Coal prices have halved since 2011 because of China's
"anything but coal" power plans and competition from cleaner
sources of energy, the Financial Times
reports. Prices will probably rebound, but analysts tell the
paper the recovery may be slow.
Back home, the UK has a
coal problem. Use is up a fifth in four
years due in part to low prices and the government has been looking
extending the life of coal plants. German
use is up 13 per cent too.
Some are saying the shift to coal, the most
polluting of all fossil fuels, has been at the expense of cleaner
gas and nuclear. If it persists it would be a
threat to EU
plans to cut emissions by 40 per cent in
So is cheap coal bad news for the
Supply and demand
First, let's take a look at today's coal price
and why it has become so cheap.
Coal prices haven't been this low since 2009, as the
chart below shows, and have almost halved since a peak in 2011.
Over the same period crude oil has remained above the historically
unprecedented $100 per barrel level (purple line). So low coal
prices aren't being caused by generally weak demand for
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