<article><p class="lead">German daily and weekly hard coal-fired generation has hit three and two-year highs, respectively, and looks set to climb even further in the near-term as a spell of weak wind generation coincides with below-average temperatures.</p><p>Daily hard coal-fired generation was 14.5GW on 29 November, its highest since 9 December 2020, according to Fraunhofer Ise data.</p><p>Weekly generation was 10.1GW on 20-26 November, its highest since mid-December 2021. Based on available capacity of 12.6GW for the period, this implies plants were working at a load factor of around 80pc. Generation was just 5GW on 1-15 November and 8.7GW in November 2021.</p><p>Hourly German hard coal-fired generation has climbed further today, hitting 17.8GW at certain hours, according to figures from Agora Energiewende. </p><p>This uptick in coal burn mirrors the trend across much of Europe, where hard coal-fired output has stepped up as the first spell of below-average temperatures of the winter heating season have set in. French coal-fired generation, while much lower than in Germany, reached near maximum capacity of 1.8GW at certain hours on 28 November as the <a href="https://direct.argusmedia.com/newsandanalysis/article/2395678">Cordemais 4 unit returned to service</a>.</p><p>This has supported Europe-delivered coal prices, with <i>Argus</i>' NAR 6,000 kcal/kg cif Amsterdam-Rotterdam-Antwerp (ARA) assessment climbing to a six-week high $256/t on 29 November, up from a nine-month low of $177.69/t on 9 November.</p><p>Recent coal supply <a href="https://direct.argusmedia.com/newsandanalysis/article/2393978">disruption in Colombia</a> and <a href="https://direct.argusmedia.com/newsandanalysis/article/2394725">South Africa</a> also boosted prices. But spot demand remains relatively weak, with utility buyers reportedly well covered and owing to firm port stocks at ARA, which <a href="https://direct.argusmedia.com/newsandanalysis/article/2395607">hit a seven-week high of 6mn t this week</a>.</p><p>Clean dark spreads (CDS) have climbed sharply in recent days, with the day-ahead CDS for a 40pc efficient German coal plant hitting €238.15/MWh on 29 November, a €113.03/MWh premium to the equivalent clean spark spread for a 55pc efficient gas plant.</p><h3>Generation outlook</h3><p>There is scope for German hard coal-fired generation to remain elevated and even rise in the near-term, although given projected available capacity is only around 16GW in the first 10 days of December, according to EEX, the upside could be limited. </p><p>Coal-fired generation of 13GW equates to 93,000t of NAR 5,800 kcal/kg coal burnt each day in 40pc efficient plants, or 2.9mn t over the course of a month.</p><p>The return of several coal plants in Germany under the Replacement Power Plant Availability Act should support a further rise in generation. Utilities have also been <a href="https://direct.argusmedia.com/newsandanalysis/article/2367850">expanding storage capacities at both power plants and ports since the second quarter</a> to facilitate the return of units and expectations of firmer coal-fired generation.</p><p>German wind load factors are expected to remain low until 2 December at 6-14pc, before rising to 28pc by 6 December, according to Spot Renewables. Temperatures in Berlin are expected to fall to between 1-5°C below seasonal norms on 1-14 December, according to Speedwell Weather.</p><p>Other fossil fuel-based generation is also running at a high level in Germany. Lignite generation, which is based on domestic production rather than imported coal, is at its highest since January 2021, averaging 14.7GW on 20-26 November. Gas-fired generation surged to 23.1GW yesterday, its highest since 2017.</p><p>Underground gas storage levels in the EU remain high, but were drawn down to 94pc on 28 November from a high of 96pc on 13 November, according to provisional AGSI figures.</p><h3>Europe annual coal imports to hit 4-year high</h3><p>German hard coal-fired generation is on track to hit its highest annual level since 2018. Generation on 1 January-30 November was 55.8TWh, up by 24.7pc on the year and the highest for the period since 2018 (<i>see chart</i>).</p><p>Seaborne thermal coal imports into Belgium, France, Germany, Ireland, Italy, the Netherlands, Spain and the UK hit 76.5mn t in January-November, up by 33.5pc on the year and the highest for the period since 2018's 83.4mn t, shipping data show, although these figures could include some coking coal volumes.</p><p class="bylines">By Alex Thackrah</p><p><div class="picture"><div><span class="pic_title">Jan-Nov European imports vs German coal gen</span> <span class="units">mn t, TWh</span></div><img src="https://argus-public-assets-us.s3.amazonaws.com/2022/11/30/europeimportsvgen30112022041526.jpg"></div></p></article>
