And it's braunkohle, probably the funkiest of all the fossil fuels.
From S&P Global Platts:
High global gas and LNG prices are impacting the power mix in countries as far apart as Germany and Bangladesh. Plus, Middle East-China tanker freight rates, US gas prices and Asian refining.
1. Coal surges in German power mix as wind drops, gas price soars
What's happening? Lignite was the main source of electricity generation in Germany in the week to Aug. 8, with renewable generation sharply lower across the period. Margins for lignite and hard coal-fired generation stood at Eur12.24/MWh on Aug. 6 versus minus Eur13.77/MWh for gas-fired generation, ensuring coal ran ahead of gas where possible. Increased fossil-fired power in general is in part due to a below-norm year for wind speeds in Europe. On Aug. 12 Orsted reported an average offshore wind capacity factor of just 29% for H1 2021 vs a five year average in the UK of around 38%.
What's next? With the gap between coal and gas generation spreads so wide there is every chance coal will continue to run ahead of gas. Ahead of the season change and an expected improvement in wind input, gas looks set to remain the price-setting unit, with front-month German power trading as high as Eur96.00/MWh, a 13-year high. On Aug. 11 German utility Uniper said its CO2 emissions had risen 19% in H1 due to a 45% hike in fossil firing year on year (see chart). It expected similar levels of coal generation for H2 2021, maintaining H1's higher carbon intensity....
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