Coal Resurgence Keeps Europe Illuminated During Cold Spell

Europe was able to keep its lights on this winter despite not having Russian energy, by burning more coal than it has in years.

The choice to consume large amounts of coal is a difficult one for European nations that had promised to move away from the carbon-intensive fuel in order to contain climate change. However, Russia's cut to natural-gas supplies after invading Ukraine and outages at French nuclear plants have spurred the revival of coal consumption.

The International Energy Agency has said that European demand is one reason why the world is on track for record coal consumption in 2022. The intergovernmental organization has said that coal will continue to be the global energy system’s largest single source of carbon-dioxide emissions by far, and that it expects global demand to flatline before falling after 2025.

The resurgence of coal as an energy source can be partly attributed to the effects of war. However, a flaw in Europe’s approach to transitioning to renewable energy sources has also played a role.

Europe has made significant investments in wind and solar energy over the past decade, while also closing dozens of coal-fired power plants. However, when it is cloudy or the wind is low, and demand is high, Europe doesn’t have the capacity to maintain electricity supplies from clean sources.

At that point, power prices rise to encourage utilities to fire up fossil-fuel plants. Gas mostly filled the gap in recent years, but coal has taken the lead of late. This is partly because Germany and other countries brought plants back online, and partly because gas is so expensive that it is more profitable for utilities to burn coal.

Paweł Czyżak, analyst at Ember, said that when there is higher power demand, coal is ramped up as much as possible and it jumps into the system before the gas plants. Ember is a think tank that aims to expedite the shift away from coal.

Coal use rose this month when icy, calm weather quieted wind farms and strained the electricity system, according to Mr. Czyżak. The European Union generated 22% of its power with coal and its sister fuel lignite, also known as brown coal, in the first two weeks of December, up from 17% in the same period last year and from the 15% average for the whole of 2021.

In Europe's interconnected market, coal power flowed across borders. This allowed for a more efficient allocation of resources and helped to lower emissions.

At times, Great Britain meets more than half its power demand with wind. However, on Dec. 11, that fell to less than 4% just as demand jumped, according to National Grid ESO. The power-grid operator ordered two standby coal units to warm up in case they needed to generate power the next day.

National Grid shut down its generators after high U.K. prices attracted power from other countries. Some of this power came from France, which imported it from Belgium, Switzerland, Spain, Italy, and Germany. In Germany, coal and lignite plants were running at full capacity.

According to EnAppSys Ltd, Germany generated 49% more power with coal and 6% more with lignite in the first two weeks of December than in the same period a year ago.

According to Jean-Paul Harreman, a director at the data analysis and consulting firm, the German decision to restart nuclear power plants is a security of supply issue for Europe as a whole. If the Germans hadn't delivered, the French would have been facing a problem.

Wind speeds and temperatures have increased in recent months, while several French nuclear reactors have come back online. However, meeting energy demand when renewables are not available is one of the biggest challenges facing governments and companies over the next decade, according to energy executives.

At this point, it is difficult to say which energy source is the likely winner between hydrogen and batteries. Pieter de Pous, program leader for fossil-fuel transition at think-tank E3G, believes that building more grid connections so renewable power can be funneled across borders is key.

Europe was on track to consume more coal for the second year running before the recent freeze. The continent has imported the fuel from far-flung producers including Colombia, Indonesia and South Africa after banning Russian coal as part of sanctions on Moscow.

Poland’s government has been supportive of coal as a way to keep the economy running, especially with the war going on in neighboring Ukraine. The country accounts for a large portion of EU hard-coal demand, and has had disagreements with Brussels over its desire to stay with coal plants and mines.

In April, after Russia cut gas supplies to Poland, the government lifted a ban on burning lignite and poor-quality coal at home. At an election rally in September, Jarosław Kaczyński, leader of the ruling Law and Justice Party, encouraged voters to “burn whatever was necessary to keep warm, except for tires.”

It is difficult to meet demand because Poland no longer imports Russian coal. Prices for the fuel have increased sharply, prompting the government to cap energy bills for 2023. Analysts say pollution levels will worsen if coal prices continue to rise, encouraging people to turn to alternatives to heat their homes.

Robert Tomaszewski, an energy analyst at Polityka Insight, said that whether or not Poland will have sufficient amounts of coal depends on how severe this year's winter will be.

Industry across Europe is increasingly relying on coal to keep operations running, as gas and power prices remain high. Evonik Industries AG recently extended the life of its coal-fired power plant at its factory in Marl to March 2024, after the invasion of Ukraine. The German chemicals maker had originally planned to close the plant, which mainly generates steam for chemical processes, in the summer of 2022.

Separate factories in Lülsdorf and Wesseling are able to burn oil instead of natural gas for power, said spokesman Richard Weiss. This provides a backup option in case of disruptions to the natural gas supply.