Renewable baseload is eroding the value of coal, improving energy independence

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit
Share on email
Email
European power producers would be wise to invest in a faster phase-out of coal power, said the technology group. Image: Wartsila

Major system-wide benefits are obtainable for European power producers that quickly replace coal with renewable energy, from avoiding fuel and carbon costs to new power export opportunities.

This was the conclusion of a modelling exercise by the Finish technology group Wärtsilä which studied two energy systems in particular: Germany and the Ukraine. These two countries have vastly different power systems and policies to phase-out coal – demonstrated by how the coal capacity gap can be met with renewable electricity, thermal power plants and energy storage.

“Our analysis from both sides of the coal exit spectrum is clear: value has been eroded from coal by low-cost renewable baseload,” said Jan Andersson, Wärtsilä market development manager for Europe.

“The coal phase-out presents myriad opportunities for European countries to cut production costs, achieve energy independence and create revenue through society-wide sector coupling,” Andersson added.

Under its “Fast Phase-out 2030” scenario, the report concludes that Germany can eliminate coal power eight years ahead of target, by 2030. According to the model, the value of coal power would be eroded by building 13GW of new renewable energy capacity. This would make Germany less dependent on electricity imports, becoming a net exporter in the 2030s, and would save the country up to 600 million tonnes of CO2 by 2045 – equivalent to 81% of its national carbon footprint today.

For Ukraine, Wärtsilä modelled the outcome of the country modernising or retiring its coal. It found that a power system relying on modernised coal is €5.2 billion (US$6.2 billion) more expensive for consumers over ten years, and that the process would omit 53 million tonnes more CO2 than retiring the system.

A new system based on 32GW of new renewable energy would save Ukraine €500 million (US$595 million) annually on the cost of generated electricity by 2031, according to Wärtsilä’s modelling.

“Unlike Germany, Ukraine is not currently able to incentivise its coal exit, so it is vital that they find the lowest cost path to cleanly meeting power demand. Our modelling gives a clear outcome: modernisation of coal is far more costly than retirement,” said Igor Petryk, market development director at Wärtsilä.

Read Next

January 12, 2022
German asset manager KGAL Investment Management has acquired a combined 50% stake in renewables developer GP Joule Projects, with the two companies intent on taking advantage of the “immense growth opportunities” of renewables across Europe, and in particular Germany.
January 11, 2022
Impax Asset Management is collaborating with clean energy financial technology provider Bullfinch Asset to invest in distributed solar generation in Germany.
January 7, 2022
Renewable energy asset manager Luxcara has reached financial close for a subsidy-free solar project in Germany that will have a capacity of at least 171MWp and supply power to Volkswagen.
January 5, 2022
Around 5.3GW of solar was installed in Germany last year, however the trade body has warned that additional barriers will need to be “torn down” if the new German coalition government’s target of 200GW of operational solar capacity by 2030 is to be met.
December 23, 2021
Technical advisory TÜV Rheinland has been commissioned to study the potential for solar PV to power rail infrastructure in Germany.
December 15, 2021
The European Union’s (EU) solar PV sector has navigated a year beset by supply chain disruptions and module prices hikes to post record levels of annual deployment, according to research from SolarPower Europe (SPE).

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal