A boom in new-built solar capacity Germany, with up to 3,000 MW of new-built capacity in a single month, proves detrimental for gas-fired power generation capacity. "Feed-in tariffs and 'insanely over-funded' renewable energy supply is the fundamental flaw in Germany's energy transition, says Helge-Jürgen Beil, Vice President Asset Origination, Statkraft Markets GmbH.
For power producers to prefer gas over coal as a fuel for power generation the price of carbon emission allowances would have to rise to €40-50/ton, Thijs van Hittersum, Natural Gas Analyst, International Energy Agency said at a conference organised by Gas to Power Journal in Brussels today.
Regulatory interventions such as the proposed backloading of up to 900 billion carbon emission allowances (EUAs) into the third phase of the ETS is, however, in his view "most likely not sufficient to solve the oversupply situation in the carbon market."
Britain's energy supply is in jeopardy as available power generation capacity is on "a roller-coaster ride heading downhill", said Ofgem chief executive, Alistair Buchanan, in a stark warning that the combination of power plant closures, shrinking gas supply availability and rising energy demand has made reserves margins "uncomfortably tight".
Withdrawing carbon emission allowances (EUAs) in the third phase of the European Emissions Trading System (EU ETS) could help improve the profit margins of gas-fired power plants in Europe, suggests Torsten Amelung, Managing Director of Trading, Origination & Business Development at Statkraft Markets.
The Ratnagiri Gas & Power Pvt Ltd (RGPPL) has resumed generation this morning and is currently generating 250 MW against its total capacity of 1,967 MW, a company spokesman confirmed to Gas to Power Journal. The plant was shut down in the morning hours of February 7 due to non-availability of gas supply.
Keeping existing fossil capacity in the market will "prove to be difficult" and many European utilities "will abstain from investing" in new plants without capacity mechanisms as long as the current market situation with low electricity demand, low CO2 prices and relatively high gas prices persists, forecasts Jørgen Kildahl, member of the Board of Management at E.ON SE.