IEA: ‘Europe’s coal U-turn is temporary’

According to the annual market report on coal from the International Energy Agency (IEA), the 2022 European “U-turn” on the fossil fuel is temporary. The U-turn refers to the decision by some European countries to switch to coal-based electricity generation in response to constrained supply from gas, nuclear and hydro energy sources. While nuclear and hydro constraints were weather-related, gas constraints were primarily geopolitical, given the system’s reliance on Russian gas imports. Consequently, some coal plants had re-entered the market, sparking concerns regarding a potential trade-off between energy security and energy transition. According to the IEA’s analysis, with the exception of Germany, such coal revivals were at relatively low capacity and European coal power capacity is expected to fall in the short-term. The report states: “Redoubled efforts to improve energy efficiency and expand renewables will see EU coal generation and demand return to a downward trajectory as soon as 2024 in our forecast.”