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UTILITY Week 10th April 2015

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16 | 10TH - 16TH APRIL 2015 | UTILITY WEEK Policy & Regulation Market view L ast week, the European Union announced it is taking the UK govern- ment to court over a breach of emis- sions limits at the Aberthaw coal-fired power station in Wales. If the EU wins, the plant will no longer receive special dispensation to exceed the legal cap on emissions of the toxic nitrogen oxides (NOx) currently in force across the bloc. Its operator, RWE, will finally have to choose between closing the plant or fitting it with scrubbers. Either option should help reduce the 1,600 deaths and £2.7 billion in health costs caused each year in the UK by coal pollution. But while Aberthaw is a par- ticularly dirty power station (it also appears in WWF's "dirty thirty", the European power plants producing the most CO2), its problems are by no means unique. The coal industry, from mine to turbine, is in deep trouble. Peabody Energy, the num- ber one private sector coal company in the world, has seen its share price drop by 87 per cent over the past five years, while the US's number two and three have both dropped by over 95 per cent. Enel is moving out of coal, and Eon is in the process of hiving off its fos- sil fuel assets. China, the great hope of the industry, particularly in coal-exporting Australia, has reduced its coal use. Media organs outside the radical green le like The Telegraph, The Economist and Bloomberg have been trailing the industry's imminent demise. To top it all, the leaders of the UK's three main political parties have made a joint pledge to phase out unabated coal from our energy mix. Even coal's ugly sisters, the oil and gas industries, have taken to comparing them- selves with coal in the hope they'll seem more attractive by contrast. Some people are alarmed by this appar- ent collapse of the industry that started the industrial revolution, but they should not be. Coal is the leading source of carbon, sulphur dioxide (SO2), NOx, and mercury. It is haz- ardous to the human body as well as to the global climate. While a saner world would have phased out coal decades ago, recent progress shows that perhaps we are not quite as masochistic as many in the environmen- tal movement had feared. This is very good news. What we should be alarmed about is the continuing resistance to this change. As environmental concerns rose up the political rankings from a hippy eccentricity to a second-tier issue, polluting industries responded by changing their "race to the bottom" approach into a race to be second from bottom. The unrestricted destruction of natural resources moved from being a welcome sign of economic growth to a PR problem requiring a PR solution. But com- panies and countries which still see climate concerns as a PR problem are going to be at a severe competitive disadvantage this cen- tury. Think-tanks are already warning about low-carbon leakage as the technologies and businesses of the future leave European shores for countries where the political envi- ronment is innovative and forward-thinking rather than concerned with propping up incumbents. The UK government and RWE, Aberthaw's operators, are not unique in their inertia – many large organisations have the turning circle of a super tanker. There is legitimate sympathy for those employees who will be affected by a transition to a more sustain- able economy, but the manner in which governments around Europe are pandering to the interests vested in coal will do us no good at all. It is time to start planning for the well-being of the workers and communities affected, not keeping the owners and share- holders happy. Yet aside from one or two notable exceptions, European governments are still swimming against the tide and sacri- ficing the health of these communities to try to keep coal profitable. Europe's next set of restrictions on haz- ardous emissions from both existing and new coal plants are currently being formu- lated. The industry was allocated 137 places in the delegations negotiating this, and managed to capture a total of 183. The UK's "government" delegation was mainly drawn from industry, and Greece's was composed exclusively of industry lobbyists from one company. The entirely predictable consequence of this is that the current EU proposals for lim- iting pollution from existing coal plants are a lot less stringent than China's. They would allow new coal plants to be built in Europe which would emit five times the SO2, 2.5 times the NOx, two times the particulates, and five times the mercury of the cleanest currently operating coal plants. A coal industry which is really planning for the future would be cleaning up its act, and not only in terms of these toxic pollut- ants. You would expect to see huge efforts to develop functional, affordable carbon capture and storage systems – not just issu- ing statements about how they expect this will happen, but actually making it happen. The current approach suggests much of the industry has given up hope of finding a place in tomorrow's economy, and companies are focused on sweating as much from their declining assets as they can before the cof- fin lid is nailed shut. The problem is, tens of thousands of people will end up paying with their health for the industry's reluctance to clean up its act. Dr Doug Parr, UK chief scientist, Greenpeace It's time to bury coal Despite emissions targets, Europe is still addicted to generating power from dirty coal-fired plants. It's high time governments stood up to lobbyists and cut coal altogether, says Dr Doug Parr. Aberthaw: EU says coal plant is breaking the rules and should instal CCS or shut

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