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IEA Forecast Coal to Gas Switching Potential

NATURAL GAS

The steep decline in European gas prices, together with the strong gains in carbon prices are putting coal and gas-fired generation in closer competition for 2023 according to the IEA.

  • TTF prices collapsed by close to 60% since last mid-December, one of its steepest drops on record.
  • Rotterdam coal prices meanwhile were more resilient, while carbon prices rose to above €90/t mark.
  • The combination of these factors is gradually changing the outlook for fuel-switching dynamics in the power sector, with the most efficient gas-fired plants now entering the coal-to-gas switching range.

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