Zero commercial generation from GB coal forecast for Q4: Platts Analytics

London — Current fuel and carbon economics mean S&P Global Platts Analytics is assuming zero commercial running from Great Britain's coal plants for the rest of the year, managing analyst Glenn Rickson said Aug. 7.

Since April, when GB coal generation averaged a paltry 140 MW, coal has been off the system barring a fleeting appearance in June, due to a mix of high carbon costs, cheap gas and lower demand.

"The start of the 1-GW IFA2 interconnector should also work to squeeze out domestic coal," Rickson said. "We're forecasting zero coal through to 2021, even in November/December, which would be unprecedented."

While GB coal plant was uniquely hampered by the Carbon Price Floor mechanism, the near-term outlook was almost as poor for continental coal plant.

"Even though we remain bearish for coal prices and see some downside potential for the EU ETS price from its July highs of nearly Eur30/tCO2e, in normal weather conditions fuel economics will keep coal running in EU-10 markets below 10 GW until October in our forecast," Platts Analytics said in its weekly UK electricity report Aug. 5.

Meanwhile a widening thermal gap in the mix due to reduced nuclear availability had, and would likely continue to be, filled by gas generation, Platts Analytics said.

EU-5 (France, Germany, Italy, Spain, GB) gas-fired generation increased by a combined 7.5 GW in July versus June to 48.87 GW -- only 1.22 GW down year-on-year.

Plus-44 GW levels were forecast for EU-5 gas plant through September and the whole of Q4, peaking above 46 GW in November.

"We expect EU-5 gas generation to average slightly below equivalent 2019 levels in September, October and November, and we see it overtake 2019 levels in December, despite aggregated demand remaining significantly lower," Platts Analytics said.

For the rest of Q3 and Q4, Platts Analytics assumed power demand losses of 3% to 5% versus the five-year average, reflecting behavioral and economic impacts from COVID-19.

With Aberthaw and Fiddlers Ferry closed at the end of March this year, GB has three operational coal stations left, at Drax (1.2 GW), West Burton A (2 GW) and Ratcliffe on Soar (2 GW).

"Drax is scheduled to stop running from coal in March next year, which probably means it will need to run down its stocks "out of merit" -- but that shouldn't affect Q4 this year," Rickson said.