A slow, inexorable death throes. This seems to be the fate awaiting coal, one of the most polluting fossil fuels with the highest emissions. At least in Europe. Ugly, dirty, but cheap and readily available, it has shaped and continues to shape energy production at a global level. But the so-called phase out (abandonment) now appears to have begun, despite the most recent figures seeming to suggest otherwise — so much so that Europe was prompted, back in January 2021, to call for its abandonment at a global level.

• The world is still burning too much coal
• Italy's coal phase out has already begun
• The employment knot after the abandonment of coal
• Italy's energy transition goes through gas
• The capacity market. Resource or bluff?
• What to do with old power plants, the Monfalcone case

The world is still burning too much coal

That coal is now in sharp decline across Europe is a matter of fact, even if the signals are rather contradictory and undoubtedly caused first by the pandemic and then by the economic recovery. Indeed, global coal production fell by only 4 per cent in 2020, to around 6.9 billion tonnes. The entire Western world nonetheless saw a sharp contraction in coal demand, with 390 million tonnes in 2020: a reduction of 22 per cent compared to 2019. Conversely, demand for the fossil fuel in Asia remained strong, so much so that Chinese production stood at 3,690 million tonnes, the same figure as in 2019. Not only that, but the International Energy Agency (IEA) forecasts a sharp rebound in 2021, with global coal demand up 4.5 per cent compared to 2019. The recovery is visible in one of Europe's largest coal producers after Poland: Germany. Here, lignite production in the first quarter of 2021 increased by 25 per cent compared to the previous year.

But it is the IEA itself that states that, in order to achieve net emissions by 2050, it will be essential to cancel investments "in new fossil fuel supply projects and no further investment decisions for new coal-fired power plants". Confirming that this is indeed the trend is the recent announcement by Enel, one of the leading national and international energy providers: "At a global level we are exiting this technology, according to a plan that envisages completing the phase out by 2027, brought forward by 3 years compared to the previous 2030 target," Luigi La Pegna, head of Hydro, geothermal and thermal generation at Enel global power generation, explains to LifeGate.

Italy's coal phase out has already begun

The Italian trend appears to be moving in this direction. In 2019, the Ministry of Economic Development and Labour, in collaboration with the then Ministry of the Environment (today the Ministry of Ecological Transition), had decided to close coal-fired power plants by 2025, in line with the Pniec (Piano nazionale integrato per l'energia e il clima) at the time. "We're not that far off," Filippo Taglieri, campaigner at Re:common, explains to LifeGate. "Although each power plant has its own story. For example, the ones in La Spezia and Fusina are closing in 2023, even though they were already running at a minimum. Civitavecchia, on the other hand, which we visited recently, has only one operating unit."

In total, there are still eight operational power plants across the country, representing around 8 gigawatts (GW) of installed capacity. "In Italy, to encourage and accelerate the exit from coal it is necessary to implement a major plan for developing renewable sources and new flexible capacity capable of meeting grid needs: storage and, in some limited cases, to the extent strictly necessary to guarantee the security of the national electricity system, high-efficiency gas plants," La Pegna points out. But if, for the energy company's head of operations, it is necessary to increase the share of renewables and storage systems, it will also be essential to "work across the entire supply chain, from electricity generation to transmission through to consumption," in order to have electricity "produced increasingly from renewable sources, and therefore without emissions, fed into smart and ever more resilient grids."

In 2020, the volumes of coal purchased and burned at Enel's power plants totalled around 6 million tonnes, some of which come from the Cerrejón mine in Colombia, also described as the "mine of discord." As Re:common explains, Cerrejón is one of the largest open-cast mines in the world, which over the years has caused the forced displacement of indigenous and Afro-Colombian communities and widespread air and water pollution. Enel confirms that the group purchases coal from the Colombian Cerrejon mine through its affiliated company Cmc-Coal Marketing (Cmc), but that contracts entered into in previous years are currently in place with delivery terms ending in December 2021. In line with its global decarbonisation strategy, the group has in recent years purchased ever-decreasing quantities of coal, which today represent a marginal share of fuel purchases. With regard to Cmc specifically, the purchase of around 900,000 tonnes of coal is planned over the course of this year 2021.

Meanwhile, the Federico II thermoelectric power plant in Brindisi, in operation since 1997, closed its first unit last January. It is currently among the largest power plants in Europe, and the second largest in Italy: with over 10 million tonnes of CO2 emitted every year, it vies for first place with the Lazio power plant at Torrecavadaliga Nord (in Civitavecchia) for emissions and for the economic value of the damages associated with pollution. For the same reason it also features among the twenty-five power plants with the highest environmental impact in Europe, as reported by the think tank Beyond Coal. "At the end of 2019 Enel closed the Bastardo power plant, at the end of 2020 it closed Unit 2 of the Federico II power plant in Brindisi, while units 1 and 2 of the Andrea Palladio plant in Fusina will be decommissioned at the end of this year (2021, ed.), in line with the authorisations from the competent authorities," La Pegna confirms.

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The employment knot after the abandonment of coal

In recent months, however, the employment issue has dominated the debate, both with regard to Brindisi and Civitavecchia, two of the country's largest energy-sector hubs. "The impact on workers had already been announced and has been seen in the fall in energy demand," explains Taglieri. "There is certainly a problem because workers need to be redeployed: gas turbine plants need half the staff, although the company should have no difficulty redeploying numbers that are in the order of a few hundred people." The Federico II plant in Brindisi currently employs around 300 people directly, and its forthcoming closure would mean the loss of the supply chain that depends on activities linked to coal handling — and therefore also on port activities — as well as maintenance and logistics.

As regards Civitavecchia, the position of the trade unions and the Lazio Region appears to favour a "green" conversion of the plant. For Cisl Lazio, "the impetus for the energy transition should start from a modernisation of the electricity grid and from incentives that allow an increasingly significant transition towards the choice of renewable energy."

Sardinia deserves a separate discussion, where the Porto Torres and Portovesme power plants are still in operation. The proposal coming from both the government, Terna (the electricity grid operator) and Enel (owner of the plants in question) is to make the region "a true 'green island' by 2030, through zero-emission energy production and the electrification of activities and consumption," explains La Pegna. "In view of some specific characteristics of the territory — such as practically zero use of gas and a forecast of a significant increase in electrical connectivity with the mainland thanks to the construction of a new link (Thyrrenian Link) — the company has proposed for Sardinia to move directly to energy supply from renewable sources alone supported by storage systems."

Italy's energy transition runs through gas

Despite the proposals in place and an apparent willingness to further develop renewables, Italy's energy conversion is entirely focused on natural gas as a "transition fuel." To compensate for the phase-out of coal, utilities plan to build, over the next decade, new gas-fired power plants with a combined capacity of 14 GW, of which 5.8 GW are already guaranteed by supply contracts awarded in the capacity market and are expected to come into service by 2023.

"The development of flexible gas capacity, to the extent strictly necessary for the stability and security of the national electricity system, is identified by the Pniec as an indispensable medium-term instrument, necessary for an adequate and progressive transition towards generation based increasingly on renewable sources," explains La Pegna. "It will be the actual evolution of the national electricity system in the coming years that determines how long these plants will be needed for grid security and stability, but this is a transitional technology that supports a more sustainable model with the aim of generation entirely from renewable sources."

But for analysts at Carbon Tracker, plans to build new gas-fired power plants in Italy could jeopardise the country's climate targets and entail losses of up to 11 billion euros in investment, missing the opportunity to reduce domestic electricity consumption. It is rather interesting to note that as early as April 2021 the think tank's experts were warning that "if Italy continues to focus on electricity generation through gas-fired plants rather than on solutions based on low-cost clean energy, consumers will see higher bills."

What is more, a recent report by the Centre for Research on Energy and Clean Air (Crea), entitled "Ripe for closure: accelerating the energy transition and saving money by reducing excess fossil fuel capacity," shows that nine European states, including Italy, could immediately close fossil fuel power plants totalling 48.8 GW of installed capacity without putting electricity supplies to households and businesses at risk. This amounts to no less than 17 per cent of all installed capacity in fossil fuel plants across Europe. With the early retirement of unnecessary plants, the saving in fixed operating and maintenance costs would be nearly 2 billion euros a year.

The capacity market: resource or bluff?

What is under fire is the capacity market: approved in 2019, it was created with the aim of accompanying the progressive decommissioning of coal-fired plants while at the same time safeguarding the grid's ability to guarantee adequate, schedulable electricity supplies. The mechanism introduced by this market aims to remunerate large plants on the basis of their avai