Low gas prices, warm weather pushing coal out of European generation market

first_img FacebookTwitterLinkedInEmailPrint分享Bloomberg:Cheaper natural gas prices this year are likely to cement Europe’s shift away from coal as a fuel for producing power.Abnormally mild winter weather has cut demand for the fuel as a flood of new supplies entered the world’s biggest gas market. That along with higher costs for carbon-emissions allowances has tilted the economics of generating electricity away from coal and toward using more gas.“Policy makers in Europe are now happy with such low natural gas prices,” said Ewout Eijkelenboom, senior consultant at the Netherlands-based industry adviser Kyos Energy Consulting. “It makes the coal phase-out easier than expected — it is almost a natural way of exiting coal.”Falling gas prices are a global phenomenon. Liquefied natural gas projects are pumping out record numbers of cargoes, cutting wholesale gas costs from the U.S. to Asia. That in turn has helped push down the cost of electricity across Europe, taking some of the heat out of the political debate about energy.Benchmark gas in Amsterdam plunged to a five-month low last week because of the global glut. Market rates for the coming summer are at the lowest since at least 2007. It’s especially notable that the weakness has arrived during the winter, which is peak-demand season.“We’ll need to do something with all that surplus gas,” said Elchin Mammadov, a European utilities analyst at Bloomberg Intelligence. “I’m expecting a further drop in prices and more coal-to-gas switching.”[Vanessa Dezem and Mathew Carr]More: Cheap natural gas is about to kick more coal out of Europe Low gas prices, warm weather pushing coal out of European generation marketlast_img read more