In another blow to the coal industry, the German Parliament has passed legislation that will see coal-fired power phased out of the country’s energy in less than twenty years.
As the EU aims to slash its emissions by 55% from 1990 levels and adopt a green recovery strategy, it will need to accelerate the pace of transition in the power sector, which accounts for the largest share of EU greenhouse gas emissions. Many expect that the clean energy sector will receive a significant amount of funding from the EU’s proposed €750 billion post Covid-19 recovery fund.
Fossil fuel apologists may argue that shutting down coal-fired power will have a negative impact on jobs and the economy, but the long term effects are expected to be positive as a green recovery builds a robust and resilient economic future. Funds devoted to ensure a just transition are widely in play. In order to compensate for the transition to a lower carbon energy future, the German Government is to provide €40 billion in funding to ameliorate the effects in coal-producing regions such as North Rhine-Westphalia, Saxony, Saxony-Anhalt and Brandenburg.
Environmentalists worry that the German target is set too far in the future to ensure meeting climate targets, but it is another sign indicating recognition of the need to shift away from coal. Some countries are achieving this more quickly than others. Spain, for example, which shut down its coal mines eighteen months ago has already begun to shut down its coal fired power plants. Seven out of 15 plants were closed at the end of June 202, because it doesn’t make economic sense to run the plants after investing to make them meet EU regulations.
The collapse in the price of wind and solar technologies has fundamentally transformed the economics of the energy system. In March 2020 Carbon Tracker reported that around 70% of operating coal plants were more expensive to run than new onshore wind or utility scale PV. Combine the changing underlying economics with the growing political uncertainty around the viability of fossil fuel assets amid growing concerns about the impact of GHG emissions in terms of pollution, health and climate change, and the future of the energy sector looks very different.
According to Antha N. Williams, Global Head of Environmental Programs, Bloomberg Philanthropies over the last three years alone , 15 European countries have committed to phasing out coal from their energy mix and over 130 existing coal-fired plants have closed or announced their retirement.
The fear of economic impact is a real concern, especially in the era of Covid-19. Done right however, and there is an opportunity for investment in clean energy to drive Europe’s green recovery as well as supporting the achievement of climate goals.
Bloomberg Philanthropies and BloombergNEF have released a report showing a viable economic path out of a coal-fired future. The report focuses on areas with a strong reliance on coal, showing the transformation possible in Bulgaria, Czechia, Poland and Romania .
At the launch of the report Frans Timmermans, Executive Vice-President of the European Commission said “To become the world’s first climate neutral continent, we have to turn the page on coal. Letting go of an industry that has provided jobs for decades will not be an easy process but Europe is ready to support it. Poland, Czechia, Bulgaria, and Romania can become leaders in Just Transition and switch from coal to clean while contributing to the industrial leadership of Europe.”
The intersection of innovation and global challenges such as climate change and sustainable development are driving change in the economy. A founder of The Net Imperative
The intersection of innovation and global challenges such as climate change and sustainable development are driving change in the economy. A founder of The Net Imperative Ltd and New Energy Finance (later bought by Bloomberg), author of Conquering Carbon: Carbon Emissions, Carbon Markets and the Consumer and a journalist for many years, I teach on the MSc Global Energy and Climate Policy and Finance, Sustainability and Climate Change at School of Oriental and African Studies at the University of London.