Coal power plants in Europe will lose $7.3 bln this year

Source: Bloomberg

From Bloomberg:

Coal power generators in Europe face 6.6 billion euros ($7.3 billion) of losses this year as plunging renewable energy costs and cheap natural gas cut use of the dirtiest plants to a record low.

Almost 80% of lignite and hard coal-fired generators will be unprofitable this year, a hit the industry is unlikely to survive without government help, according to a report from Carbon Tracker. The research group pushing for lower greenhouse gas emissions calls for a continent-wide phaseout of the most polluting fossil fuel by 2030.

Utilities in Germany, Spain and the Czech Republic are the most exposed to falling profits in a year where falling coal prices and rising carbon emission permits make it less attractive to burn the fuel for power. Coal’s days are already numbered in Germany, which plans to shut its plants by 2038, and Spain has set a 2030 deadline. [The U.K. has set a 2025 deadline]

While European year-ahead coal prices have dropped to about $66 a ton from more than $100 a year ago, [the price of] EU carbon permits [has] surged fivefold since 2017. That has driven up the cost of burning coal. At the same time, benchmark gas contracts in the Netherlands are trading 27% below their 10-year seasonal average, encouraging utilities to use that fuel instead.  For most of this decade it was more profitable to burn coal in Germany, but that relationship was turned on its head this year because of a glut of gas.

“EU coal generators are hemorrhaging cash because they cannot compete with cheap renewables and gas and this will only get worse,” said Matt Gray, Carbon Tracker’s head of power and utilities. “Getting off coal is cheap and can be a win-win for consumers and shareholders, providing governments and investors work with local communities.”

As one can see, a carbon price encourages rapid substitution of high-emission generation with low-carbon generation.  The carbon price ("CO2 European Emission Allowance") has risen from 5 Euros in 2017 to 27 today.  And it's driving coal power stations towards closure.  As a basic first step to zero emissions as soon as possible, we must build no new coal power stations anywhere in the world and must close down those we have as soon as we can.