Despite the increase in coal and carbon emission prices, it has lagged behind the jump in natural gas and has become more cost-effective, albeit short-term.
The benchmark carbon emission license fee in the European Union’s Emissions Trading System (ETS) has nearly doubled since the start of the year. On the other hand, in the same period, the wholesale natural gas prices in the Netherlands-based TTF market increased 4 times.
According to Euronews, the ETS, which was established with the goal of reducing carbon dioxide gas emissions into the European Union’s air, collects a fee per ton of air released from power generation plants and industrial plants.
For more than 2 years, natural gas cycle power plants have been more advantageous than coal-fired power plants due to the additional cost of carbon emissions. However, with the increase in prices, this situation has changed since July.
With the rise in natural gas prices, the producers in England, where coal’s share of the energy infrastructure is 2 percent, have turned to oil-fired power plants.
The electricity produced by lignite and hard coal in Germany in the second quarter of the year increased from 28 terawatt hours to 35.1 terawatt hours in the third quarter.
Energy experts say that hard coal and lignite will continue to be more advantageous over natural gas in the next few quarters.
Ahead of the United Nations Climate summit in Scotland in November, the EU wants major carbon emitters to do more to meet its climate targets. However, market conditions force the opposite.