Dutch 2021 gas-fired output falls, as coal gains bigger share in power mix

Gas-fired power production in the Netherlands fell in 2021, as coal gained a larger share in the power mix, an analysis by S&P Global Platts showed Jan. 5.

Dutch gas-fired generation declined 18% on the year to 40.35 TWh in 2021, according to data from Fraunhofer ISE, as record high prices made gas unattractive for power production. That boosted coal-fired production 69% on the year to 20.5 TWh, even as aggregate wind output increased on the year. Offshore wind generation jumped 73% to 8.25 TWh, more than offsetting a drop in onshore wind output.

Biomass and waste output was down 7% and 5%, respectively, during the year.

Aggregate Dutch power demand slipped to 106.5 TWh in 2021, from 108 TWh, a year earlier.

January outlook

Dutch gas burn in January has been sluggish, as mild weather leads to weak heating demand, with prices favoring coal over gas for electricity generation.

Gas-fired generation averaged just about 2 GW Jan. 1-4, according to Fraunhofer, compared with more than 5 GW in January 2021.

The Dutch TTF front-month and front-quarter gas contracts have remained firmly above corresponding Coal Switching Price indicators (CSPI) in recent weeks, data from S&P Global Platts Analytics showed.

That could discourage strong gas burn in the Netherlands during winter, as the new 50%-efficient gas-fired plants become unprofitable to run, compared with the 40%-efficient coal units. The older 45%-efficient gas plants fell out of favor, as they provided almost the same efficiency, particularly on the near curve, compared with the coal units.

Platts Analytics expects Dutch gas-fired production to drop to 3.7 GW in 2022, from 6.4 GW in 2021, with November 2021 and December 2021 production based on scaled data, according to a most recent forecast from Dec. 16.

The Netherlands has limited high-calorie gas availability to spare for power generation.

Dutch aggregate gas storages were 36.1% full as of Jan. 3, firmly below 67.4%, a year ago, the most recent data from Gas Infrastructure Europe showed.

This was driven by low stocks at the high-calorie Bergermeer storage site, where Russia's Gazprom holds considerable capacity, with the facility just 23.3% full Jan. 3. Stock levels of low-calorie gas -- mostly used for heating purposes -- were higher.

The weather in the Netherlands is expected to stay milder-than-average until at least Jan. 11, according to CustomWeather, with temperatures in Amsterdam forecast to hold at 2 C above seasonal norms. That could keep heating demand lower, although an ongoing national lockdown in the Netherlands could force people to stay at home longer, driving up consumption.

Source: Fraunhofer ISE