A carbon rally to push coal out of the European energy mix
Rising carbon prices are only gaining momentum, and given the EU’s ambitious emission reduction targets, it is only a matter of time before the US reaches another level. psychological. In this context, the room for maneuver of coal-fired power stations in Western Europe is extremely limited.
The importance of increasing carbon allowances can hardly be overestimated, as evidenced by the fact that spark spreads in the region have remained much higher than bleak ones in recent years. Between April 1 and May 7, 2021, the indicative base load differential for the month before for an average yield NWE gas power plant was € 0.7 / MWh, while that for a coal-fired unit of 40 pc was less € 5.5 / MWh. Still, TTF Month-Ahead prices rose more than 25% compared to a 14% increase in ARA coal prices during this period.
Coal still plays an important role in the energy mix of Western Europe, especially in Germany, as a large part of lignite and hard coal production was covered in previous years with carbon prices ranging from € 5 at 25 € / tCO2. Meanwhile, each new record set for the EUA prize is a reminder that the future of coal was predetermined, just as it was virtually inevitable that Pep Guardiola’s side would return to the UEFA Champions League final 🙂 But s ‘it took ten years for the Catalan boss to reach this stage, coal may more quickly become a thing of the past in Western Europe.
The opinions expressed in this blog are my own and do not reflect the opinions of my employer.