Power generators are running the risk with natural gas and billions of dollars of impractical and unsaleable assets. Investors became more critical of gas and intensified their pressure to avoid gas as well as thermal coal. As a result, financial institutions like JPMorgan Chase & Co. and Citigroup Inc. reinforced their financing restrictions. Plant manufacturer are struggling to place gas-fired facilities on the market and utilities such as the Spain company Iberdrola SA experience difficulties to find buyers offering an appropriate price for their disposable assets.
Europe pursues the goal to reach net-zero emissions by 2050. Additionally, the cost of renewables has declined steadily during the past years. Therefore, gas-fired facilities became less competitive. On the contrary, a range of terminals and pipelines are built in Europe. These infrastructure projects could no longer be needed in the future, making them an incalculable asset risk. Enel SpA, Europe’s biggest utility is planning to restrict fossil fuel generation, whereby capacity reductions in gas are coming down the track.
Renewables are an economic alternative accelerating the gas phase-out. Contrary to coal, gas production doesn’t provide the same number of jobs. In conclusion, in countries such as Britain building large-scale gas plants without technologies for carbon capturing is hardly probable.