ENTSOG TYNDP 2015

GW

250

200

150

100

50

0

2010

2012

Gas

Hard Coal

Lignite

Oil

Mixed

Other

Figure 4.5: Evolution of net generating capacity for fossil fuel power in 2010 and 2012 (Source Yearly Statistics & Adequacy Retrospect 2012 ENTSO-E, ENTSOG depiction)

One reason for the ongoing high use of coal for power generation, at the expense of gas, is the price difference between the two fuels. Considering data from DG Energy, the European coal price has shown a stable downward trend in recent years. This trend has accelerated with a 25% decrease between January 2012 and November 2014. Gas prices have been at a higher level in the same period. This large price difference might continue as long as the US benefits from the shale gas boom, which has reduced their domestic coal demand. At the same time the Asian region is showing a moderate growth in coal demand. A reversal of this trend cannot be excluded, and could be induced by several factors including: \\ Increasing world-wide liquefaction capacity and especially in the US \\ A gradual re-commissioning of nuclear power stations in Japan \\ Enhanced competition between gas producers This would result in a reduced LNG price differential between the EU and the Asian gas markets and increasing competitiveness of gas as a power generation fuel.

40 35 €/MWh

25 30

20

15

10

5

0

Jan 12 Mar 12 May 12 July 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 July 13 Sep 13 Nov 13 Jan 14 Mar 14 May 14 July 14 Sep 14 Nov 14

Coal (CIF ARA spot)

Gas (NBP day-ahead)

Figure 4.6: Evolution of European spot prices for gas and coal (Source Quarterly Report on European Gas Markets, DG Energy, volume 6 (Q3/Q4 2013) and volume 7 (Q1/Q2 2014), ENTSOG depiction)

Ten Year Network Development Plan 2015 |

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