Coal news and updates

Poland used less coal for power generation last year as imports of cheaper electricity from Sweden replaced output from the most polluting plants.

 

Output from coal plants dropped by 5.1 percent from 2013 and production from lignite-fed stations fell 4.8 percent as the country become a net electricity importer for the first time since at least 2005, according to data on grid manager PSE SA’s website. Imports via an undersea cable from Sweden tripled.

 

The Nordic region generates about half its electricity from hydroelectric plants and almost a quarter from nuclear reactors, with the rest coming from gas, coal, biomass and wind. Poland produces almost 90 percent of its power from coal or lignite, the most polluting electricity source, with 60 percent coming from less-efficient plants more than 30 years old.

 

“Cleaner power from the Nordic region is crowding out output from Polish coal units,” Flawiusz Pawluk, head of equity analysis at UniCredit CAIB in Warsaw, said yesterday by phone.

 

Polish power for next year averaged 169.03 zloty ($46.21) a megawatt-hour in 2014, 26 percent above the price of the comparable Nordic contract on the Nord Pool Spot exchange in Oslo. Imports from Norway rose to 3.1 terawatt-hours, the PSE data show, accounting for 2 percent of total consumption.

 

An aging generation fleet and high production costs made output at many Polish coal plants unprofitable, according to Pawluk.

 

“This trend won’t change unless Polish power rises significantly above 180 zloty per megawatt-hour and the cost of emissions and coal stay unchanged,” he said.

 

Polish power for 2016 last traded at 180.50 zloty a megawatt-hour, according to broker data compiled by Bloomberg. European coal for 2016 dropped as much as 1.6 percent to $59.90 a metric ton, broker data showed, while EU carbon permits retreated as much as 1.1 percent to 7.17 euros a ton, according to ICE Futures Europe data.

 

 

Source: Bloomberg