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News : EU Economy Last Updated: Apr 24, 2009 - 5:31:05 PM

Europe returns to Coal: Italy to increase reliance on coal for power generation to 33% from 14% despite climate change concerns
By Finfacts Team
Apr 23, 2008 - 3:40:40 AM

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Enel power plant in Civitavecchia, northwest of Rome, where conversion from oil to coal is underway.
Europe returns to coal and in Italy, major electricity producer, Enel, is converting its massive power plant in Civitavecchia, northwest of Rome, from oil to coal, the dirtiest fuel on earth. A report in the New York Times today says that over the next five years, Italy will increase its reliance on coal to 33% from 14%. Power generated by Enel from coal will rise to 50%.

The report says that Italy is not alone in its return to coal. Driven by rising demand, record high oil and natural gas prices, concerns over energy security and an aversion to nuclear energy, European countries are slated to build about 50 coal-fired plants over the next five years, plants that will be in use for the next five decades.

Coal powered plants are being opened at a rapid pace in India and China. Australia, the world's biggest coal exporter, is a key supplier to Asia. The port of Newcastle, north of Sydney, is straining to meet the demand.

Despite planned expansions, the ability of Australian seaports to handle increased coal shipments is unlikely to improve in the next few years, the head of the world's largest coal producer said on Tuesday.

"It's not going to happen,"Gregory Boyce, chairman and chief executive of Peabody Energy Corp said during a conference call with Wall Street analysts.

Boyce was asked whether recent congestion at Australian ports would be fixed soon. "It depends on what you mean by 'fixed,'" said Boyce.

"We'll see some substantial increases in port capacity, but enough to satisfy demand? They will still be short."

Some 38% of global electricity is generated from coal. Australia, Poland, South Africa and China all rely on coal to produce over three quarters of their electricity, India over 60%, and the USA and Germany more than half.

In Germany and Italy, there is a ban on building nuclear power stations and some environmentalists who advocate anti-climate change measures do not accept that where oil is more expensive than coal, which has a reserve life of 200 years compared with up to 50 years for oil, choices have to be made in the real world.

In Ireland, Minister for Communications, Energy and Natural Resources Eamon Ryan, called last January for "an urgent public debate in Ireland on nuclear energy." The call by the Green Party minister coincided with the announcement of the UK government's plans for a new generation of nuclear power stations, ending years of uncertainty over its energy strategy. The "urgent debate" may as well be held on Mars.

The New York Times report says that Europe’s power station owners emphasize that they are making the new coal plants as clean as possible. But critics say that “clean coal” is a pipe dream, an oxymoron in terms of the carbon emissions that count most toward climate change. They call the building spurt shortsighted.

“Building new coal-fired power plants is ill conceived,” said James E. Hansen, a leading climatologist at the NASA Goddard Institute for Space Studies told the NYT. “Given our knowledge about what needs to be done to stabilize climate, this plan is like barging into a war without having a plan for how it should be conducted, even though information is available.

“We need a moratorium on coal now,” he added, “with phase out of existing plants over the next two decades.”

Enel, like other electricity companies, say they have little choice but to build coal plants to replace aging infrastructure. Fuel costs have risen 151% since 1996, and Italians pay the highest electricity costs in Europe.

Enel said in 2006 when it announced the planned conversion of the Civitavecchia plant from oil to coal, that the adoption of cutting-edge emissions-abatement technologies and the increased efficiency of coal-fired plants, make the use of coal compatible with the even stricter environmental regulations that were due to enter force in 2008. "The project not only helps to reduce emission levels of more than 80% compared with the previous oil power plant but it also allows the plant working under further better conditions even compared with the emission limits contained in the VIA Decree (Environmental Evaluation Impact decree)." Enel also emphasized that the wide availability of coal in many countries and the size of estimated coal reserves, which are far greater than those of gas and oil, make it an attractive option and an essential component of a balanced mix of energy resources for power generation.

About one fourth of all energy consumed in Finland is generated utilising nuclear power. A French-German Consortium formed by Framatome ANP and Siemens has responsibility for the current construction of the Olkiluoto 3 plant pictured above.

Enel also said that in circumstances "that are laying bare the dramatic structural fragility of the natural gas supply system and the dangers of over-reliance on one type of fuel to generate electricity, the diversification of energy resources, supplier countries and supply systems, and the need to ensure energy security and greater competitiveness for Italy has become a matter of even greater urgency and strategic importance."

The company also defended the decision to expand the role of coal in electricity generation in Italy, with the objective of increasing its share of the fuel mix towards the European average, as the only feasible way to bring Italian electricity prices into line with those in the main European countries, thereby boosting the competitiveness of Italian companies and easing the burden of energy costs on the budgets of Italian households.

Today's NYT report says that the technology, which the industry is counting on to reduce the carbon emissions that add to global warning — carbon capture and storage — is not now available for coal. No one knows if it is feasible on a large, cost-effective scale.

Enel says it will only start experimenting with the technology — in which carbon emissions are pumped into underground reservoirs rather than released — in 2015, in the hopes of “a solution” by 2020.



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