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13 Jul 2022, 12:58
Jessica Bateman

Higher gas prices make market-driven 2030 coal phase-out much harder, report finds

Clean Energy Wire

Rising gas prices mean the 2030 coal phase-out date set by the coalition government will be much harder to achieve without political intervention, a short report by the Friedrich-Alexander University of Erlangen-Nürnberg has found. Previous modelling was based on the assumption that natural gas will remain cheap while CO2 prices in the EU Emissions Trading System (ETS) increased, leading to emission-heavy coal and lignite plants becoming expensive and therefore unattractive for investors to keep running.

However, exacerbated by Russia’s invasion of Ukraine, prices for natural gas have increased substantially and are projected to remain high. This means that keeping coal and lignite plants online for longer will become more appealing to investors. Co-author Veronika Grimm, who is also an economic advisor to the government, stressed that it is important to still try and meet the 2030 target date, but that politicians will need to make “quick decisions about the timeline” before investors fail to put in the amount of money needed. The government adopted a regulation this week, that allows operators of certain hard coal plants to temporarily reactivate their units to help reduce natural gas consumption in the power sector.

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