Energy Union and EU Energy and Climate Policy

11th European Conference on Coal Research

and its Applications

The Edge Brian Ricketts

University of Sheffield Secretary General

ÙK 5 September 2016

EURACOAL: 33 members from 18 countries ■ DEBRIV - Deutsche Braunkohlen-Industrie-Verein

(DEU)

■ GVSt - Gesamtverband Steinkohle (DEU)

■ MMI - Mini Maritza Istok (BGR)

■ PPC - Public Power Corporation (GRC)

■ PPWB - Confederation of Polish Lignite Producers (POL)

■ GIPH – Mining Chamber of Industry and Commerce (POL)

■ ZSDNP - Czech Confederation of Coal and Oil Producers (CZE)

■ APFCR - Coal Producers and Suppliers Association of Romania (ROU)

■ BRGM - French Geological Survey (FRA)

■ CARBUNIÓN - Federation of Spanish Coal Producers (ESP)

■ CoalImp - Association of UK Coal Importers (GBR)

■ DTEK (UKR)

■ EPS - Electric Power Industry of Serbia (SRB)

■ GIG - Central Mining Research Institute (POL)

■ HBP - Hornonitrianske bane Prievidza (SVK)

■ Chemical Process and Energy Resources Institute (CERTH/CPERI) (GRC)

■ `Lubelski Węgiel „Bogdanka” SA (POL)

■ Borsod-Abaúj-Zemplén County Government (HUN)

■ PATROMIN – Asociaţia Patronală Minieră din Romania (ROU)

■ Premogovnik Velenje (SVN)

■ RMU “Banovići” d.d. (BIH)

■ TKI - Turkish Coal Enterprises (TUR)

■ Ukrvuglerobotodavtsy - All-Ukrainian Coal Employer‘s Association (UKR)

■ VDKi - Verein der Kohlenimporteure (DEU)

■ EMAG Institute of Innovative Technologies (POL)

■ Finnish Coal Info (FIN)

■ Golder Associates (GBR)

■ Geocontrol (ESP)

■ ISSeP - Institut Scientifique de Service Public (BEL)

■ KOMAG Institute of Mining Technology (POL)

■ SUBTERRA Ingeniería (ESP)

■ Trolex Ltd (GBR)

■ University of Nottingham (GBR)

11th European Conference on Coal Research and its Applications – Slide 2

EURACOAL history: 1950 to the present 1950 Schuman Declaration

1952 European Coal and Steel Community

1953 Foundation of CEPCEO

1957 European Economic Community

1958 CEPCEO legal entity

1964 European Association for Coal

1973 Oil crisis

1993 Treaty of Maastricht - European Union

1996 CECSO - integration of lignite

2002 EURACOAL - one voice for coal in Europe

2009 Treaty of Lisbon

11th European Conference on Coal Research and its Applications – Slide 3

Aims

■ Securing coal’s position in the European energy mix through

appropriate policies, laws and regulations.

Objectives

■ Co-operating in achieving a balance between:

■ energy policy requirements

■ competitive markets

■ environmental policy initiatives

EURACOAL – aims and objectives

11th European Conference on Coal Research and its Applications – Slide 5

Coal use and wealth creation

• Electricity generation is the main use of “steam coal” – 41% of the world’s

electricity comes from coal.

• “Coking coal” (as well as iron ore and limestone) is used for steel

manufacturing.

• Industrial process heating: the cement, glass, ceramic, food and paper

industries all use coal.

photo courtesy of the American Coalition for Clean Coal Electricity

11th European Conference on Coal Research and its Applications – Slide 6

0%

10%

20%

30%

40%

50%

60%

70%

80%

90% coal 26.4%

oil 1.8%

gas 14.3%

nuclear 27.5%

hydro (exc.pumped) 12.7%

other 17.3%

Share of coal in EU electricity, 2014

Source: Eurostat database nrg_105a last update 28.01.2016 (*includes peat)

EU average = 26.4%

11th European Conference on Coal Research and its Applications – Slide 7

Coal is the most affordable fossil fuel

Sources: BP, World Bank and McCloskey Coal Information Service bbl = barrels of oil

11th European Conference on Coal Research and its Applications – Slide 8

EU fossil fuel import dependence: import bill

grew from 1.5% of GDP in 2002 to 4.2% in 2012

sources: chart - European Commission, data – Eurostat DS 018995, 15.01.14

In 2012, the EU spent 4.2% of GDP to import €548 billion of oil, gas & coal.

2012: €423.7 billion €95.0 billion €20.8 billion

11th European Conference on Coal Research and its Applications – Slide 9

Global hard coal & lignite reserves

88% of the EU’s conventional energy reserves are in the form of coal and lignite (and 95% of our resources).

11th European Conference on Coal Research and its Applications – Slide 10

The future of lignite mining in Germany

11th European Conference on Coal Research and its Applications – Slide 11

11th European Conference on Coal Research and its Applications – Slide 12

11th European Conference on Coal Research and its Applications – Slide 13

“ ... fossil fuels – especially

coal, but also oil and, to a

lesser degree, gas – needs to

be progressively

replaced

without

delay. ”

11th European Conference on Coal Research and its Applications – Slide 13

11th European Conference on Coal Research and its Applications – Slide 14

Hans Joachim “John” Schellnhuber

11th European Conference on Coal Research and its Applications – Slide 14

11th European Conference on Coal Research and its Applications – Slide 15

Risks and impacts of climate change – the IPCC’s “burning embers” diagram

2°C

11th European Conference on Coal Research and its Applications – Slide 16

“ Scientists

should be on tap,

but not on top. ”

11th European Conference on Coal Research and its Applications – Slide 16

11th European Conference on Coal Research and its Applications – Slide 17

NO JOBS ON A DEAD

PLANET campaign by the European Trade Union Confederation

11th European Conference on Coal Research and its Applications – Slide 18

Guardian (350.org) “Keep it in the ground” campaign

11th European Conference on Coal Research and its Applications – Slide 18

11th European Conference on Coal Research and its Applications – Slide 19

PM Donald Tusk on Energy Union FT, 22 April 2014

11th European Conference on Coal Research and its Applications – Slide 19

11th European Conference on Coal Research and its Applications – Slide 20

“EU’s commitment to a clean energy transition is irreversible and non-negotiable.” p.5 COM(2016) 110 on Energy Union

Vice President for Energy Union, Maroš Šefčovič and Commissioner for Climate and Energy, Miguel Arias Cañete

11th European Conference on Coal Research and its Applications – Slide 20

11th European Conference on Coal Research and its Applications – Slide 21

Carbon capture and storage

11th European Conference on Coal Research and its Applications – Slide 22

Poland’s CO2 storage site

11th European Conference on Coal Research and its Applications – Slide 23

E.ON Kingsnorth 1600 MW with CCS

11th European Conference on Coal Research and its Applications – Slide 24

CCS is not enough.

We have to have a narrative that fits

with today’s political vision.

We need to appear to be

disappearing, while gaining some respect for the role of coal during the

“energy transition”.

750 seats in the European Parliament

11th European Conference on Coal Research and its Applications – Slide 25

2030 proposals – some good points, some bad

1. A 40% GHG reduction target c.f. 1990 with no further

“conditional” targets offered at international negotiations

2. A 27% EU-wide binding target for renewable energy in

final energy consumption

3. ETS allowance cap to shrink by 2.2% each year from

2021 (c.f. 1.74% now)

4. A new market stability reserve for the ETS from 2021

(Phase IV) – from 2019 after revision

5. Carbon leakage protection to continue. Innovation Fund

and Modernisation Fund

6. Indicators for energy price competitiveness and energy

security

?

11th European Conference on Coal Research and its Applications – Slide 26

EU Emission Trading Scheme = zero CO2 in 2058

EU ETS is the key instrument designed for the long term.

MtCO2-eq.

11th European Conference on Coal Research and its Applications – Slide 27

2030 package would be a bonanza for gas

0

2

4

6

8

10

coal gas coal gas

CO2 costs per kWh

fuel costs per kWh

€ct / kWh

Proposal from the European Commission implies fuel switching to gas at a high cost to consumers with EUAs at €55/tCO2!

11th European Conference on Coal Research and its Applications – Slide 28

Flexibility is needed to balance renewables

0

200

400

600

800

1,000

1,200

0 5 10 15 20 25 30

MW

minutes

BoA 1 to 3

Maximum load ~ 1,000 MW

Minimum load ~ 500 MW

Maximum ramp rate +/- 30 MW/min

Gas-fired CCGT at Lingen

Maximum load ~ 2 × 400 MW

Minimum load ~ 520* / 260** MW

Maximum ramp rate +/- 32 MW/min

* 2 boilers operating** 1 boiler operating

min. load**

min. load**Maximum load ~ 2 × 550 MW

Minimum load ~ 350* / 175** MW

Maximum ramp rate +/- 30 MW/min

BoAplus

Coal-fired power plants match the flexibility of gas-fired power plants.

11th European Conference on Coal Research and its Applications – Slide 29

New coal-fired power plants in the Netherlands

11th European Conference on Coal Research and its Applications – Slide 30

■ Engie (GDF Suez, Electrabel) Maasvlakte (Rotterdam) 800 MW

■ Uniper (Eon) Maasvlakte 3 (Rotterdam) 1116 MW

■ RWE Eemshaven (Groningen) 1560 MW

Conclusion: 3-step clean coal strategy

A pragmatic 3-step strategy for a cleaner more prosperous future.

• TODAY: replace old power plants with new plants

• TOMORROW: R&D for high efficiency and flexibility

• DAY AFTER TOMORROW: CO2 capture and storage

demonstration + public CO2 infrastructure

11th European Conference on Coal Research and its Applications – Slide 31

Brian RICKETTS, Secretary-General

European Association for Coal and Lignite AISBL

168 avenue de Tervueren, boîte 11

BE-1150 Brussels

Belgium

ricketts euracoal.org

www.euracoal.eu

Thank you!