Turning point in European power but coal protests value of CCS

The senior director of a New York-based international energy consultancy that has tracked European energy markets for two decades believes the EU’s phase-out of coal in favour of gas represents a turning point for the bloc’s energy market.

However the coal industry is insistent that carbon capture and storage (CCS) should continue to be relevant in their playing a part.

“This is a turning point in European power,” said Bruno Brunetti, a senior director of electricity at Pira. “This is a structural recovery in gas-plant profitability, not just a random uptick.”
Gas-fired power plant
Brunetti’s observations were made to Bloomberg in an article that noted the withdrawal of investment from coal-fired power plants. Norway’s $900bn wealth fund and insurer Allianz SE this year joined investors snubbing the fuel.

The International Energy Agency asserted that while coal is currently used to generate 41 per cent of the world’s electricity, almost twice that of gas, that share will drop to 30 percent by 2040.

Earlier this week at COP21 utility leaders came together to call for gas-fired power to be given priority investment over coal due to the former being a more environmentally-friendly means of keeping the lights on.

Such is the fresh confidence in gas that Centrica and SSE in the UK are bringing back mothballed stations. The news agency notes that the trend towards gas could better suit EON over RWE in Germany because 24 per cent of its domestic plants are gas-fired, compared with 16 per cent for its peer.

Meanwhile the coal industry has made some attempts at a response to the gathering momentum favouring gas and published a new report this week highlighting the importance of CCS technology to an effective climate agreement at COP21 in Paris.

The report “Carbon Capture and Storage – the vital role of CCS in an effective COP21 agreement” provides an overview of the road so far and calls for key policy initiatives to support the greater global deployment of CCS technology.

It calls for policy parity asserting that CCS must receive the same policy support that has benefitted renewable technologies in recent decades. The report says this is vital to facilitate the lowest cost pathway to decarbonisation.

Benjamin Sporton, the World Coal Association’s Chief Executive, said: “In building a low-emission energy future, policy makers do not have the luxury of picking and choosing technology “winners”. All technologies, including CCS, are required to build a resilient energy system and to meet climate objectives.”

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