LCPD was prescriptive, setting limits
on emissions from the stack, the IPPC
was more all-encompassing, covering
best available technologies (BAT) and
best practice throughout the whole
plant.
The IED has picked up the
BAT‑based factors of the more
challenging IPPC with respect to
determining just how much could or
should be achieved in terms of
emissions reduction when the so-called
‘best’ approach is used. This means that
the IED has tighter emission limits than
the LCPD. These are limits that cannot
easily be met with options, such as coal
switching or blending. Compliance
options will be determined based on
the BAT Reference Documents (BREFs),
which, as yet, are not completed for
coal. However, the options open to
utilities operating coal plants include:
n
n
Retrofitting power plants with
more enhanced pollution control.
n
n
Switching some or all of their fleet
from coal to natural gas turbines in
combined cycle (CCGT) plants or to
biomass.
n
n
Close the plants after a set run of
limited hours.
n
n
Close immediately.
The reality
While these choices may be clear and
simple on paper, the reality is a much
more complex decision process, based
on contractual obligations and economic
considerations. Most plant operators are
aware of how many costly bolt-on flue
gas controls may be required for those
power plants wishing to remain
operational into the next decade. For the
most part, plants that do not yet have
sulfur dioxide (SO
2
) and nitrogen oxide
(NO
X
) reducing technologies in place
face limited operation and/or closure
after the technical requirements of the
IED become applicable to existing
plants in January 2016. This means that
these plants, which wish to continue to
fire coal in the long term, must invest in
flue gas desulfurisation (FGD) and
nitrogen reducing (DeNO
X
)
technologies, such as low NO
X
burners
and/or selective catalytic or
non‑catalytic reduction (SCR and SNCR
respectively), or similar technologies
that can achieve the low emission limits
specified. Ultra-low sulfur and low
nitrogen coals are available, but these
will not be appropriate options for most
plants. The IED is a directive, which
essentially ensures that any plant
operating in 2020 and beyond is
installed with state‑of‑the‑art flue gas
treatment technologies and, assuming
compliance throughout the EU, will
guarantee continued SO
2
and NO
X
emission reductions from the coal
sector.
Before the IED replaced the LCPD
and IPPC, many operators in the EU
were already selecting which plants to
retrofit and which to close, according to
the previous requirements. While the
IED does not require much more than
what was previously required, it comes
into play in what can be considered a
somewhat different era for coal. The
goalposts have shifted in terms of
targets for renewables and
decarbonisation since the LCPD and
IPPC were written. Subsidies for coal
are disappearing, while funding in
alternative energy grows. Coal is still as
inexpensive and available as it has
always been, but the decision for the
coal sector in terms of investment in the
future is now largely based on the
affordability of compliance, rather than
just the cost of the fuel. Many of the coal
utilities in the EU are simply too old and
not worth the investment required to
bring them to IED standards. This
implies that a swathe of closures of
older coal plants across the EU is
somewhat inevitable. Wood Mackenzie
noted that the LCPD and IED will result
in the retirement of around 15 GW of
coal-fired generation in the EU by 2015
and a further 20 GW is likely to retire by
the beginning of the next decade. This
amounts to 60% of the existing
coal‑fired capacity in Europe. The
popular press have picked up on the
fact that a third of the UK’s electricity
generating capacity will close over the
next decade. Most of these plant
closures are due to plants coming to the
end of their operational life or being
unable to meet LCPD and IPPC
requirements in an economic manner.
These plans are unlikely to change as
Europe transitions from the LCPD to the
IED. As yet, in the UK at least, no-one
has declared closures or committed to
the Limited Lifetime Derogation (LLD,
meaning closure after a run of limited
hours) under the IED specifically, but
this will come. Plants must either step
up and clean up or close.
Coal industry faces other
challenges
But the IED is not the only challenge to
the coal industry in Europe. The
majority of decisions being made at
individual plants on whether to invest
in IED compliance have more to do
with economics and climate-energy
policies than simply with the
requirements of the IED itself. Fuel
fleets no longer have the luxury of
planning and achieving compliance on
a directive by directive basis. There are
a diverse range of existing and new
protocols and legal instruments, such
as the United Nations Framework
Convention on Climate Change
(UNFCCC) and the next decade of
Gothenburg emission ceilings, as well
as national obligations, such as
renewables targets and carbon
reduction. This means that
determining the effect of the IED alone
on the coal sector is virtually
impossible. Over and above this,
individual power companies, such as
RWE and Eon, have their own agendas
in terms of expanding their fuel
portfolios while reducing their
dependence on coal.
Until a year or so ago, Germany
appeared to be moving towards
building new coal and lignite plants
with 8 GW of new coal capacity under
construction (predicted to come online
by 2015). This surge in fossil fuel
investment was a result of favourable
economics and the inertia of projects
already underway. However, the
economic downturn and the apparent
public support for renewables suggests
that some of this new build may have
been stalled or cancelled completely.
The Netherlands and Spain are also
expected to limit or halt new build.
Conversely, however, power producers
in countries such as Poland have
already gone to great lengths to clean
up their existing fleet and are likely to
vehemently oppose further sanctions
on coal power.
72
|
World Coal
|
July 2015
