Europe is turning to coal as Russia cuts gas supplies

German Economy Minister Robert Habeck has warned that the situation will be “really difficult in the winter” without safeguards to prevent supply shortages.

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Reduced Russian gas flows and the specter of a complete supply disruption have prompted some European governments to reconsider coal, one of the dirtiest and most polluting ways to produce energy.

This has raised fears that the energy crisis could slow Europe’s transition to fossil fuels, although politicians have insisted that coal burning needs to be halted to prevent a shortage of supplies in the winter.

Coal is the most carbon-intensive fossil fuel in terms of emissions and therefore the most important target for switching to the top to alternative energy sources.

However, Germany, Italy, Austria and the Netherlands have indicated that coal-fired power plants could be used to compensate for cuts in Russian gas supplies.

Russia-backed energy giant Gazprom reduce the capacity of the Nord Stream 1 gas pipeline. which is moving to Germany under the Baltic Sea, citing the delayed return of equipment serviced by German Siemens Energy in Canada.

It is unclear when – or whether – Nord Stream 1 gas flows will return to normal levels.

The critical thing now is that they ensure that all new measures are temporary and that we are on track to get out of Europe’s coal completely by 2030 at the latest.

Mahi Sideridou

Managing Director of the Europe Beyond Coal Campaign

German Economy Minister Robert Habeck described the tender’s decision to limit the use of natural gas and burn more coal is “bitter”, but said the country must do everything possible to store as much gas as possible before winter.

“Gas storage tanks must be full in the winter. This is a top priority,” Habek said in a statement, according to a translation.

The Netherlands said on Monday that it would activate an “early warning” phase of the energy crisis plan and remove the ceiling for coal-fired power plants to preserve gas, according to Reuters.

Italy and Austria have also said they plan to consider burning more coal to offset the sharp drop in Russian gas supplies.

Winter energy rationing?

Henning Gloystein, director of the Eurasia Group’s consulting firm on energy, climate and political risk, said the short-term solution for Germany and many other European governments is to have access to any form of energy that Russia cannot – and unfortunately this includes … coal. “

“Coal and lignite, which are the dirtiest forms of coal, but Germany has a lot of them and they will probably try to increase this to avoid winter gas shortages,” Gloystein told Squawk Box Europe. CNBC on Tuesday.

The Netherlands has removed the ceiling for the production of coal-fired power plants to preserve gas.

Bloomberg | Bloomberg | Getty Images

European politicians must be able to avoid winter energy standards, Gloystein said. However, he warned that “things could get really nasty” if Russian gas stops flowing when it is particularly cold.

“The worst-case scenario is energy rationing. That would be that non-essential industries were asked in the first stage to reduce consumption in exchange for compensation. This is a plan that the German government announced over the weekend,” Gloystein said.

“The next step would be to separate industries and households and ask them to consume much less, and this is something in Europe that most people have never experienced,” he continued. “This in the winter means that people will cool down in some areas, if it is a cold winter, some people will die, and this is really politically toxic and, of course, an unpleasant situation.

European governments are currently trying to fill underground storage facilities with natural gas to provide households with enough fuel to keep lighting and homes warm in the winter.

This comes as part of a broader effort by the bloc, which receives approximately 40% of its gas through Russian pipelines, to rapidly reduce its dependence on Russian hydrocarbons in response to the Kremlin’s nearly four-month attack on Ukraine.

Kremlin spokesman Dmitry Peskov said on Monday that Russia has gas ready to supply Europe, but its equipment must first be sent back. He described the recent dispute as a “man-made crisis” created by Europe.

Germany’s Habek previously described cutting Russia’s supplies as a “political solution” designed to upset the region and raise gas prices.

“Critical” to ensure that the new measures are temporary

Lauri Milivirta, a leading analyst at the Center for Energy and Clean Air Research, said it was important to understand the timing of Europe’s decision to turn to coal.

“Europe has been caught unprepared by the crisis and many measures will be needed to pass next winter without Russian gas,” Milivirta said.

“At the same time, the EU and many EU countries have responded to the crisis by speeding up the introduction of clean energy, which means that we will reduce fossil fuel construction much faster in the coming years than expected before the crisis.

Milivirta added that there is scope for the EU to do more to reduce demand for fossil fuels in the short term, especially in buildings and transport. “But it is important not to lose sight of the fact that the transition to clean energy is already accelerating significantly due to the crisis.

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The EU has said it wants to speed up plans to increase production from renewable energy sources, such as wind and solar, while finding ways to diversify gas supplies after the Russian war in Ukraine.

“Decades of failed energy and infrastructure policies have led to a time when our governments are (re) thinking about coal, the fuel responsible for millions of deaths, and irreversible climate damage,” said Mahi Sideridou, managing director of Europe Beyond. Coal told CNBC.

“The critical thing now is that they are ensuring that all new measures are temporary and that we are on track to get out of Europe’s coal by 2030 at the latest,” she said.

Sideridou said significant investments are needed in renewable energy – especially wind and solar – energy storage solutions, efficiency measures and more. “This is the only way to deal with the cost of living and climate crises and to help achieve peace,” she added.

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