Danish coal burn set to decline this summer

Danish coal-fired generation may fall by about 35pc on the year to 300MW from April-September, under a scenario in which overall electricity generation is on average 5.5pc lower on the year, according to Argus calculations.

This 300MW generation would be 29.9pc lower than the 2018-22 average and equate to 470,000t of NAR 5,800 kcal/kg coal burn across the six-month period assuming plant efficiency of 40pc, about 250,000t lower than in the same period last year.

This scenario assumes that overall May-September power generation falls by 6.5pc year on year, in line with the January-April rate. And this combined onshore and offshore wind generation over May-September is in line with the 2020-22 average.

The drop-off in coal generation is likely to be driven by a continued coal-gas fuel switch incentive.

Hard coal-fired generation is assumed to hold a 60pc share of a combined coal-gas mix of 480MW over May-September, in line with the February-April share. Coal held a 70pc share of the coal-gas generation mix of 630MW last summer, according to data from European system operators' association Entso-E.

The outlook for coal is further clouded by utility Orsted's 380MW Studstrup power plant restarting biomass burning from 1 April. The plant switched to burning coal in late September 2022 following a fire at its silo, according to a Remit notice published on the Nordpool exchange site.

Biomass output from May-September is assumed to be flat on the year, given firm biomass stocks and a less intense maintenance schedule expected over the summer.

Stocks, imports firm

Thermal coal stocks at Danish power stations are currently above last year's level at 560,000t, up by 21.7pc on the year, according to the Danish Energy Agency.

Concurrently, imports have been firm so far this year, with Denmark having taken 380,000t in March alone, the highest monthly import volume since January 2017.

This firm-supply scenario, coupled with the modest demand outlook, could weigh on additional import appetite in the months ahead.

South Africa and Canada have dominated Denmark's import mix so far in 2023, supplying a respective 390,000t and 320,000t.

Denmark currently has 1.3GW of coal-fired capacity, of which Orsted operates the 400MW Esbjergvaerket facility and 265MW Stignaesvaerket plant. Aalborg Forsyning operates the 220MW Nordjyllandsvaerket plant and Fjernvarme operates the 409MW Fynsvaerket facility.

The Nordjyllandsvaerket plant has been suffering longstanding generation problems and is running at a reduced capacity of 270MW until 30 November 2023 because of "vibration problems on the generator", according to a Remit notice published on the Nordpool site.

And Orsted confirmed an extension of its coal phase-out to 2025 from the second quarter of 2023, according to the company's annual report published at the beginning of February.

By Evan Millard

Danish imports by origin mn t

Danish imports mn t

Electricity plant coal stocks mn t