Coal phase-out has found its vanguard in Europe but challenges abound in developing countries

Coal has long been the backbone of global energy supply but its dominance is waning as countries shift to greener alternatives. Being the most energy-intensive fossil fuel, coal-generated power is being phased out in many countries as the new nationally determined contributions (NDCs) come into being. 

Latest statistics by the Global Energy Monitor reveal that six countries have eliminated coal power capacity after the Paris Agreement – United Kingdom, Portugal, Austria, Belgium, Peru and Sweden. This has been achieved through a combination of policy measures, market dynamics and renewable energy transitions.

Integration of RE and gas in Europe

Natural gas is the main source of energy and hence it acts as the main source for backup the UK. The country also has nuclear power which also acts as an auxiliary source. The UK also has abundant wind power with two offshore wind projects at Hywind Scotland and Kincardine wind farms which have a capacity of 6 MW and 9.5 MW respectively. While coal consumption was 157 million tonnes in 1970,  it declined to 48 million tonnes in 2014. It was further reduced to 37 million tonnes in 2015.

As gas emits less carbon dioxide per megawatt hour than coal, there has been a shift from coal to gas in the UK after the introduction of Carbon price floor (CPF) which taxes fossil fuels used to generate electricity via Carbon Price Support (CPS) rates.

Portugal has seen major investments in renewables, with the share of the power mix to 61 per cent in 2021, from 39 per cent in 2017. The main sources of power are wind, hydropower and natural gas. Among this, hydropower and natural gas acts as the sources of backup. Portugal also has Iberian electricity market (MIBEL) which is a collaboration between Portugal and Spain’s electrical system and thus trades power with Spain when demand is high.

Belgium had been taking measures to phase out coal even before the Paris Agreement. Hence it was the first European country to phase out coal in the year 2016 by the shutdown of its last coal power plant, Langerlo in March 2016. With an annual average growth rate of 0.27 per cent, nuclear power surpasses the hydroelectric and thermal capacity in the country. It accounts for 46 per cent of electricity generation in the country, followed by natural gas (23 per cent), wind (13 per cent), solar (eight per cent) and other forms of renewable energy.

Peru had minimal coal usage from the early stage. Its only coal plant which had the capacity of 135 megawatt (MW) was decommissioned in the year 2022. Moreover, hydropower has traditionally been a source of electricity supply accounting for more than 60 per cent of the electricity generation followed by natural gas. Hydropower is the main source of power for Peru. Hence it acts as primary backup and baseload for the country. Peru also has abundant natural gas reserves in the Camisea gas project.

Austria is one of Europe’s largest hydropower producers and thus it acts as the main backup for the country. They also have pumped storage hydropower like Kaprun, Malta-Reisseck power plant groups and other pumped storage acts as fast-response for backup. 

Hydroelectric (41 per cent) and nuclear (29 per cent) are the main sources for electricity generation in Sweden. It has three nuclear plants with six reactors within the country. They also import energy from Denmark’s wind energy through the Nordic power grid. However, hydropower and nuclear act as backup for intermittent energy sources of wind and solar. 

Policy actions and global cooperation

In November 2015, the UK government announced its intentions to end unabated coal generation by the year 2025 by accepting proposals from companies to suggest the same. After many consultations and with the help of the Department for Business, Energy and Industrial Strategy (BEIS) on September 18,  2017, the government proceeded with action to regulate the closure of unabated coal power generation units by 2025. 

Global Coal to Clean Power Transition formed by the UK along with countries like Poland, Vietnam, Egypt, Chile and other countries and various organizations during COP26 to phase out coal also promoted this transition.

In the COP23, Portugal had pledged to phase out coal by the year 2030. The target was however achieved in November 2021 by the closure of Pego power plant, which was the last coal-fired plant in the country. Portugal in the timeline of 2012-2020, in a span of eight years, had reduced the percentage share of coal from 29 per cent to 5 per cent. 

The Austrian federal government adopted the Climate and Energy Strategy in the year 2018 with a mission to achieve it in 2030. This formed a basis for Austria’s National Energy and Climate Plan (NECP). The main objective of the NECP was to reduce GHG emission by 36 per cent compared to 2005 levels in the industrial sector by implementing energy efficiency measures and use renewable energy sources in industrial manufacturing processes for heat recovery.6

Moreover, Austria set a goal to phase out coal in the year 2025. With an acceleration in the timeline, the country’s last power plant, Mellach (850MW) was shut down in 2020. 

An energy policy was adopted in June 2018 by the Swedish government which has a target to achieve 100 per cent renewable electricity production by 2040. The last coal plant Värtaverket in Stockholm with a capacity of 130 MW was shut down in the year 2020 making it the third European country to phase out coal.

As part of the Powering past coal alliance or PPCA, the European Union along with 25 nations have launched a Call to Action for No New Coal after the COP29 in Baku. These signatories try to push their intention to end the use of unabated coal within the electricity sector as a part of their national climate plans. These initial signatories also try to push this program and bring it to the lead for COP30 at Brazil. 

As of the statistics from the global energy monitor, among 107 nations, it has been identified that 33 nations do not have any operating coal power plants. By considering other factors like announced, permitted, shelved and mothballed coal power plants, there are 22 nations that do not have any coal power plants. 

The other countries that have taken measures to phase out coal from their electricity sector by 2030 include Canada, Denmark, Finland, France, Ireland, Israel, Italy and other nations. 

Challenges faced by developing countries

Even with the declining trend of coal power globally, coal-driven economies like India and Indonesia do not see a near term phase out. The energy requirement in these nations is largely driven by the rising energy demand and increasing per capita consumption. Moreover, intermittency of renewable energy further leads to demand for coal.

Chandni Raina, India’s representative at COP29 at Baku had remarked during the final negotiations for the $300 billion deal that a meagre allotment of climate finance in the proposal is due to the unwillingness of developed nations in fulfilling their responsibilities. 

She pointed out that this will affect India’s ability to adapt to climate change and will be a challenge for the implementation of its ambitious NDCs.