UPDATE 1-Iberia coal use to fall in 2010 - EDP

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LONDON, Oct 26 (Reuters) - Coal consumption in Spain and Portugal will fall in 2010, officials from Energias de Portugal (EDP.LS) said on Monday.

EDP, which buys coal for its power plants in Portugal and Spain, said it expectd to consume 3.6 million tonnes in 2010, down from 5.3 million in 2009, due to plant closures at Sines to fit anti-pollution equipment and also because the company expects cheaper gas to displace coal in Iberia.

"Gas prices have fallen during the last part of this year to be cheaper than coal but we think this will also be the case going forward," an EDP official said.

Speaking on the sidelines of the Coaltrans industry conference in London, the EDP official said that anticipation of lower coal demand next year and price uncertainty meant that EDP would be tendering soon for less than its usual coal quantity, and at index-linked prices.

"We will issue a new coal tender some time between November and Christmas, for 1-2 years supply and on a delivered basis, but linked to the API2 index," the official said.

EDP will buy around 1 million tonnes of coal per year and buy the balance of what it needs on the spot market, the official said.

U.S. and Colombian coal are likely to be the cheapest coal origins offered, the official said.

(Reporting by Jackie Cowhig, Editing by Nigel Hunt)