Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • December 2017
12

Investors warned of 'death spiral' for EU coal plants

Open-access content Friday 8th December 2017 — updated 5.50pm, Wednesday 29th April 2020

Air quality standards and carbon prices are set to result in almost every coal plant in the EU losing money by 2030, with more than half already loss-making.

2

That is according to a report released today by Carbon Tracker, which warns investors that, despite the potential losses, energy companies only plan to cut their coal capacity 27% by that time.

However, it shows that a complete phase-out of coal by 2030 could stem utility losses by €22bn (£19bn), with almost all of Europe's 15 largest operators saving money.

In addition, it reveals that building onshore wind and solar PV projects will be cheaper than operating existing coal plants in Europe by 2024 and 2027 respectively.

"Air pollution policy, rising carbon prices, and the changing economics of renewables, have put EU coal power in a death spiral," Carbon Tracker analyst, Matt Gray, said.

The research shows that Germany has the highest number of unprofitable coal plants, but that early closure could save them €12bn, while Poland could make savings of €2.7bn.

Italy's Enel and Romania's CE Oltenia would be the only two of Europe's 15 biggest utility companies that would not cut their losses with a coal phase-out by 2030.

Germany's RWE and Uniper would making savings of €5.3bn and €1.7bn respectively.

Despite this, the report highlights how utility companies may keep coal plants running in the hope that governments will either continue to subsidise them for the guarantee of power supply, or pay them to close.

It also states that the expectation that competitors will retire plants and push power prices up, could also tempt utilities to keep their capacity running, as could the potential clean-up costs associated with scrapping coal.

However, stricter EU air quality standards that require 70% of capacity to install expensive new technologies by 2021 are expected to focus the minds of utility companies.

In addition, the European Commission has proposed banning coal from receiving capital market payments by 2025, which would likely undermine the chances of plants gaining new support from member states.

"Utilities can't do much to stop this other than drop coal or lobby governments and hope they will bail them out," Gray added.


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our December 2017 issue of The Actuary.
Click here to view this issue
Filed in:
12

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ