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German coal supply squeeze set to ease on rain – traders

CoalPower

26 Nov 2018 12:28

Frankfurt

26 Nov 2018 12:28

(Montel) The expectation of some rain in Germany over the coming ten days will ease some supply bottlenecks to operators of hard coal-fired plants, market sources said on Monday.

Power prices look set to soften this week due to healthy wind output, one trader said.

“This will push coal out of the market and buy some time for the operators to get hold of more coal,” he added.

German day-ahead prices are forecast to average at EUR 58.06/MWh this week according to Energy Quantified (EQ), a Montel company, down from last week’s average at EUR 61.73/MWh.

Record low water levels on the Rhine, Germany’s most important shipping route, have forced operators of hard-coal-fired units to switch to transportation by rail, or even by road.

Several firms have highlighted transportation issues.

On Friday, Vattenfall flagged “restrictions on the transportation of coal” for its three Berlin plants with a total capacity of 864 MW, while on Thursday Uniper said coal deliveries to its Scholven D and E units which are by default supplied by rail were “tight.”

Rainfall
Some rainfall over the coming week should ease supply bottlenecks on river transport, at least in the short-term, traders said.

Germany should see some rain in the south, impacting Rhine flows, on Monday and Tuesday and then again, every day from 30 November to 5 December, EQ data showed.

“This is what we need urgently,” said Thomas Schmidt, spokesman for the 2 GW hard coal-fired power plant in the south western city of Mannheim, though output at the plant was currently unaffected.

German wind power output should average at 26.8 GW this week, compared with 14.5 GW last week, with output ranging from 4.5 GW on Tuesday to as high as 29.5 GW on Thursday, according to EQ data.

Power plants in the south of Germany are mostly affected, with ENBW warning of hampered coal supply since August.

The company has tried to supply coal to its power plant in Karlsruhe by lorry as rail transportation is also getting scarce, a source told Montel.

German rail operator DB Cargo told Montel earlier on Monday that it plans to run additional 10 trains for coal transportation to make up for the impact of the low water levels, up from only 2 extra trains in October.

“If it gets really cold in January, Germany’s power market could get pretty tight,” another trader said, estimating that over 3 GW of plant capacity could be affected should there be a cold snap early next year.

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