European power plants shift back to coal as gas prices surge
Rising natural-gas costs are prompting European utilities to increase coal-fired electricity generation while cutting gas output.
European electricity producers are reverting to coal because natural-gas prices have jumped sharply after a conflict disrupted supplies through the Strait of Hormuz. Wholesale gas prices have climbed above €80 per MWh, far higher than pre-conflict levels near €30 per MWh. This price gap has rendered coal plants financially attractive, reversing a trend that saw coal’s share of EU power fall to a historic low.
Analysts forecast a roughly 25% increase in coal-generated electricity over the next half-year, with a corresponding decline in gas output. However, the limited number of coal facilities means the increase may soon reach its limit, especially if gas prices continue to rise.
Why it matters
Higher coal use could affect emissions targets and electricity costs across Europe.
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