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(Bloomberg) — Uniper SE is preparing to switch on more natural-gas plants as higher costs for carbon allowances shifted the economics of the power generation business away from coal.

Gas plants also are benefiting both from a slump in the price of the fuel. Uniper, one of Europe’s largest utilities, will bring back on line as much as 3.5 gigawatts of gas plants that were mothballed when market conditions were less favorable. That’s almost a third of its gas-plant capacity.

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“Carbon markets have shown they work,” Chief Executive Officer Andreas Schierenbeck said in an interview in Bloomberg’s office in Frankfurt. “This summer, carbon prices were very high and gas is very cheap, very competitive. The logic is clear: you need as much a double carbon certificates for coal than for gas.”

The remarks illustrate the latest shift in the ever-changing economics of generating electricity. While Chancellor Angela Merkel is moving to phase out the most polluting fossil fuels, emissions in Germany have actually risen in recent years as the government took nuclear plants off the grid, boosting the need for coal.