21 may 2013

“No renaissance” for German coal-fired generation

(Montel) Although coal’s advantage over gas in the German power mix is expected to continue in the near term, there will be no “golden renaissance” for coal-fired generation, the head of Germany’s Coal Importers Association (VDKI) said on Tuesday.

“Gas-fired plants in Germany are barely running anymore, and the dominance of coal over gas will continue,” VDKI’s managing director Erich Schmitz said at the Coaltrans Russia, a Ukraine and CIS conference in Odessa. “But will there be a golden renaissance for coal? Not a bit.”

“In the US, gas is crowding out coal, and in the UK and Germany, coal is crowding out gas. But in Germany, solar power is also crowding out coal,” he said, noting the monthly average of solar power output is increasing in line with capacity growth.

“People think nuclear power is being replaced by coal-fired generation, but this is simply not true,” he said, noting renewables have been filling the gap.

“German power from coal plants is mainly exported, and not replacing nuclear power,” he added.

Gas “out of the money”

Nevertheless, for the time being, coal-fired power generation will remain strong, while gas plants are “out of the money”, Schmitz said.

“Gas will not be in the money for the next two-three years,” he added.

The German 2014 clean dark spread – a measure of the profit margin for burning coal to produce power taking into account fuel costs, including carbon – last stood at around EUR 5.10/MWh, compared with negative levels of around EUR -16/t for the gas equivalent, or the clean spark spread, according to Montel data.

By Laurence Walker in Odessa

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