Approaching this summer’s midpoint, despite record-setting heat and continued drought in Europe, one positive development amidst the growing climate crisis is the sustained fall of coal’s generation market share throughout most of the continent. L. Michael Buchsbaum reports

Coal’s downward spiral

First, the good news: a new data analysis by the British NGO Sandbag reveals that coal generation in the EU has collapsed by some 19% during the first half of 2019, with drops in almost every EU country.

Though renewable wind and solar generation filled half of the void created by coal’s decline, the bad news is that the remaining generation reflects a switch to burning fossil gas, much of it imported LNG (liquefied natural gas) or fracked “Freedom” gas originating in the US. (To review LNG’s negative impacts, click here and here.)

Alarmingly, as coal generation in Germany has dropped, fossil gas burns have skyrocketed by over 60%, according to solar energy research institute Fraunhofer ISE. Though this shift has likely reduced CO2 emissions from German power plants by a third or more, these figures do not reflect fossil gas’ embedded emissions, nor the health impacts of fracking where it is produced (a subject to be covered in several upcoming posts).

While coal’s slice of the EU energy generation pie has been falling for sometime – down 30% from 2012 to 2018 – Sandbag concludes that coal will still account for some 12% of the EU’s overall 2019 greenhouse gas emissions.

Either way, “2019 may mark the beginning of the end for coal power in Europe. The biggest falls are by those countries building wind and solar and planning for a coal phase-out,” said Dave Jones, electricity analyst at Sandbag.

Germany is the biggest coal ditcher

Though all western European countries saw big percentage drops, the largest decrease in coal consumption in absolute terms has been in Germany. So far down 22% year over year, this has resulted in millions of unburned tonnes of both imported hard coal and domestically mined lignite.

In a big win for activists, Sandbag’s data shows that over two-thirds of the lignite reduction came from RWE’s Neurath and Niederaussem plants. These are supplied by RWE’s controversial and increasingly contested Hambach and Garzweiler mines, which are amongst the largest in Europe and sites of ongoing protests.

However, lignite-fueled generation has decreased at 32 of Germany’s 35 lignite-burning units, as the fleet no longer generates on a 24/7 basis. Nevertheless, Germany was still responsible for roughly 35% of the EU’s total coal generation throughout the first half of 2019.

Just this June, largely due to further switching from coal to fossil gas in Germany, net generation from lignite fell by 38% compared to a year ago, while power generation from hard coal fell by 41%, according to figures from the Fraunhofer ISE.

The East/West EU energy divide grows

Not coincidentally, Sandbag’s study also shows that nations with the most installed wind and solar capacity also saw the biggest fall in coal generation as renewables filled much of coal’s retreat. Since 95% of new additions in 2018 were in Western European countries, that’s “where the biggest falls in coal generation were.”

As such, coal’s decline throughout Eastern Europe has been much smaller, given the region’s relatively weak overall renewable generation capacities. Indeed, only five percent of new wind and solar capacities installed in 2018 were in Eastern Europe, with the big lignite-burners there, in particular Poland, installing the least amount of new capacity. Largely because of this, lignite-dependent Slovenia and Bulgaria have actually increased their respective coal burns this year.

As coal burns decline, regional Carbon Dioxide (CO2) emissions fall

According to Sandbag, “if coal stays at this level for the rest of the year, it will reduce CO2 emissions by 65 million tonnes compared to last year – more than the entire annual CO2 emissions of Portugal.” Overall, this alone could reduce the EU’s GHG production by 1.5%.

In Germany, by some measurements, the shift to fossil gas means total greenhouse gas emissions there from power production have also decreased in 2019 so far. During the first half of the year, emissions fell by 15%, compared to the same period in 2018, as reported by the German energy industry association BDEW.

EU Carbon pricing starts to impact coal burns

Though much of the fuel switch can be pinned on low fossil gas prices as imported supplies flood European markets, another driver has been the rising costs of CO2 allowances in the EU Emissions Trading System (ETS) and lower exchange electricity prices caused by a boom in renewables.

“Now that carbon pricing is finally working with the price approaching €30 per tonne, the economics have already shifted not only from coal to gas generation, but also directly from coal to clean generation – avoiding the need for a gas bridge,” said Sandbag’s Jones.

However, as the burning of lignite continues to be more expensive than burning gas, analysts predict the fuel swap will accelerate over the coming months. “Since January, we have seen the high carbon price really making the perfect market for gas,” said Yan Qin, lead carbon analyst at Refinitiv, on the developments in Germany. “We really see an interesting phenomenon: in the daily German power market, a high carbon price and very low gas price is really pushing gas in front of lignite,” she told Clean Energy Wire.

With more LNG and pipelined fossil gas pouring into the nation, Refinitiv estimates that Germany’s dirty fossil fuel switch will “continue at full speed in the next few months.” Looking longer term, Refinitiv’s German power model suggests that through the mid-2020s, as coal and nuclear increasingly face retirement, that void could be filled with even more gas generation—further stifling renewable growth while creating the illusion of energy progress. Given that pollutants know no boundaries, Germany’s own Environmental Agency (UBA) has continuously reported that fracked LNG, from a climate policy point of view, “is not justifiable.”