Renewables to phase out European coal demand - WoodMac

Energy Analytics 26 September 2022 10:04
Baku, Azerbaijan Trend News Agency Maryana Akhmedova
Renewables to phase out European coal demand - WoodMac

uropean coal demand is expected to increase by 14 percent in 2022 to 98 million metric tons to cope with the current gas supply crisis, although, this will not be long-term, Wood Mackenzie, a global research and consultancy group, forecasts, Trend reports via WoodMac.

As WoodMac analysts estimate, of the additional 9 GW coal capacity provided, only 4.4 GW will be on the market, while the rest will be used as an emergency reserve in the event of a power shortage - although coal-fired power is more economical than natural gas.

“Coal prices are surging, but they are still more affordable than record-high gas prices. While this scenario has made for a slight resurgence, we believe that this will be a relatively short-term event and we do not see companies making major investments to increase infrastructure or long-term production,” the experts say.

According to WoodMac’s projections, renewables will eventually phase down coal on the market by the end of the decade.

“We expect higher European coal-fired generation to last until the middle of this decade. However, imported higher-quality coal generation will still be phased out completely by the end of the decade, although lower-quality domestic lignite generation could extend much further. The higher energy price outlook and supply security concerns make renewables more attractive. We think we will see an additional 35 GW of solar and 15 GW of wind by 2030 in Europe, driven by policy changes such as Germany’s doubling of its 2030 solar target to 205 GW from 100 GW,” WoodMac forecasts.