Sostanj lignite thermal power plant unit 6, Slovenia

TEŠ6 promises higher efficiency, but not low-carbon energy

TEŠ6's promoters argue the power plant’s new unit will increase efficiency and reduce CO2 emissions, but forget to mention that it will effectively prevent the necessary national emission decreases from taking place.

Operating TEŠ6 will result in emissions of 3.4 mt CO2 per year, which is equivalent to almost all of Slovenia’s emissions in 2050 (if it cuts emissions by 80 percent – a minimum according to the European targets of 80-95 percent).

The false hope of carbon capture and storage (CSS)

The CCS-readiness, claimed by TEŠ6 promoters, consists only of reserved space next to the construction site for an installation to capture CO2. This is as sophisticated as CCS-readiness can get, since the technology does not (yet) exist for a power plant of this size and its effectiveness is highly uncertain.[1]

Environmental Law Service and the Bellona Foundation have analysed how CCS-readiness has been assessed for the Šoštanj project. The study (pdf) concludes: "[T]he information contained within the documents [...] does not allow for the assessment of the feasibility of the project – neither technical nor economic feasibility, nor the availability of suitable storage sites." [2]

Using the promise of CCS to muddy the waters, public money is being invested in Russian climate roulette.

Hidden long-term costs for Slovenian economy

Since initial project proposal, the project costs have already risen from around EUR 700m-900m to EUR 1.2bn. The wider economic consequences, however, are not reflected in this figure: Energy from coal has to take expected changes in the price of CO2-emissions permits into account. These permits will need to be purchased by Slovenia as part of the EU Emissions Trading Scheme.

Alternatives need to be identified

Slovene NGO Focus and Bankwatch believe that there is potential for renewable energy sources as yet unexploited in the country. Also the energy demand could be easily reduced by energy efficiency measures.

Slovenia is nearly 60% forested and there is likely to be further potential from locally sourced sustainable biomass.

Even the conservative governmental proposal for the National Energy Programme 2010–2030 (July 2011) shows in one of the scenarios that a future without TEŠ6 and new nuclear reactors is possible. This finding is further strengthened by an analysis of the Wuppertal Institute suggesting a higher potential for energy efficiency investments and development of renewables than envisaged in the Slovenian proposal.

Šoštanj as a negative precedent for coal subsidies in CEE?

EIB and EBRD support for Šoštanj leaves the door open to the many more coal projects in central and eastern Europe seeking EIB financing. In Poland alone projects with a combined capacity of 12GW are being considered right now.

Without a clear commitment by European public banks, Slovenia and the rest of the region will not meet the EU’s emission reduction targets and will thus navigate Europe and the world away from a future with sustainable energy production.

Bankwatch believes that the IFIs should not lend for coal projects at all and should also phase out lending for other fossil fuels.

Notes

1. For more details, see Greenpeace International's briefing (pdf) on the topic. (The briefing illustrates the controversy around CCS but should not be understood as Bankwatch's exact position.)

2. Bellona's general approval of the CCS technology is counter to Bankwatch's position. We do not believe that CCS is an option for solving the climate crisis.