Austria Returns to Coal Era in Hedge Against Russian Power Play

(Bloomberg) — Austria is returning to the coal age, reviving use of the dirtiest fossil fuel to generate power as Russia curbs flows of natural gas to Europe.

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State-controlled Verbund AG, Austria’s biggest utility and most valuable company, was ordered late Sunday to prepare its mothballed Mellach coal-fired station for operation. The plant, 200 kilometers (124 miles) south of Vienna, was shut two years ago as Austria became only the second European country to eliminate coal entirely from its electricity grid.

“The government and Verbund have agreed to convert the Mellach district heating plant, which is currently shut down, so that electricity can be produced again from coal in an emergency,” Chancellor Karl Nehammer’s coalition said in a statement.

Austria joins other European nations, including France, Germany and the U.K., in extending the the life of coal-fired power following Russia’s invasion of Ukraine. Russia is reducing natural gas shipments to the Alpine country, where storage depots contain just 39% of the Austria’s annual needs.

The Mellach station, which also includes a combined-cycle gas-fired plant, provides heat and electricity, to Austria’s second-biggest city of Graz. After it was closed, Verbund turned the coal station into a center for researchers looking for ways to safely feed hydrogen fuel onto the power grid.

The Austrian government, which pledged 6.6 billion euros ($7 billion) to build gas reserves before winter, reiterated plans to impose a “use-it-or-lose-it” law requiring storage owners to fill depots. That probably won’t include Gazprom PJSC-owned Haidach, one of Europe’s biggest underground reservoirs, which remains empty because of a conflict between Germany and Russia.