Why do we burn coal at Moneypoint?
There are two pressing economic reasons why we still burn coal at Moneypoint, Ireland’s largest power station, despite the high level of emissions produced by this fuel. The price of coal has declined in recent years and this, combined with the low cost of emission permits, means that it is now a very competitive fuel for power generation 1.
Other reasons relate to the business impact of the early redevelopment of the assets, the impact on electricity prices of any policy measures required to drive a conversion and the sustainability of the alternative fuelling options available at this time.
The price of coal has fallen in response to weaker demand and because cheap and abundant shale gas has displaced coal in power generation in the US. This prompted the US to increase its exports of coal, ultimately contributing to a reduction of the price of that fuel on world markets 2. In addition, the price of natural gas (though declining) is still relatively high.
At the same time, the price of emission permits in the EU emissions trading scheme (EU-ETS) is low while power sector emissions appear to be on track to meet their 2020 emissions target. As a result, despite the fact that coal-fired plants are large CO2 emitters, there has been a resurgence of coal use in 2009 to 2013, particularly in Germany, while we continue to use substantial quantities at Moneypoint (Fig. 8).
Whether the rise of coal continues into the future will depend on global coal and gas price developments and the success of new measures to correct the supply and demand imbalance (of emission permits) in the EU-ETS 3.