According to a report from Carbon Tracker , coal power generators in Europe face losses of €6.6 billion this year as plunging renewable energy costs and cheap natural gas cut use of coal to a record low. The report says that almost 80 per cent of lignite and hard coal-fired generators will be unprofitable this year. Carbon Tracker said that the report demonstrates the need for a continent-wide phaseout of coal in power generation by 2030.
Utilities in Germany, Spain, and the Czech Republic are the most exposed to falling profits, with the rising expense of carbon emission permits making it less attractive to burn the fuel for power. Germany has already announced plans to shut all its coal plants by 2038, and Spain has set a deadline of 2030.
While European year-ahead coal prices have dropped to €60 a ton from more than €90 a year ago, EU carbon permits have surged fivefold since 2017. That has driven up the cost of burning coal. At the same time, benchmark gas contracts are trading 27 per cent below their 10-year seasonal average, encouraging utilities to use gas instead.
Matt Gray, Head of Power and Utilities for Carbon Tracker, said: “EU coal generators are haemorrhaging cash, because they cannot compete with cheap renewables and gas, and this will only get worse. Getting off coal is cheap, and can be a win-win for consumers and shareholders, providing governments and investors work with local communities.”
RWE has said that it disagrees with the analysis. A spokesperson from RWE said: “The figures stated and assumptions do not stand up to a fact check. They are false and cannot be used as a basis for any serious treatment of this topic.”
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