The EU implements price cap for lignite power generation. Cost saving and risk coexist

The European Commission approved a tariff cap of €180 /MWh, which will affect lignite coal. The inclusion of this type of asset in the price cap could result in significant cost savings for markets with a high lignite presence in the power generation mix. Bloomberg New Energy Finance, for example, estimates that Germany could save about 4 billion euros ($3.9 billion) from December 2022 to March 2023. This represents an 8 per cent fall in the cost of electricity over the period, compared with the absence of a price cap.