‘Green’ Europe: Coal To Displace Gas, Says IEA
Coal has been displacing gas generation in Europe since 2009 and the International Energy Agency expects this trend to continue, Ms Anne Sophie Corbeau, senior gas analyst for the International Energy Agency said that “We will have a Golden Age of Coal in Europe, at least over the next 5 years.”
Ms Sophie said that gas demand in Europe is squeezed between low electricity demand, renewable energy and coal generation. The disastrous drop in gas demands mostly comes mostly from 2 sectors industry and power generation.”
According to IEA’s electricity statistics published in its ‘Gas medium term market report 2012, across Europe, despite a drop in both nuclear and hydro power, combustible fuels still generated some 60 TWH less electricity in 2011 than the year before.
In the absence of a higher price for carbon emissions and low power demand in the ongoing recession, gas fired plants are projected to struggle in finding their place in the merit order. In Germany, Spain and the UK the use of gas in the power generation sector is decreasing, while coal generation in on the rise.
Ms Corbeau said that “The US is sending us all the cheap coal, suggesting this trend is bound to continue.”
She said that North American gas export projects could narrow regional differentials in global gas prices. There are currently 14 applications pending with the US Department of Energy for export approvals of LNG to countries subject to free trade agreements, as well as to non FTA countries. To date, only Cherniere’s Sabine Pass projects has received non FTA approval and she added that only projects with non FTA approval are likely to materialize.