Newly-installed renewable power in the EU mainly replaced expensive gas power rather than more polluting coal last year, according to analysis by an energy think-tank, and still fell short of what is required to limit global warming.
Coal power in Europe was down just 3 per cent in 2021 compared with 2019 pre-pandemic levels, far less than the 29 per cent fall recorded in 2019 when compared with 2017 levels, according to Ember, the London-based non-profit organisation.
The polluting fuel accounted for 15 per cent of EU electricity generation last year, compared with 22 per cent in 2017.
In the first half of 2021 — before the supply crunch pushed up the price of gas — newly-installed renewables predominantly replaced coal and nuclear power. But from July, the new clean power almost exclusively replaced gas.
EU power sector emissions that cause climate change would need to fall 6 per cent per year to reach the net zero level needed by 2035 but were reducing at about half that rate, Ember estimated.
“The current gas crisis should be a huge wake-up call,” said Charles Moore, the report’s author. “Both coal and gas need to go; and fast.”
Weaning the world off coal was a key promise made at November’s UN COP26 climate summit, and is seen as a key step in reaching global net zero emissions.
“Action is needed to ensure Europe’s coal phaseout stays on track,” said Moore. “Legislation is the only way to guarantee that coal plants are closed by 2030. Volatile gas prices have made it clear that you cannot rely on market forces alone.”
Fossil fuels accounted for 37 per cent of the EU’s electricity production in 2021, compared with 39 per cent in 2019. Renewables generated another 37 per cent, and nuclear made up the remainder.
As gas prices climbed, power generators sought to replace the fossil fuel with renewables as well as with coal. Prices rose so high that it was more profitable for power generators to switch to coal even though that meant they had to buy more allowances at higher prices under the EU’s emissions trading scheme.
The price of credits traded under the scheme, which allows the holder to emit a tonne of carbon for each credit, has almost tripled over the past year to around €90 per tonne of carbon.
The slowdown in the coal phaseout meant EU power sector emissions were not on track to limit global warming to 1.5C above pre-industrial levels, according to Ember’s analysis.
The International Energy Agency has estimated that being on track for that goal would require power sector emissions to reach net zero by 2035 in advanced economies.
Although EU countries including Spain and Greece have closed coal power stations since 2019, that has been mostly offset by increases in the use of coal in Poland.
However, the bloc’s wind and solar power generated more electricity in 2021 than gas for the first time ever.
The spike in energy prices has prompted some politicians and energy industry analysts to question the shift to renewable energy. But climate change experts have rejected the connection.
“I think that is completely wrong,” said Lord Adair Turner, senior fellow at the Institute for New Economic Thinking. “What we are facing is a failure to go fast enough . . . What’s happened tells us just how vulnerable we are to the [fossil fuel system].”