German coal margins turn lucrative as outlook for thermal generation improves
Energy Transition by S&P Global Commodity Insights
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German margins for coal-fired power generation became profitable in the last quarter of 2024 in a rare move as expensive gas spurred fuel switching.
The trend for lower gas for power is likely to persist in 2025 with Germany and Italy expecting demand to average 4.4 GW and 9.3 GW, according to the latest forecast from S&P Global Commodity Insights.
Germany's coal burn during the first half of 2025 is forecast to be about a fifth higher year on year, according to analyst estimates.
"We expect coal output to marginally increase (in H1 2025), weighted to the Netherlands where its higher efficiency fleet is expected to benefit from a more competitive position in the European thermal stack," said Daniel Muir, senior power and renewables analyst at Commodity Insights.
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US electric utilities are calling for fresh policy approaches to permit and fund new infrastructure at the breakneck pace required to meet dramatic demand growth and harden aging systems against extreme weather threats. "Build everything you can as fast as you can," Tri-State Generation and Transmission Association CEO Duane Highley, said Jan. 15 during a United States Energy Association webinar. However, costs will be high because of supply chain challenges and relatively elevated interest rates.
LNG and biofuels are immediate solutions to drive greenhouse gas emissions cuts for shipping, with LNG potentially able to meet as much as 30% of the global bunker fuel mix by 2030, Sing Fuels managing director Sanket Sudhakar Naik said. “If we are talking about 2050, I see the majority of ships powered by LNG followed by ammonia," Naik said, noting the International Maritime Organization has given the industry a "very clear mandate." IMO member states aim to cut life-cycle shipping GHG emissions by 20%-30% by 2030 and 70%-80% by 2040, against 2008 levels, ahead of net-zero close to 2050.
Electrolyzer manufacturer Nel is halting production at a factory in Norway for an indeterminate period and reducing its workforce as weak demand slows sales, the company said. Order intake for Nel's electrolyzers fell short of expectations in 2023 and 2024, and several customers' projects are significantly delayed or at risk of being cancelled, the company said.
Changing weather conditions and efforts to battle supply constraints could further weigh on Canadian power prices in 2025, after a fall in November 2024. The national total electric power selling price declined 4.8% year over year in November, according to a Jan. 14 Statistics Canada report. Prices of power selling over 5000 kW fell slightly more in November at a 6.3% year-over-year drop.
China plans to set a non-compulsory carbon footprint benchmark of 0.415 mt CO2/kWp for its solar PV modules catering for overseas markets, China Chamber of Commerce for Import and Export of Machinery and Electronic Products said. China has dominated the world’s solar PV supply chain for years, however, Chinese manufacturers are experiencing a significant decline in gross profit margins, which dropped by 54% from 2022 to 2024,?
?showed. A key concern of Chinese solar PV manufacturers is whether the EU will introduce a carbon footprint threshold to halt the region’s imports of carbon-intensive solar PV modules, which may impose another burden on Chinese manufacturers, which have already faced severe oversupply issues.