Reuters quoted an executive from Spanish utility Iberdrola said Spain is on course to import 10 million tonnes of thermal coal in 2011 due to better margins on burning coal than liquefied natural gas.

Speaking on the sidelines of the annual Coaltrans conference in Madrid, utility sources said they have renegotiated LNG take or pay contracts and resold cargoes mainly to Japan but also to Europe and elsewhere in Asia.

Mr Jorge Palomar a Madrid-based executive in Iberdrola coal and biomass trading department said "All of Spain's coal-fired power plants are currently burning."

He said that "Last year, it was very wet so there was more hydro available, this year it's been dry."

Data from national grid operator REE showed coal plants were providing 21.1% of Spain electricity by 1150 GMT which compares to an average of 8% for 2010 as a whole.

Utilities can sell hydropower at a discount to electricity generated from coal and gas, so a lack of it over the recent hot, dry summer has forced up wholesale Spanish power prices.

Spain coal imports have languished in recent years and many analysts expect them to be compromised this year by the introduction of market regulations favoring domestically produced coal.

(Sourced from Reuters)