Inter-Fuel Competition in Electric Power Generation : Coal or Natural Gas

One of the most disputable aspects of Russia's energy markets reform is the feasibility of achieving grid parity between different energy sources, of their so called inter-fuel competition level indices. Thus, in particular, one of the possible future components of the Russian market for natural gas can be the inter-fuel competition level reached by natural gas and coal in electric power generation. The results of a simplified analysis of current electric energy gen era on costs demonstrate that at present, natural gas has a huge competitive advantage over coal in electric power generation. At the same time, medium-term moderate growth of prices of natural gas in the domestic market will not result in a switchover, by electric power producers, from natural gas to coal