A third of Europe’s large-scale coal-fired power plant capacity faces costly air quality upgrades or closure as a result of new European Union emissions limits, according to analysis published by the Institute for Energy Economics and Financial Analysis (IEEFA).

The new regulations will “further undermine and in many cases shatter the fragile economics of coal generation” across the EU compared with gas and renewables according, to Gerard Wynn, co-author of the IEEFA’s report, “Europe’s Coal-Fired Power Plants: Rough Times Ahead”

“The cost of compliance will be prohibitive for many of these installations, given the market outlook and other headwinds,” Wynn said. “Owners will either have to make significant investment and technical changes in just four years, or decide to close the plants altogether or significantly restrict their operating hours. Whichever way they turn, additional cost is unavoidable.”

Additional financial stress

The new standards are to be implemented by 2021 and represent significant additional financial stress for much of a coal power fleet already under pressure and struggling to remain profitable, said Wynn.

“The new regulations will be of major interest to investors as they look at utility investment portfolios and emerging opportunities in the rapidly evolving European energy market,” Wynn added.

Major markets including Poland are especially exposed to what Wynn called a “cough-up, wind-down or shut-down” compliance choice.

The IEEFA analysis identified the biggest polluters, or the “low-hanging fruit,” that is, the plants facing the costliest retrofit investments, a total of 108 plants with a combined 187 gigawatts (GWth) of thermal capacity.

That group includes about 35% of all larger coal, lignite and biomass power plants, by capacity, and 18% of the total, across Europe. The low-hanging fruit were defined as those at least 40% above the new BREF emissions limits, using the latest publicly available emissions data.

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