Fuel switching & the carbon price calculator

Where gas undercuts coal.

Interactive: fuel switching & the carbon priceHard

The short-run demand curve for carbon runs through power stations: at some EUA price, a gas plant undercuts a coal plant. Find that price.

Gas price €/MWh (thermal) Coal price €/MWh (thermal) Gas plant efficiency % Coal plant efficiency % Carbon price €/t

Gas: cost per MWh electric: —
Coal: cost per MWh electric: —
Dispatch order: —
Switching carbon price: —

Emission intensities fixed at 0.202 (gas) and 0.341 (coal) tCO₂ per thermal MWh. Marginal cost = fuel/efficiency + carbon×intensity/efficiency — the clean spark vs. clean dark spread, stripped to essentials. See carbon allowances.

The idea behind it

This calculator belongs to Commodities, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

Instruments it applies to

Carbon Allowances — A commodity invented by law: the right to emit one tonne of CO2, made scarce on purpose and tradable by design.

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Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

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Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
The models are teaching models. Formulas shown are standard textbook formulations. Institutions add calibration, live market data and credit, funding and capital adjustments — nothing here will reproduce a dealer’s quote or produce a valuation you can rely on.
These instruments carry risk. You can lose your entire investment. Leveraged instruments — futures, options, CFDs, perpetual futures and similar — can cost you considerably more than you originally deposited.
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