Europe has been mothballing coal plants for years to cut emissions. The units that remain are now in the money as expensive gas, colder temperatures, and fading solar leave a bigger hole for conventional generators to fill.
That has tightened power markets and pulled more coal capacity online. As Michael Schrettle at Volue AS put it, "Coal-fired power plants are benefiting significantly from tight European power markets, with all available capacity running."
According to Energy Aspects, a German lignite margin gauge now sits at €64 per megawatt-hour for the current month, compared with nearly zero a year ago. The firm forecasts the lignite clean dark spread at €70.50 per megawatt-hour covering next month through March.
Hard-coal plants are back in the black as well; in October the average spread was €37.30 per megawatt-hour, versus minus €11.60 a year ago. Bloomberg data show gas prices have leapt far more than coal in a series indexed to 100 on Jan 2, 2026, widening coal's margin advantage.
Most of the EU's remaining coal fleet sits in Germany and Poland, which together produced more than 74% of the bloc's coal-fired electricity last year, per Ember. Germany has roughly a dozen large coal units actively participating in the commercial market, while some others have been removed from trading but kept on grid reserve.
Ownership is concentrated. In Germany, RWE AG and Lausitz Energie Kraftwerke AG control the bulk of large-scale coal capacity. In Poland, the biggest share sits with Polska Grupa Energetyczna S.A. With margins fatter, operators are running harder.
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In October, German coal generation averaged 14% above the same month last year, while gas-fired output fell about 20%, Entso-E data show. The Fraunhofer Institute reports a similar pattern in Poland. Patricio Alvarez at Bloomberg Intelligence noted that higher spreads can lift utilization and cash flow from assets once seen as marginal or nearing retirement, and added, "Since coal produces roughly twice the carbon dioxide per megawatt-hour of an efficient gas plant, that could increase power-sector emissions this autumn and winter."
There are friction points. Persistently low water on key rivers like the Rhine has raised transport costs for coal, and some plants have flagged potential output cuts if levels stay low. Many generators also pre-sell a sizable share of their output before winter, muting the immediate windfall. Still, Peter Crampton at Barclays said that unhedged output could capture larger profits because clean dark spreads are elevated today. And Sabrina Kernbichler at Energy Aspects expects the strong spreads to "stay high through March."
Germany is a focal point because it shut its final nuclear units and aims to retire coal while leaning more on renewables. Backup gas plants meant to support that shift are not yet built, keeping the existing coal fleet pivotal when wind and solar dip. The bottom line: operators with remaining coal capacity are capturing stronger cash flow now, but the policy path and build-out of new backup resources will shape how durable those profits are.
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