ShreeMetalPrices: Energy – Scarce, Europe is seeing a return of coal, Driving up prices


As Moscow cuts off vital pipeline flows,. Return of Coal is once again emerging as a crucial energy supply for European nations scrambling to replace increasingly scarce natural gas.

Russia uses its energy exports as payback for sanctions,. Europe is ensnared in a rising energy crisis. In order to guarantee their energy sources before winter sets in, nations like Germany are turning to coal.

According to Energy statistics, the amount of Coal used in power generation has increased by over 20% in France, Germany, Italy, the Netherlands, Spain, and the UK since last year. This year,. Coal usage has surged in European nations. “Coal is definitely making a comeback, with skyrocketing natural gas prices and drought, Now it is all about surviving the winter.”

The market and consumer trends affecting coal and if they will result in continued price increases for the fossil fuel.

Increased Prices for Natural Gas

The constant flow delays from Moscow have driven up the price of natural gas in Europe by 300% this year, reaching record highs in August. That has led energy providers in Austria, the Netherlands, and Italy to consider using coal once more.

The large German utility Uniper has restarted a coal-fired facility until April 2023. For the majority of 2022,. Coal has been the less expensive alternative for generating electricity. The limited supply of gas in Europe has also helped coal, according to an energy analyst.

For the next 2.5 years,. Coal is anticipated to be the More Affordable Alternative fuel given current costs. As the energy crisis intensified last week, global coal prices rose to their highest level since 2008. European coal prices alone have increased by roughly 150% since the beginning of the year.

Russian natural gas supplies lost to Europe are having an impact on international energy markets. Other fossil resources, including coal and oil, are moving from international markets to Europe as a result of the region’s absurdly high costs, he claimed. “As a result, coal prices in Europe and Australia are currently nearly five times higher than the baseline level.”

Winter is Coming

Governments in the EU are under pressure to ensure energy supply during the winter months, when homes and businesses need more electricity. “We anticipate a really difficult winter. Q4-22 and Q1-23 will be challenging, and as this storm approaches, Europe probably needs all the additional options they can get their hands on “. The EU’s ban on Russian coal imports, which went into effect in August, makes the situation worse.

According to Commerzbank, the bloc imports roughly half of its coal from Russia, with the majority going to Germany and the Netherlands. These nations won’t have any choice but to rely on imports from nations like the US, Australia, and South Africa. Finding sellers elsewhere to close the gap, though, can be challenging.

Right now,. There is a severe shortage of coal in the international market. “We know it’s quite tough to ramp up production, especially in nations like Australia or Indonesia,” says the Statistics Researcher.

Hydropower crunch 

Extreme summer heatwaves in Europe have reduced water reservoir levels, resulting in a hydroelectric shortage and increasing interest in coal.

Norway,. A major electricity exporter to Europe, intends to reduce these exports to enable the refilling of its hydroelectric reservoirs. This year, the combined hydroelectric output of seven European nations was reduced by more than 18% . “Natural gas costs and limited hydroelectric power supply in the future, the rising need for coal is expected to be sustained “ a statistician remarked.

However,. The drought also caused the River Rhine’s water levels to reach crisis levels, disrupting a vital conduit for transporting coal across Europe. The German government is concerned that this winter there might be a scarcity of coal.

When Will it End ?

There is a good chance that coal prices will continue to rise because the Russian squeeze is not expected to stop soon. A statistician says, however, is of the opinion that the EU will quicken the growth of renewable energy, which will result in a decline in coal use in Europe by 2024 at the latest. “In the near future, coal is making a comeback. In the long run, not so much “. – SHREE METAL PRICES