Europe's hunger for coal

SCHWARZE PUMPE, Germany In the shadow of two hulking boilers, which spew 10 million tons of carbon dioxide a year into the air, the Swedish owners of this coal-fired power station recently broke ground on what is to be the world's first coal-fired plant that produces no carbon dioxide emissions. The German chancellor, Angela Merkel, presided over the ceremony. "We accept the problem of climate change," said Reinhardt Hassa, a senior executive at Vattenfall, which operates the plant. "If we want a future for coal, we have to adopt new technologies. It is not enough just to make incremental improvements." But the new plant here, which will be just a demonstration model, pales next to the eight coal-fired power stations Germany plans to build for commercial use between now and 2011 - none of which will be free of carbon dioxide emissions. "That is really a disappointing track record," said Stephan Singer, the director of climate and energy policy at the World Wide Fund for Nature in Brussels. "Just replacing old coal plants with new coal plants won't enable Germany to meet stricter carbon emission targets." Europe likes to think of itself as a place that has moved beyond its sooty industrial past, where its energy comes from the windmills that dot the Dutch countryside and the Danish coastline, or the carbon-free nuclear plants that dominate France's power industry. But with oil prices soaring and worries rising about the reliability of gas piped from Russia, Europe must depend heavily on that great industrial- age relic, coal - a cheap, plentiful fuel, but one that emits twice the carbon dioxide of natural gas. Coal-fired plants generated half the power in Germany and Britain during this year's chilly winter. While Europeans stand out for their commitment to controlling gases that contribute to global warming, some of their largest energy companies are reluctant to invest in technologies that could further protect the environment, like equipment in the demonstration plant here that will trap carbon dioxide and pump it into underground storage areas. Only a handful of such "carbon- free" plants are planned in the European Union. There is another downside to coal, evident barely a mile from the plant here. Bulldozers have begun demolishing a 450-year-old mill town, which blocks the path of the open-pit mine that supplies coal to the plant. The last residents are being forced to pack their belongings and abandon their homes for a new settlement nearby. Such uprooting is an unavoidable cost of Europe's hunger for coal, executives here say, adding that the technology to capture carbon dioxide is too costly at a time when they are spending billions of euros to replace Europe's aging power plants. Finding places to store the carbon dioxide is a headache in countries like Germany, which are densely populated and have a history of protesting against the storage of more troublesome pollutants like nuclear waste. In Europe, where power companies say they have been more diligent than their American counterparts in cleaning up more visible pollutants like sulfur dioxide, some executives are suspicious of current proposals to convert to "clean coal" technology. They describe it as mainly a public- relations ploy championed by the Bush administration and American power companies, even as only a few plants that capture and sequester carbon dioxide are actually planned for the United States. They suspect that the Americans are trying to circumvent mandatory cuts in carbon emissions and avoid making steady improvements in the efficiency of their plants. "There's a lot of media-driven talk," said Alfred Tacke, chief executive of Steag, a major German power generator, with eight coal plants scattered in the Rhine, Ruhr and Saar regions. "In the United States you defer all investments, because in the future maybe you have the perfect solution," said Tacke, who was deputy economics minister under the previous German chancellor, Gerhard Schröder. "I would prefer a solution that improves the situation now." By that, Tacke means using existing technology, like raising the temperature or pressure of the steam that turns the turbine, to make conventional coal plants more efficient. Steag is building such a plant in the Ruhr city of Duisberg - a $1 billion plant that, he claims, will be more efficient than any rival in the United States. The debate over coal in the European Union has to be seen within the context of the Kyoto Protocol, a global climate- control agreement that commits Germany and 34 other nations to measurable reductions in emissions of carbon dioxide and several other greenhouse gases. With a legal imperative to cut emissions by up to a fifth within the next six years, European power companies face a clearer challenge than those in non- Kyoto countries, like the United States and China. Yet while the Kyoto pact has focused minds, environmental advocates say it has not yet pushed companies far enough. Last year, without any extraordinary effort, emissions of carbon dioxide in Germany, Britain and other countries actually came in below the caps set by national governments in the first phase of the Kyoto process, which runs from 2005 to 2007. This, critics said, suggests that the prescribed reductions were not tough enough; much of the improvements were simply a natural outgrowth of slow economic growth and the shutdown of outdated coal operations. Britain and Germany both pledged to impose deeper cuts in the next phase, which starts in 2008 and runs through 2012. "It's true that the first phase of emissions reductions are not that challenging," said Daniel Lashoff, deputy director of the climate center at the Natural Resources Defense Council in Washington. "Europe can make its targets with only incremental improvements." Though Europeans are united in their concern about global warming, they have a patchwork of energy policies. Some countries, like Germany and Poland, remain heavily dependent on coal, while others, like France and Finland, are redoubling their investment in nuclear power. Italy and Spain use a lot of oil and gas, though Italy is converting some oil-fired plants to coal. The recent spike in the price of oil has thrown the spotlight back on coal, even in places like Britain, where the industry had been in a death spiral for decades. Richard Budge, a long-time British coal executive, has announced plans to reopen a coal mine in South Yorkshire. With financing from Russian investors, he also hopes to build a $1.5 billion power plant on the site, equipped with technology to capture and store carbon dioxide. After years in disrepute, coal is still struggling for public acceptance in Britain. The government is drafting a new energy policy that is expected to stress windmills and other renewable energy sources. But economic and geopolitical realities, Budge said, make a bigger role for coal inevitable. "Wind farms only work one day in three, and nobody knows which day," he said, with only a hint of exaggeration. Coal, he said, is not a hostage to politics. When Russia switched off its natural gas pipeline to Ukraine in January over a pricing dispute, gas supplies dwindled all over Western Europe. To Germany and other gas importers, it was a chilling reminder of their vulnerability. "Fifty-eight percent of the world's gas is owned by Russia, Iran and Qatar," Budge said. "Coal is on every continent." Here in eastern Germany, vast deposits of brown coal, or lignite, lurk beneath the table-flat countryside. There are similar deposits in the Rhine and Ruhr valleys in the west. Though Germany has been mining in these regions for decades, they are far from exhausted. So great is the demand that the government allows companies to forcibly resettle villages that lie in the path of excavators. The process is costly, litigious and can take more than a decade. "This is a very difficult issue for us," said Hassa, the Vattenfall executive, noting that his company has begun negotiating with 230 residents of a village next to a mine, for a relocation that would not happen until 2018. Haidemühle, the village being swallowed by the Schwarze Pumpe mine, acquiesced to relocation fairly quietly. Among the few holdouts was Heinz Attula, 84, who said Vattenfall did not pay him enough for his property. But even he was ready to move to a new home provided by the company. "It's not an easy step," Attula said, as he walked his dog past deserted houses and a ghostly schoolyard recently. "I've lived my whole life in this town. But I know the mining must go on."