You can add coal to the list of global commodities that are struggling during the pandemic. Prices have not yet turned negative (like oil), but coronavirus is accelerating the demise of the dirtiest fossil fuel.
Social distance measures mean that energy demand has fallen across the board. However, some of the smallest declines are in the electricity sector. That was supposed to be good news for coal. But it didn’t turn out that way.
Much of the world’s coal power is currently more expensive than gas and renewables, which explains why its share of the electricity mix has declined in Europe, India , China, and parts of the US. The markets for power in these four regions are large and varied. That makes the decline of coal even more surprising.
But maybe it’s not supposed to be. Policy makers and activists have spent years trying to reveal the true cost of coal’s environmental impacts, with the aim of making fuel economically less attractive. Almost half of the world’s coal-fired power plants are now running at a loss, according to the Carbon Tracker think tank.
Europe is a prime example of how to systematically manage the exit of coal. Austria and Sweden have announced in the last two weeks that they have shut down their last coal-fired power plants. They have now joined Albania, Belgium, Estonia , Latvia , Lithuania and Norway as non-coal countries in their electricity mix. Today, the U.K. grid operator has posted a new record — nearly 19 continuous days — of not using coal for electricity.
Kathrin Gutmann, campaign director for Europe Beyond Coal, walked me through the lessons that Europe can teach the world. At the federal level , three policies have proven to be most effective: pollution regulation of power plants with lower emissions of sulfur, nitrogen oxides and particulate matter (coal produces more than gas); tax or price on carbon dioxide emissions (coal emits twice as much carbon per unit of energy as gas); and mandates to increase the share of renewables in the electricity mix.
But this isn’t enough. Difficulties at the local level must also be addressed. Unlike solar and wind, coal can be switched on and off when needed. That means that grid operators need to find alternatives when using coal — whether converting power plants to using gas, installing batteries, or finding ways to import clean electricity from other regions whenever necessary.
Local challenges are greater for countries and regions that mine coal and provide thousands of people with well-paid jobs. The end has to come with a plan for the transition of coal-dependent livelihoods. For example, Germany is looking at a $55 billion package to compensate regions and companies that rely on coal. Similarly, the European Union is working on a “just transition fund” that could invest as much as $111 billion in even more coal-dependent countries like Poland.
Two more policies are needed to ensure that the collapse of coal doesn’t just happen, but comes quickly enough. First, the timeframes for phase-out of coal must be based on climate science. France, Sweden, Slovakia, Portugal, the United Kingdom, Ireland and Italy are planning on existing coal by 2025, which is in line with science.
Not everyone is going to get it right. Germany plans to exit coal by 2038, which is too late to meet the Paris climate agreement targets, said Gutmann. Even 2030, when the Netherlands decides to phase out, is likely to be the latest possible date for a European country if global warming is to be kept below 1.5 degrees Celsius.
Second, setting these deadlines in stone through some form of legislation goes a long way to ensuring that short-term political thinking does not get in the way. The United Kingdom. And France has been praised for setting emission efficiency-related regulatory targets, leaving coal power with few loopholes.
If nothing else is working, be prepared to get sued. Environmental group Urgenda won a case against the Dutch government, forcing the country to reduce its emissions by 25% in 2020 compared to 1990 levels. On Friday, the government announced that it would cut coal-fired power plants to meet those targets.
After years of tinkering, there are now many strategies to put an end to the dominance of coal for good. Jobs have become easier because the technological forces have made alternatives cheaper. The end of the coal is inevitable, and it may happen sooner than many think.
