A new life for old coal power? (BMO GAM)

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However, closure of coal-fired power comes with a social cost, as the Just Transition2 agenda reminds us. Whole communities may be reliant on their local coal power station for jobs. And financially, the potential retirement of coal plants before their scheduled date leaves companies with significant ‘stranded asset’ risk.

Faced with these issues, some companies are now looking to repurpose their coal-fired power plants instead of closing them, by replacing coal with alternative fuels – particularly biomass from wood. Power companies in the UK and Denmark have already taken this step, with plans by companies in other countries including Germany, Japan and Finland now being developed.

Promotion

In theory, the idea of biomass energy is appealing. Rather than the linear process of extracting and burning coal – a non-renewable resource – biomass holds out the promise of a circular process: trees absorb CO2 whilst growing and release it when burnt, leading to a carbon-neutral outcome. Biomass also has an advantage over intermittent renewables such as wind and solar in being able to provide a predictable power source.

 

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