Ripe for closure

Accelerating the EU's energy transition and saving money by reducing excess fossil fuel capacity

In this report with Centre for Research on Energy and Clean Air (CREA), we estimate excess operating fossil fuel-fired electricity capacity in 9 European countries. The report aims to contribute to the identification and genesis of fossil fuel overcapacity, whose retirement could yield savings for energy consumers, essentially avoiding carbon emissions every year without compromising the security of supply.

Bulgaria, Czech Republic, Germany, Italy, Netherlands, Poland, Romania, Spain, and Turkey could retire close to a combined 48.8 gigawatts (GW) of excess fossil fuel capacity and still keep the light on, even on the most demand intensive days. Approximately 77% of this excess capacity comes from coal.

Their retirement would yield annual savings of €1.9 billion ($2.1 billion) from not having to pay for fixed operations and maintenance (FOM) costs on the unneeded and underutilised plants.

Overcapacity has capital, operating and opportunity costs. The timeline for phasing out coal and decreasing the share of fossil fuels in Europe will be crucial in the rapid transition to a carbon-neutral economy. Capital sunk in building new fossil fuels and the FOM cost of keeping excess capacity online could be spent on zero-carbon technologies and the just transition. This would reduce the vulnerability of these grids to volatile commodity prices and expedite a coal phase-out – a goal that we found many countries could reach before or by a 2030 deadline.