The energy crisis in Europe continues, and gas prices have reached their highest level in three years. This month, the price of gas has increased to $90.98 per megawatt-hour. These conditions have led many European countries, especially Germany, to return to coal-fired electricity generation.
The Impact of Gas Prices on the European Energy Market
Gas prices have risen so high that coal-fired electricity generation has become more economical than gas for the first time in recent years. This change in economic equations has pushed many European countries back towards the use of coal. Experts predict that this trend will continue until 2028, as gas prices are expected to remain high.
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Challenges Facing Coal Use
However, it should be noted that years of policies aimed at reducing coal use have led to a significant decrease in the number of coal power plants in Europe. According to Eurostat data, in 1990, the European Union sourced more than one-third of its electricity from coal, which is expected to drop to 9.2 percent by 2025. Therefore, despite the increase in coal use, its production capacity in Europe faces limitations.
Globally, coal remains the largest source of electricity generation, and while Europe continues to reduce its coal production capacity, many developing countries, particularly in Asia, are still building their coal-fired power plants. This trend is particularly evident in the Philippines and Indonesia.
Ultimately, while coal is recognized as a cheap and abundant resource, its environmental consequences, including the production of 40 percent of greenhouse gases, cannot be overlooked. For this reason, alongside the return of coal, we are also witnessing a significant increase in clean energy sources. Renewable energy sources are expanding as a forward-looking solution to global energy crises.
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