ETS price too low for LNG to crowd out coal in power

LNG import prices in Europe have dropped sharply but will still rely on a boost in carbon prices to compete with coal in power generation
By Andreas Walstad 22 June 2017
Grain LNG terminal. The UK’s carbon floor price has helped gas gain market share from coal. (Flickr/National Grid)

Despite a bearish outlook for LNG, prices for carbon allowances will have to move substantially higher before the fuel can replace coal in the European power mix, BP Chief Economist Spencer Dale has said. 

Addressing a Brussels audience on Wednesday, Dale predicted LNG import prices in Europe would remain low but not low enough to squeeze coal out of power generation unless carbon prices under the EU’s Emissions Trading System (ETS) moved much higher. 

The average LNG spot price for delivery into Europe in July is around...

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