Electricity is likely to become cheaper after coal-fired power plants reopen | NOW

On Monday, the cabinet unexpectedly announced that the coal-fired power stations will be allowed to run fully again so as not to endanger electricity production. Now they are only allowed to run at 35 percent of their capacity, but the cabinet is letting that go for fear of a gas shortage. Experts therefore expect slightly cheaper electricity.

The announcement also came as a total surprise to the coal-fired power stations themselves. Uniper, owner of one of the two Rotterdam power stations, will let the AD are not aware of the decision in advance.

In the context of climate targets, coal-fired power stations are currently only allowed to operate at 35 percent of their capacity. They should close completely by 2030. As a result, all four Dutch power stations have already reduced their stocks, so they now have to buy much more coal quickly. That will take a few weeks, says RWE, which operates two power stations in our country, to NU.nl.

An additional problem is that from August that coal will no longer be allowed to come from Russia due to sanctions against the country. “In the short term, that will push the price up a bit,” says Machiel Mulder, professor of Energy Economics at the University of Groningen.

He just doesn’t expect that price to stay that high for long. “Unlike gas, there are still plenty of countries from which coal can be obtained and transporting it is not terribly expensive,” he explains. The United States, China and Australia also produce coal.

‘Coal market is much broader and more flexible than that for gas’

Energy expert René Peters of the TNO research institute also sees this as the easiest and most feasible option in this situation. “The volumes we are talking about in this case will have little impact on the global coal price,” he thinks. “The coal market is much broader and more flexible than that for gas.”

In addition, the electricity price will probably fall slightly if more electricity is produced from coal. “It’s cheaper to make electricity with coal than with gas,” says Peters. “So now that the power stations are opening again, the price could go down a bit, although it won’t immediately go back to the level it was before the increase.”

Currently, about 55.30 billion kilowatt-hours of electricity are produced each year with natural gas, while coal accounts for only 16.54 billion kilowatt-hours. It is not clear how those proportions will change after the reopening.

Source: NU by www.nu.nl.

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