Coal soars in Europe amidst the energy crisis: from closing plants to last minute solutions to face the winter
With the price of gas going through the roof, Europe is looking for alternatives to deal with the current energy crisis. And one of the solutions has been found in an old acquaintance: coal. Despite the fact that CO2 emission rights have also risen and the intention to decarbonize to face climate change, different European countries have increased their use of coal as an alternative to a gas whose reserves are limited.
If last year we had cheap energy and the future of coal was totally uncertain, the situation has taken a complete turn. At the beginning of October, a price of 185 euros was reached for a ton of coal, highest figure since 2008 and multiple times higher than last year, when it was around 40 euros per tonne.
After gas, coal also shoots up
The coal futures market for the next quarter is currently around 207 euros per ton, below the record of October 5 but still more than 300% higher than 2020.
In recent days the predictions have been relaxed, mainly due to the words of Russian President Vladimir Putin regarding the supply of gas through Ukraine and the announcement of China, which has explained that it will increase coal production to help deal with the energy crisis.
The Asian giant currently has a production of approximately 60% based on coal. A considerably high percentage that the Chinese authorities want to reduce to reach, by 2060, carbon neutrality. In Europe, this date is marked for 2050.
While the long-term plans of the countries involve closing the coal-fired power plants, the truth is that in the short term, coal is playing a leading role in help meet demand, becoming a cheaper energy source than gas, whose high cost is the main responsible for the price escalation.
The closure of new mining projects, problems in the supply chain and the intention to eliminate dependence on coal due to its high CO2 emissions have not helped the price to stay low. The future of coal was dark just over a year ago, with the coal industry shedding its own assets. But the energy crisis has forced to rethink the position of the different countries with regard to coal, at least in the short term.
Endesa and thermal power plants such as As Pontes are once again supplied with coal
Concerned that this winter will be as tough as the futures market anticipates, the various energy companies are beginning to take positions. This is the case of Endesa, which has decided to supply itself with 80,000 tons of coal to supply the As Pontes thermal power plant, in A Coruña.
As ABC describes, while the closure of the thermal power plant continues, it is also prepared to produce energy again if it is needed to meet demand and alleviate the need for gas. Endesa sources tell the newspaper that “all possible options are being studied given the risk that there may be a problem in the international gas market or that a very harsh winter is coming and that it raises the demand of energy “.
In June 2020, Spain decided to close seven of the 15 coal-fired power plants that were still operating. The end of coal has been on the table for years, but at the moment the rest of the energy sources are not strong enough to completely eliminate our dependence.
One of the doubts with these coal-fired power plants was how to convert them. This is the case of the Los Barrios Thermal Power Plant, in the process of being reconverted to produce green hydrogen.
Currently only there are five active coal-fired thermal power plants in Spain, although all in the closing phase. In Asturias there is the Aboño and Soto de Ribera thermal power plants, scheduled for closure in 2022. In Galicia is As Pontes, the largest in Spain with a capacity of 1,468 MW and owned by Endesa. Under the same company is the Litoral de Almería power plant, with a conditional closure of a maximum term of four years. Although, it currently still has an inventory of around 32,000 tons of coal. The fifth plant is that of Es Murterar, in Mallorca.
Beyond Filomena, Spain had not burned coal in large quantities for months. This October is on track to be the month that more coal has been used to produce electricity of the year, with a percentage above 60% in non-renewable energy generation according to data from Red Eléctrica de España. Very far from what 2020 left us, where for the first time in history renewable energies in Europe surpassed fossil fuels.
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