German coal-fired profit margins rise as carbon emissions plunge
London (Platts)--3Aug2011/1105 am EDT/1505 GMT
Profit margins for using coal-fired power plants to generate electricity
for delivery in Germany next year have risen to their highest in over a year
as emissions prices fell to their lowest in over two years, while German
year-ahead power and European year-ahead coal prices continue to trade well
above pre-Fukushima levels, traders said.
Platts data Wednesday showed the German year-ahead clean dark spread for
coal-fired plants at Eur9.32/MWh compared with just Eur6.58/MWh a year
European carbon allowances were trading below Eur12/mt for the December
2012 contract, its lowest level in over two years.
By contrast, German baseload power for delivery 2012 is still trading
more than 15% above its early March level, before the nuclear emergency at
Japan's Fukushima reactor prompted the German government to reverse its
nuclear extension plans and halt eight older reactors permanently removing
almost a third of nuclear capacity from the market.
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The contract was heard trading at Eur56.95/MWh by 12:00 London time.
Year-ahead coal into Europe was trading Wednesday at around $128/mt,
more than 25% higher year-on-year.
The clean dark spread is the theoretical gross income made by
35%-efficient coal-fired power plant after accounting for the cost of coal
By contrast, the German year-ahead clean spark spread for gas-fired
power plants remained below zero, but rose to minus Eur1.48/MWh, its highest
in over a month as carbon emissions plunged, while power and gas prices
remained more stable.
The clean spark spread is a measure of profitability for gas-generated
electricity, the theoretical gross income made by a 50%-efficient gas-fired
power plant after accounting for the cost of gas and CO2.
Utilities that can switch between gas and coal would earn Eur10.80/MWh
more burning coal than gas in 2012, the largest premium between the two major
power feedstock fuels so far this year.
Coal-fired power accounted for 18% of Germany's demand last year, while
gas contributed 14%, according to utilities' lobby group BDEW. Nuclear and
lignite, which are mainly used for baseload power, contributed most with 23%
--Andreas Franke, firstname.lastname@example.org