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Soaring Coal Prices Increasing Global Electricity Rates making Green Energy more Lucrative

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Coal Prices have started to increase in the international market alongwith other commodities like wheat,sugar,corn,gold,copper etc.But unlike other commodities,Coal has a disproportionate effect on Energy Prices.Note Coal is the principal supplier of top energy consumers like China,USA,India,Germany etc.The cheap price and abundance of coal has made it the fossil fuel of choice for generating electricity.The Technology for mining,processing and using coal to generate energy is well developed and cheap.This is the main reason for Coal’s growing demand despite its reputation as the Dirtiest Form of Energy.Coal Mining also regularly leads to hundreds of deaths even in developed countries like USA and New Zealand.However Growing Carbon Emissions due to Coal and its Supply Shortages has resulted in looking for alternative forms.Clean Coal Technology,Coal to Liquid and Carbon Capture and Sequestration(CCS) are looked upon as means to try and improve the carbon footprint of Coal.However the CCS Technology remains immature and expensive as of now .

China coal-price cap not much help for power firms

China’s decision to freeze contract coal prices is unlikely to benefit power producers much as spot prices might jump on the move and also because Beijing might also act to cap electricity tariffs in its battle to curb inflationary pressures, say analysts.

Shares of Chinese independent power producers, or IPPs, declined Friday, reversing some of the gains they notched a day before, when state-run Xinhua news service cited an official at the National Development and Reform Commission as saying that contract coal prices must be frozen in 2011 at this year’s price levels.

Coal Prices have increased dramatically in China which is being forced to import millions of tons of coal despite having huge reserves.This is putting pressure on electricity rates which are one of the cheapest in the world.High Coal Prices are also making Thermal Plants in the UK to switch to Wood Pellets as Fuel which are considered more environment friendly.Note Coal generated electricity is cheap because the external effects on environment,health,pollution are not taken into account.Putting a Carbon Price on Coal would make it more expensive than some renewable forms of energy like Wind Energy.However in the world we live in external costs are not part of the economic calculus.However Coal Prices are going to increase as India another big consumer starts to import huge quantities as well.Increasing Electricity Rates is something inevitable and should give a big boost to Green Energy forms.Not a bad idea to install solar panels at a fixed rate for 20-25 years as electricity rates are going to be much higher than people expect.

German 2011 Power Gains to 12-Week High as Coal, Gas Advance

German electricity for delivery next year climbed to a 12-week high as coal and natural gas costs rose, potentially making electricity generation more expensive.

Baseload power for 2011 gained as much as 80 cents, or 1.6 percent, to 50.70 euros ($67.15) a megawatt-hour, its highest price since Sept. 8, according to broker data compiled by Bloomberg. The contract traded at 50.65 euros at 11:20 a.m. Berlin time. Baseload is delivered around the clock.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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