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UK Coal Plants Surge Back Into The Money

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ICIS

Near-ten year highs on winter NBP natural gas prices have pushed coal plants back into contention to take a significant share of the UK’s generation mix over the coming winter.

A recent surge in the value of the Winter ’18 clean dark spread – the notional profit margin for coal plants including emissions costs – has pushed it above the corresponding clean spark.

It raises the possibility that the remaining 11GW of coal capacity in the UK will play a more prominent role in the margins of the market than recent years. This in turn could increase the correlation between European coal prices – already trading at five-year highs – and power products.

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