EU Energy Policy

Gas yet to receive boost from higher EU carbon prices

A surge in the price of EU carbon allowances has yet to significantly boost gas-fired power generation in continental Europe, partly because gas prices have also risen A surge in the price of EU carbon allowances has yet to significantly boost gas-fired power generation in continental Europe, partly because gas prices have also risen.
By Andreas Walstad 28 August 2018 0 32306
A coal-fired power plant in Germany. (E.On)

Prices for EU carbon allowances have reached their highest level in 10 years, but there is still little evidence of a large-scale switch from coal to gas in power generation across Europe. 

Data published by German research organisation Fraunhofer shows that gas currently produces less than 10% of Germany’s electricity, whereas coal and lignite produce a combined 40-60%, depending on factors such as wind levels. 

Some analysts had expected prices would cause a large-scale switch from coal to gas once they...