Exploration & Production

Surge in EUA prices is good news for gas

The recent bull-run in carbon prices has restored confidence in the EU ETS and may help gas win further market share over coal in power generation The recent bull-run in carbon prices has restored confidence in the EU ETS and may help gas win further market share over coal in power generation.
By Andreas Walstad 15 February 2018 0 29596
a CCGT power plant in Spain. A combined-cycle gas turbine plant in Cadiz, Spain. (Iberdrola)

Benchmark prices for EU carbon allowances hit €10 per ton ($12.4/t) for the first time in over six years on Wednesday, spurring optimism the Emissions Trading System (ETS) is fit to deliver price signals that will incentivise fuel-switching from coal to gas in power generation. 

It is an impressive comeback for a system that many had written off and which has required a high degree of regulatory intervention to address its massive 1.7 billion or so surplus of allowances. 

The EU institutions agreed in November...