BAKU, Azerbaijan, October 25. Despite the bad optics and near-term damage to the EU’s climate credentials, there are good reasons to think that the pivot to coal will be short lived, Trend reports October 25 with reference to Capital Economics, UK-based research and consulting company.
First, according to the company’s report, it is encouraging that no countries in Europe have rowed back on the pledges to stop using coal altogether by 2030.
“In fact, most have recently raised their targets for “clean” electricity generation by the end of the decade. While such targets should be viewed with a healthy dose of scepticism, the fact that boosting renewables will also help with the geopolitical goal of increasing energy security should provide governments with some added motivation to meet the aims. Second, the economic incentive to decarbonise will only become stronger as renewables become cheaper. Note that renewables were already competitive with fossil fuels before the crisis. In the meantime, the sky-high price of gas means that gas-powered plants are only about as competitive as solar was a decade ago. Meanwhile, the cost of producing electricity using coal is more sensitive than other sources to changes in carbon prices, which are set to rise in Europe over time,” reads the report.
Finally, Capital Economics notes that there are plenty of funds available under the NextGenEU plan ready to be used for green projects.
“The scheme dictates that at least 37 percent of countries’ spending has to be used to support the green transition, and spending equivalent to about 1.3 percent of EU GDP is planned by the end of 2023. This seems to be filtering through to the real economy: imports of solar panels and LEDs to the EU from China have more than doubled since NextGenEU funds started to be disbursed, in August 2021.”
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