Potential Closure of Coal Power Plants in Europe

The financial analysis and energy economics institute "IEEFA" stated in a report that the tightening of the European Union's regulations regarding polluting coal power plants may lead to exorbitant costs for improving these plants or the closure of one-third of them across Europe. This institute reported on Monday, May 7, that to comply with the new regulations by 2021, these facilities must either invest in optimizing coal power plants and reduce their operating hours to less than 1,500 hours per year, or shut down. In this regard, Reuters reported that EU members imposed stricter regulations on certain pollutants, including sulfur oxides and nitrogen oxides produced in large power plants in Europe, which cause air pollution and respiratory diseases, on April 28, just 11 days ago. Gerard Wynn, an advisor at the IEEFA who contributed to this report, stated that considering the market outlook and other adverse factors, the cost of compliance with these regulations is prohibitive for many of these facilities. According to the report, due to low wholesale prices, low energy demand, and the growth of renewable resources, coal power plants in Europe are struggling to remain profitable. In this context, last year, an unprecedented number of power plants with a total capacity of 10 gigawatts were shut down in Europe. According to Reuters, several EU member governments have committed to gradually phase out coal power plants over the next decade. To meet the EU's pollution control goals, under the Paris global treaty, one-quarter of the current coal power generation capacity in the EU must be shut down by 2020, and all of them by 2030. The IEEFA has examined about 600 power plants in Europe that use coal and lignite as fuel. According to these studies, 108 power plants with a total capacity of 56 gigawatts, equivalent to one-third of the EU's power generation capacity, produce a significant amount of sulfur oxides and nitrogen oxides, at least 40% above the acceptable levels set by the EU. Polish companies "PGE" and "Tauron", Italian company "Enel", Spanish company "Endesa", French company "EDF", British company "Drax", Greek company "PCC", and Czech company "CEZ" operate more than half of these plants. These companies are required to use nitrogen dioxide reduction technology, which adds 2 to 4 euros per megawatt-hour to the cost of electricity production. They must also use sulfur dioxide reduction technology, which costs 6 to 7 euros per megawatt-hour of electricity produced. When nitrogen dioxide and sulfur dioxide emissions from the plants exceed the permissible limits, optimization can add 8 to 11 euros per megawatt-hour to production costs. These costs will account for between 5 to 30 percent of the overall projected electricity sales prices in Europe in 2021, which is about 40 euros, placing a heavy burden on this industry. For older power plants, these costs will be prohibitive, making the closure of such facilities more reasonable.