would see the youngest plant at the ripe old age of 52 (if it were still operating). Therefore, there is little resistance from the plant owners who have opted either re-develop the site or “convert” to alternative fuels (by convert, I mean completely re-develop the site, akin to a new construction in some cases)

In other countries things are a little more complicated. The Netherlands, for example, had five plants built between 1994 and 2016. The Government has recently reached a deal with one plant operator to close a 25 year old plant near Amsterdam which involved a €52m compensation package. At the proposed ban date of 2029, the ages of their operating fleet will be 13,14 and 14, no doubt the respective owners are already urging discussions about suitable compensation for their early closure.

If you do not fall into the camp that finds the idea of paying polluting industries not to pollute, by ceasing activity, slightly distasteful, how do you calculate a compensation package that takes into account future fuel, power and Carbon pricing and apply a suitable “should have known better” discount. After all, it can come as little surprise to anyone, that has been awake during the past 20 years, that coal is going to be legislated out of existence.

The real problem though, is the seemingly default position that these plants should close.

Despite the current surplus of generation, all assessments of our future demand to 2050 show a marked increase. The European Commission believes that EU annual demand will rise by 21% in the next 30 years. Here is how it believes that demand will be met.

GWh Gross electricity generation by source: 2020 2050 Change
Nuclear 772,986 736,532 -36,454 -5%
Solids (Coal) 767,262 251,549 -515,713 -67%
Oil 21,835 4,844 -16,990 -78%
Gas 580,999 835,542 254,544 44%
Biomass & Waste 213,112 391,380 178,268 84%
Hydro 375,589 421,101 45,512 12%
Wind 462,720 979,998 517,279 112%
Solar 154,722 428,535 273,813 177%
Geothermal + Other 8,461 14,254 5,793 68%
Total 3,357,685 4,063,737 706,052 21%

The drastic decline (but not elimination) of coal and oil will come as no surprise, nor will the proposed increases in wind and solar, the markets for which are maturing, and appropriately positioned developments are performing well.

The increase in gas utilisation may come as a surprise to many as it does not seem consistent with a decarbonising agenda. It is not clear whether the European Commission expect this to include viable CCS, but what we do know is that they are expecting a building frenzy from 2035.

Other oddities thrown up in the EC dataset is the significant uptick in biomass and waste combustion. It is not clear how biomass and waste is split in this dataset (or why they are together at all), but a close look at the data shows an anomaly in the 84% increase power generated compared to the 11% increase generation capacity. It should be noted that the information is taken from a 2016 dataset, therefore 2020 data is already forward looking.

The engine rooms of the anticipated biomass and waste revolution are Germany and Italy, each notching up increases of more than 40TWh of generation by 2050 with only nominal increases in capacity.

Data anomalies aside, there is a clear mismatch between the useful life of generating assets currently running on coal and the proposed dates that they cease to do so. Taking only the 78 plants with a useful life of 20 years or more, one can see that the early closure of these plants is a waste of perfectly good capacity, that must be replaced to meet a growing demand.

Factor in the costs to iron out the variability of wind and solar and the argument for utilising perfectly good stable generation capacity are very strong. But what about the Carbon?

Regional political issues around domestic coal production aside (and that is not to dismiss them as they are crucially important to the debate in places like Poland), it seems logical that governments should be engaging with asset owners to find the most cost effective way of reducing CO2e emissions from these plants whilst ensuring that the capacity is available to serve the economic growth they are aiming for.

In the above comparison, there is 48GW of generation capacity with a useful life of 20+ years, i.e. financeable, that should be looking at how to deal with the twin pressures of reducing CO2e whilst increasing utilisation.

The two obvious routes are Carbon capture and storage/use and fuel switching.

Carbon capture is difficult and/or disproportionately expensive. Whilst I know very little of the actual challenges, I can be confident in the statement because people have been talking about it for a long time, but no-one seems to have done it successfully at scale.

If it is technically viable, it may still take some time to adopt. In terms of cost, in a world where it is uneconomic to fire coal for the majority of the time, it will need some solid financial assistance to support investment. The good news is that the operational cost increases are probably quite stable and forecastable.

Fuel switching is, relatively, easy but does bring with it a host of further issues. Not least of which come from members of the community that berate operators (who have spent hundreds of millions of pounds to adapt very old asset to use biomass, and in doing so reduce fossil emissions significantly) because they are shipping biomass around the world (rather than coal). Ask Drax in the UK.

The cost of plant adaptation for fuel switching is variable depending on the plant and the proposed fuel. It can range from zero to hundreds of millions of Pounds/Euros. The cost of alternative fuel supply is also highly variable, again depending on the fuel, its location relative to the generation plant and its net fossil CO2e, if we are including waste derived fuels in this mix.

It may be that there are other factors at play in the €52m deal struck in the Netherlands, but it seems to me to set an uncomfortable precedent for closing down under-utilised, but otherwise perfectly usable, plants which could have a significant role in our energy supply and security mix over the next 25-50 years.

Instead, it would seem better value to provide a lifetime financial incentive that meets the twin objectives of reduced CO2e and increased supply, thus giving the operator confidence to invest in the plant and enjoy returns over the long term.

There are generic programmes out there aiming to deliver reduced CO2 of course, but a specific support package targeting coal fired assets that could make a useful long term contribution to the energy mix could provide the following benefits

  • Faster reduction in CO2e
  • Improved grid stability
  • Inward investment
  • Utilisation of existing sites (reduced public resistance)
  • Maintenance of jobs
  • Cost of programme off country balance sheet


Making the radical assumption that all plants in Europe under the age of 30 years were able and willing to adopt CCS or fuel switch by 2025, the chart below shows the potential increase in capacity whilst decreasing CO2e (variable depending upon the measures/fuel) compared to the current coal plant closure plan.

With the correct support package in place, these plants would be able to increase utilisation, thus displacing construction of new gas powered plant or other new biomass/waste to energy plants.

In summary, the best method that can be adopted to reduce our reliance on coal is to keep the coal power plants open rather than shutting them. With the right mechanism to support the owners to convert to low CO2e, these plants offer a cost effective, politically palatable, fundable and sustainable solution to our future energy demands.


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