The switching of coal for gas in European power generation is a highly price responsive source of gas demand flexibility with an influence on global as well as European pricing according to Timera Energy.

• Europe still has more than 20 mtpa of power plant switching potential despite significant coal closures over the last 5 years. Europe still has a substantial volume of coal capacity, particularly in central and eastern Europe.
• Coal & carbon prices have more than doubled since the start of 2021, materially increasing the Coal Switching Price (CSP) range compared to pre-crisis levels.
• The pull back in gas prices during 2023 has enabled switching levels to reassert their influence on TTF & JKM forward curves prices.
• Timera however expects a reduction in the European power switching response as coal plants close, particularly into the 2030s.

Source: Timera Energy