Rising uncertainty over Europe’s energy security has prompted some countries to rely temporarily on coal for electricity generation, amid global supply disruptions and soaring gas prices caused by ongoing tensions between the United States and Israel on one side, and Iran on the other.
Coal prices climb for power plants
Since the escalation in the Gulf and the disruption of energy supplies through the Strait of Hormuz, thermal coal prices for power plants have risen about 20%, reaching roughly $135 per ton. Prices may continue rising as nations seek alternatives to natural gas.
With high gas prices, operating coal plants has become economically viable in several European countries. Despite coal’s environmental impact, economic pressures are driving its temporary use.
Comparing coal price spikes
According to the Financial Times, the current price increase is modest compared to the sharp surge in 2022 after the Russia-Ukraine war, when coal prices doubled to over $400 per ton. That crisis led Germany and other European states to reopen coal mines and power plants that had been closed.
Coal supply and global pressures
Global coal supplies are less strained than in 2022, with countries holding significant reserves. China, the world’s largest producer and consumer, is expanding or reopening mining operations. High coal prices may also prompt Indonesia, a major exporter, to reconsider limiting its exports.
The International Energy Agency expects global coal demand to stabilize or decline by 2030 as renewable and nuclear energy and natural gas availability increase. However, ongoing geopolitical tensions could affect this trajectory.
Renewables overtake coal in Europe
Data from the Ember Energy Research Center show that electricity from wind and solar surpassed fossil fuel generation for the first time in 2025, making up 30% of total EU electricity, compared to 29% from coal, gas, and oil.
Analysts note that coal may still play a backup role in Europe’s energy mix, especially if gas prices rise further or supply is disrupted.