(Minews) - Coal prices climbed to the highest level since January Monday amid speculation Russia’s intervention in Ukraine will spur demand for the solid fuel to replace gas in power plants in Europe.
According to Bloomberg the German contract, Europe’s electricity benchmark, rose as much as 1.4%, while European coal for delivery in 2015 climber over 1%.
Energy security has quickly become a strategic priority for the European governments, faced with the possibility of gas price rises.
Tensions between Russia and Ukraine over gas supply are nothing new, as state-owned Russian energy firm Gazprom has repeatedly threatened to cut off gas supplies to Ukraine because of unpaid debt.
On Monday Japan announced it will support Ukraine and other Eastern European nations in the construction of next-generation coal-fired power plants that can generate power with less fuel.
The Japan News reports that Tokyo has offered stand behind the nations’ efforts to use coal instead of natural gas, to help them reduce their dependency on Russian supplies.
Ukraine imports 60% of its natural gas needs from Moscow while Eastern European countries import 60% to 100% of their natural gas.
The Japanese government is expected to announce the initiative next week, at the meeting of energy ministers from Japan and other Group of Seven industrialized nations to be held in Rome.
As a result, experts expect an increase demand for coal in Europe in the coming months, especially as supply is becoming limited. Polish Kompania Weglowa, the largest coal producer in the 28-nation EU, today began a one-week halt at nine of its 15 mines, which was announced April 17 amid low sales.