FRANKFURT/MILAN (Reuters) -Europe’s biggest Russian gas buyers raced to find alternative fuel supplies on Monday and could burn more coal to cope with reduced gas flows from Russia that threatens an energy crisis in winter if stores are not refilled.
Germany, Italy, Austria and the Netherlands have all signalled that coal-fired power plants could help see the continent through a crisis that has sent gas prices surging and added to the challenge facing policymakers battling inflation.
Germany, which has also experienced lower Russian flows, announced on Sunday its latest plan to boost gas storage levels and said it could restart coal-fired power plants that it had aimed to phase out.
The Dutch front-month gas contract, the European benchmark, was trading around 124 euros ($130) per megawatt hour (MWh) on Monday, down from this year’s peak of 335 euros but still up more than 300% on its level a year ago, before prices started rocketing.
The chief executive of Germany’s largest power producer RWE, Markus Krebber, said power prices could take three to five years to fall back to lower levels.
Russian gas flows to Germany through the Nord Stream 1 pipeline, the main route supplying Europe’s biggest economy, were still running at about 40% of capacity on Monday, even though they had edged up from the start of last week.
Eni and German utility Uniper were among European companies that said they were receiving less than contracted Russian gas volumes, although Europe’s gas inventories are still filling - albeit more slowly.