Trends in Power Generation: Backswitch from Gas to Coal?
- Sep 15, 2021 12:03 pm GMT
In the course of 2021 so far, prices on the energy markets have reached record highs. Coal and gas prices in particular have risen sharply, reaching their highest levels in over a decade. These developments have partly led to a backswitch from gas to coal-fired power generation and thus, in connection with rising CO 2 prices, also to high electricity prices. In the following we want to clarify the connections a little.
The prices of the front months and quarters for the fuels hard coal and gas have reached over 13-year and even all-time highs in the past few weeks. On the coal price side, rising global electricity demand led to higher consumption. Together with the simultaneous delivery restrictions due to strikes and weather events in Colombia and Australia, this led to sharply rising prices. The prices of the API 2 index for hard coal more than doubled from just under USD 70 / ton at the beginning of 2021 to over USD 160 / ton in September.
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