Closing Coal Plants Important Signal for COP21 Summit

64 Dutch professors urge government to make climate progress
Closing Coal Plants Important Signal for COP21 Summit Closing Coal Plants Important Signal for COP21 Summit
Publ. date 23 Nov 2015
The Netherlands is the worst performing country in Europe in terms of energy and climate policy, according to recent research by the European Environment Agency in Copenhagen. When it comes to renewable energy, greenhouse gas emissions and primary energy consumption, the Netherlands scores bottom of the list in Europe. In order to start taking action on this, 64 professors wrote a letter to the Dutch government saying: shut down all coal plants.

Why the Dutch government should hurry

Past June, judges in The Hague reprimanded the Dutch government because of its negligent climate strategy, and ruled them to reduce greenhouse gas emissions by at least 25% by 2020 compared to 1990 – in line with international agreements. The Dutch Environmental Assessment Agency and the Dutch Energy Research Center claim this requires a significant intensification of climate policies. Having the major climate summit in Paris coming up, and being chased by the court, it is high time for the Netherlands to send a clear and sustainable signal for commitment.

Growth in renewables expels the coal industry

The most effective measure the Netherlands can take would be to close down all 11 coal-fired power stations. Not just the older stations from the 1980's, but also the newer ones - including the three most recently opened stations that have been put into use in 2015. The Energy Research Center has calculated the consequences of two scenarios: to close as soon as possible, by January 1st, 2017,  or to close in stages by January 1st, 2020.

The end of the coal-fired power era is inevitable, and closing all coals plants would mark this. The global coal industry is in big trouble and no longer economically viable, caused in part by the accelerated growth of renewable energy. The unattractive business case of the coal industry is for instance being recognized by Citigroup bank in the US. They foresee a gloomy future for the coal industry, which made Citi decide to phase out its investments in coal. Suppliers of coal are losing billions on stock markets in the US and Europe.

Other countries are taking action on climate change 

Experts in the industry expect that within 10 years all European coal-fired power stations will be closed. Great-Britain already has made the commitment to shutting down all their coal plants by 2025, and Germany recently decided to close eight of their large lignite-fired power plants. President Obama has started an attack on the coal industry as well, and since 2010 approximately 40% of all American coal plants have been closed. Within the coming years, Obama wants to close hundreds more coal plants and give a firm stimulation for the production of renewable energy.

Even China is no longer going all in on coal. Although the Chinese still want to build more than 350 coal power stations (which happens to be only half of the originally planned amount), the country's coal consumption dropped for the first time in 2014. However, actual emissions appear to be higher than reported. The local resistance against the polluting coal is increasing, and that is why China is investing massively in solar and wind energy. Currently, China has now the largest capacity of wind power worldwide, and the second largest capacity in solar energy, behind Germany.

On a global scale, a movement against coal has been set in motion. The OECD noted earlier this year that (new) coal power stations are the biggest (climate) threat to the world. Not only do they produce huge amounts of CO2, three times as much as the emissions produced by gas plants, they're also very polluting in the form of emissions of particulates, soot and heavy metals.

What happens when all Dutch coal plants are closed?

This raises the question: could the Dutch energy supply function without the use of any coal power stations? The answer is yes. The total net capacity of power plants in the Netherlands is approximately 33 GW. An estimated 20 GW is needed for domestic use by households and industry. Together, all coal power plants have a capacity of approximately 7.5 GW, and gas-fueled plants can deliver together over 20 GW. If all coal plants would be shut down, a spare capacity of 5.5 GW will remain. This means that all coal plants could be turned off tomorrow without causing any problems. In addition, the professors assume that the additionally required gas supply preferably is sourced in Norway.

By shutting down all coal power stations in the Netherlands, the country's CO2 emissions would decrease with approximately 15 megatons (Mton) per year, as the electricity from coal plants would be replaced with electricity from gas plants. The achieved CO2-reduction would be slightly less than 10% of  total CO2-reduction. This means that the Netherlands would meet its objective of 25% reduction of greenhouse gas emissions by 2020.

Moreover, it would lead to a substantial reduction of pollution. For instance, a large coal power station (e.g. Eemshaven) produces annually about 100 tons of particulates, 2 million kilograms of nitrogen oxide and 550 kilograms of heavy metals, including mercury. Coal plants contribute significantly to health damage from air pollution, more than other, alternative energy sources, including gas-fueled plants. Action is required, as air pollution is still responsible for over 400,000 premature deaths in Europe every year.

Obviously, under the emission trading scheme (ETS) arrangement, this decrease could also be compensated elsewhere in Europe, but this is the case for every CO2-emission reduction under the ETS emission ceiling (including CO2-reduction from growth in wind and solar energy). Hiding behind this effect of the ETS-system is a fallacy. After all, policy is able to take action by creating more tightness in the ETS-system.

The downside of closing coal-fired power stations

However, there are also disadvantages for shutting down the coal plants. For instance, the Netherlands will not achieve its renewable energy target in 2020, because of the fact that no more biomass will be co-incinerated in coal power plants. As a result, the estimated share of renewable energy in 2020 will be 10.8% instead of 11.9%, far below the target of 14%. According to the professors, the CO2 reduction target on the short term outweighs the renewable energy target on the long term. In fact, they state, continuing with co-firing biomass will slow the transition to sustainable energy. In addition, the incineration of biomass is under attack, because of the ever greater contribution to concentrations of particulates in Europe, as well as the existing concerns about the achieved levels of CO2 reduction, and the undesirable effect that subsidizing wood for energy has on the use of biomass for quality applications (cascading).

Moreover, the Dutch electricity price would rise with about 2-4 Euros per MWh. Calculated for an average Dutch family, that is about 10 Euros per year, which still is a small amount. And of course the involved energy companies are affected too, although the professors consider it as an investment risk for those companies. A future compensation by the government is not unthinkable.

When considering the costs and benefits at macro level, closing the power plants will cost max. € 800 million per year. However, savings from the SDE+ subsidy can be expected to amount up to max. € 500 million when biomass co-firing is determinated. Up to 2020, it delivers a net cost of an estimated € 300 million per year, which is feasible. And the societal benefits (like reduced CO2 emissions and less pollution) are not even included in the calculation yet.

Demonstrating sustainable leadership 

The closure of all coal-fired power stations is not only an effective measure, it is also an important signal from the Netherlands towards COP21. The professors believe that in the first half of 2016, in its role of the presidency of the European Union, the Netherlands should take the opportunity to demonstrate leadership.

While the coals plants could still be used under extreme weather conditions or in case of emergencies, closing them puts an end to the internationally incomprehensible paradox that one of the countries that will be affected the most by climate change, takes the least action about its climate strategy.

Therefore, the 64 professors call upon the Dutch government and the house of representatives to close all active coal plants in the Netherlands before the year 2020. 

This text is the integral translation of the letter of the professors. Click here to read the original letter (in Dutch). 

Image by: Kym Farnik

About Nikkie Vinke

Multidisciplinary advisor in ESG benchmarking, sustainability strategy development and execution. | nikkie@finchandbeak.com

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