Too pricey for naughty children’s stockings: Cost of coal soars in 2022
Jeremy Beaman
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Coal prices skyrocketed in 2022 as countries increasingly turned back to the age-old fuel in lieu of costlier and cleaner natural gas.
Utilities in Europe and the United States have been retiring coal-fired power generation capacity for years, often in favor of gas, but the fallout from the war in Ukraine upended global markets and reduced gas supplies.
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That has led many countries in Europe to order gas conservation measures and burn more coal or put coal-fired plants on standby to ensure the sufficient availability of energy to get through the winter. Increased economic activity coming out of the COVID-19 pandemic has also contributed to the rise in coal, according to analysts.
With this increase in demand, forecasters predict record levels of coal combustion in 2022.
In the U.S., spot prices for Central and Northern Appalachian thermal coal have more than doubled since last December. A short ton of Central Appalachian coal went for $92.50 in the week ending Dec. 17, 2021. This year, it was up to $199.40 per short ton, a 115% increase.
Australian coal peaked above $430 per short ton in September. Prices began the year well under $200 per short ton.
The International Energy Agency, an intergovernmental organization created after the 1973 oil crisis, expects coal use to fall back down in the years to come due to increasing installations of renewable energy.
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At the same time, European leaders, who oversee some of the greenest national energy policies in the world and have set some even more aggressive renewable energy targets since the war began, have insisted the reversion to coal is a short-term solution to the acute energy crisis.
Coal interests, meanwhile, have seen coal’s bounce-back as a vindication of their years of lobbying against rules and regulations designed to crack down on the fuel.