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Markets & Forecasts

Gas boosts European power role despite coal price decline

Gas has improved its position in Europe’s power mix, particularly for the coming quarter, despite a slump in coal prices Gas has improved its position in Europe’s power mix, particularly for the coming quarter, despite a slump in coal prices.
By Alessandro Vitelli 27 February 2019 Europe & Russia / Pipelines, Storage & Power 0 33990
The Staudinger black coal power plant in Grosskrotzenburg, Germany. (EP)

A fall in European coal prices has so far failed to shift power generation economics decisively in favour of the fuel, as weaker prices across the energy complex have helped improve gas-to-power margins.

As of last week, prices for API2 coal for 2020 delivery had dropped by nearly 19% since peaking in October 2018, to $77.50 per ton. The API2 futures contract for delivery in Q2 2019 has plummeted by 25%, to $74.95/t over the same period.

However, these declines have been barely enough to maintain coal’s competitiveness...