COALspot.com keeps you connected across the coal world
  • SUPRAMAX: THE COVID-19 PANDEMIC HAS HEAVILY LEFT ITS MARK HERE DURING THE PAST WEEK, WITH THE BSI EASING BACK TO 495 BASIS POINTS - ALLIED
  • APRIL 2020 INDONESIAN COAL PRICE REFERENCE FOR EXPORTS AND DOMESTIC BUYERS INCLUDING POWER PRODUCERS FIXED AT US$ 65.77 A TON

Submit Your Articles
We welcome article submissions from experts in the areas of coal, mining, shipping, etc.

To Submit your article please click here.

International Energy Events


WTI Crude Oil

BRENT Crude Oil

Search News
Latest CoalNews Headlines
Saturday, 11 January 20
NEW PRICING COULD SPELL TROUBLE FOR CHINA'S COAL SECTOR - CHINA DIALOGUE
Benchmark coal tariffs have been the foundation of China’s electricity pricing since 2004 but this mechanism was replaced on January 1 with a more flexible system. Industry insiders say the change may increase pressure on coal power generators, which are already struggling to be profitable.
 
The benchmark bows out
 
The new mechanism includes a “base price” that’s set at the same level as the benchmark tariff it replaces, and a “float” so that it can deviate up to 10% higher or 15% lower. Prices will be negotiated by power generators, supply companies and electricity users.
 
Previously, the state determined how much the power grid would pay for coal power. China’s central economic planner, the National Development and Reform Commission (NDRC), set on-grid tariffs according to the costs of each type of generation and any pollution-control measures they employed, such as desulphurisation. Firms in the same region, operating to the same environmental standards, received the same price for their power.
 
NDRC could make annual adjustments to reflect changes in coal prices but rarely did so. Indeed, Xinhua reports that since 2013 the benchmark tariff was adjusted downward four times and increased just once, despite coal prices having rallied since 2015. As a consequence, many coal generators are losing money.
 
Cao Changqing, head of the NDRC’s Prices Department, has said government needs to take into account the ability of businesses and households to absorb higher prices when setting tariffs.
 
Looked at another way, the NDRC has used low tariffs to subsidise industry and residential electricity users mostly at the expense of large, state-owned coal-fired power generators.
 
The new mechanism to set tariffs is a step towards a negotiated market that limits this one-sided subsidy. Coal power producers will be able to negotiate with their buyers to raise power prices. On the developed east coast of China, where big users compete for access to reliable generation, coal generators are more likely to succeed in raising prices beyond the base price.
 
Coal power under pressure
 
But most power market experts don’t see much opportunity for coal generators to raise prices. Except for small pockets of high demand on the east coast, China has a power surplus, meaning generators could be pressured to lower tariffs, reducing revenues even further.
 
And clean energy competitors – hydro, solar, wind and nuclear – enjoy policies that guarantee the purchase of their output, which reduces the market for coal power.
 
Furthermore, the NDRC has ruled out the possibility of higher coal prices this year to “ensure the average cost of power for industry and business can only fall”. So, in the short term at least, the only direction for electricity prices is down.
 
Zhang Shuwei, director and chief energy economist at the Draworld Environment Research Centre, believes the new system will boost competition in the coal power sector. Competitive firms located closer to consumers will profit even if prices fall. “But less efficient generators, zombie firms which lose no matter how much they generate, will naturally be forced out,” he said.
 
Supporting power-intensive businesses
 
The central government has long sought to boost the economy by keeping power prices for industry and business low. Zheng Xiaonan, a deputy researcher at the NDRC’s Energy Research Institute, said that the government is hoping the more flexible approach will take over.
 
This may keep prices low for most electricity users because there is surplus power, whilst allowing generators in provinces with high power demand to ease losses.
 
Last year, the NDRC and the National Energy Administration announced trials in which companies in the coal, steel, metals and construction materials sector would obtain more of their electricity from the market instead of through long-term contracts set by the government. Some local governments have also encouraged power-intensive industries to buy directly from generators via base price plus float mechanisms.
 
Electricity can account for 30% of costs in power-intensive sectors such as concrete manufacturing, so pricing changes have a major impact on company performance. One view is that the new mechanism will allow power generators and power-hungry firms to form mutually beneficial relationships, with the generators gaining reliable customer and the company keeping electricity costs under control.
 
Yuan Jiahai, a professor at North China Electric Power University, pointed out that encouraging power-intensive industry via lower power prices will increase pollution rather than aid high-quality economic growth. Zheng Xinye, deputy head of Renmin University’s School of Economics, says it should not be done even when the economy is slowing.
 
What about renewables?
 
For years the benchmark coal power tariff has been used as a point of reference for subsidies for the renewables sector. The government sets the price the grid will pay for solar and other renewables in different regions, and the Renewable Energy Development Fund pays a subsidy to offset the difference between that price and the benchmark tariff.
 
Tao Ye, director of the Renewable Energy Development Centre at the NDRC’s Energy Research Institute, explained that renewables subsidies will remain steady because they will be anchored to the base price, which will not fluctuate much, and won’t float.
 
“The method for setting the base price will be the same as for the benchmark tariff, and in the near- to mid-term there is no chance of frequent changes or even falls,” he said.
 
Peng Peng, secretary of the China New Energy and Electricity Investment Alliance, thinks that subsidies alone have a limited impact on renewables. She points to the power surpluses in many provinces that put downward pressure on prices, and whether renewables get priority over other sources when dispatching power to the grid.
 
But as these reforms are clearly intended to reduce prices, some experts think the renewables sector will also suffer. Li Junfeng, chair of the China Energy Research Society’s renewables committee, thinks doing away with the benchmark tariff will reduce coal power prices and make it harder for renewables to achieve grid parity.
 
Commenting on these concerns, Tao Ye said that renewable energy firms that have achieved grid parity already benefit from policies, such as the creation of power purchase agreements for at least 20 years, and so do not need to participate in the market. He suggests current preferential policies be maintained during the first years of the 14th Five Year Plan period (2021-25) to ensure a smooth transition.
Source: China Dialogue


If you believe an article violates your rights or the rights of others, please contact us.

Recent News

Monday, 06 April 20
INDIA'S 21-DAY LOCKDOWN - IMPACT ON COMMODITIES? - WOOD MACKENZIE
India is under a three-week lockdown from 25 March, to contain the spread of the coronavirus outbreak. Wood Mackenzie analysts discuss what this me ...


Friday, 03 April 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.   The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...


Wednesday, 01 April 20
TRADERS SCRAMBLE TO SELL CHEAP CRUDE CARGOES AS GLUT GROWS - REUTERS
Oil traders across the globe are offering cargoes far in advance as rapidly vanishing demand drives key physical crude prices to multi-decade lows, ...


Wednesday, 01 April 20
MARKET INSIGHT - INTERMODAL
There is an old, allegedly Chinese, saying suggesting that living in “interesting” times usually refers to times of trouble. The latest ...


Tuesday, 31 March 20
FREIGHT MARKET: DRY BULKERS - SPOT MARKET 23-29 MARCH 2020
Capesize The rebound in freight rates resumed this past week, with rates man-aging to post further gains by week’s end. The BCI is in negat ...


   1 2 3 4 5   
Showing 6 to 10 news of total 5846
News by Category
Popular News
 
Total Members : 26,843
Member
Panelist
User ID
Password
Remember Me
By logging on you accept our TERMS OF USE.
Free
Register
Forgot Password
 
Our Members Are From ...

  • TANGEDCO India
  • Petrosea - Indonesia
  • Credit Suisse - India
  • Reliance Power - India
  • Thomson Reuters GRC
  • Bangkok Bank PCL
  • Freeport Indonesia
  • Mjunction Services Limited - India
  • Sree Jayajothi Cements Limited - India
  • JPMorgan - India
  • Electricity Generating Authority of Thailand
  • EIA - United States
  • RBS Sempra - UK
  • Lafarge - France
  • Manunggal Multi Energi - Indonesia
  • IBC Asia (S) Pte Ltd
  • Shenhua Group - China
  • Xstrata Coal
  • New Zealand Coal & Carbon
  • Vizag Seaport Private Limited - India
  • Maheswari Brothers Coal Limited - India
  • Indian Oil Corporation Limited
  • Maersk Broker
  • Kobe Steel Ltd - Japan
  • Riau Bara Harum - Indonesia
  • PTC India Limited - India
  • Port Waratah Coal Services - Australia
  • globalCOAL - UK
  • Panama Canal Authority
  • Cigading International Bulk Terminal - Indonesia
  • Makarim & Taira - Indonesia
  • SMG Consultants - Indonesia
  • London Commodity Brokers - England
  • Bank of Tokyo Mitsubishi UFJ Ltd
  • Mercator Lines Limited - India
  • Bharathi Cement Corporation - India
  • Ministry of Transport, Egypt
  • KPCL - India
  • Alfred C Toepfer International GmbH - Germany
  • Total Coal South Africa
  • Bahari Cakrawala Sebuku - Indonesia
  • Samsung - South Korea
  • Marubeni Corporation - India
  • White Energy Company Limited
  • Sakthi Sugars Limited - India
  • Cosco
  • UBS Singapore
  • Goldman Sachs - Singapore
  • McConnell Dowell - Australia
  • OPG Power Generation Pvt Ltd - India
  • PetroVietnam
  • IHS Mccloskey Coal Group - USA
  • Bank of China, Malaysia
  • GAC Shipping (India) Pvt Ltd
  • Clarksons - UK
  • Videocon Industries ltd - India
  • Thiess Contractors Indonesia
  • Savvy Resources Ltd - HongKong
  • Barclays Capital - USA
  • Malco - India
  • Vedanta Resources Plc - India
  • Idemitsu - Japan
  • Coal Orbis AG
  • TNB Fuel Sdn Bhd - Malaysia
  • CNBM International Corporation - China
  • Directorate Of Revenue Intelligence - India
  • Thai Mozambique Logistica
  • ING Bank NV - Singapore
  • Runge Indonesia
  • Star Paper Mills Limited - India
  • Asmin Koalindo Tuhup - Indonesia
  • Shree Cement - India
  • Moodys - Singapore
  • Ince & co LLP
  • Gupta Coal India Ltd
  • Coaltrans Conferences
  • Australian Commodity Traders Exchange
  • Arutmin Indonesia
  • ICICI Bank Limited - India
  • KPMG - USA
  • Deloitte Consulting - India
  • Orica Australia Pty. Ltd.
  • Ind-Barath Power Infra Limited - India
  • Orica Mining Services - Indonesia
  • Trasteel International SA, Italy
  • Gujarat Sidhee Cement - India
  • Kobexindo Tractors - Indoneisa
  • Aditya Birla Group - India
  • Bulk Trading Sa - Switzerland
  • Anglo American - United Kingdom
  • Commonwealth Bank - Australia
  • Malabar Cements Ltd - India
  • Lanco Infratech Ltd - India
  • Mechel - Russia
  • South Luzon Thermal Energy Corporation
  • SUEK AG - Indonesia
  • Pinang Coal Indonesia
  • UOB Asia (HK) Ltd
  • VISA Power Limited - India
  • Ernst & Young Pvt. Ltd.
  • World Coal - UK
  • Merrill Lynch Bank
  • SASOL - South Africa
  • Australian Coal Association
  • TNPL - India
  • Chamber of Mines of South Africa
  • Global Coal Blending Company Limited - Australia
  • Intertek Mineral Services - Indonesia
  • Heidelberg Cement - Germany
  • World Bank
  • Romanian Commodities Exchange
  • Mercuria Energy - Indonesia
  • Core Mineral Indonesia
  • KEPCO - South Korea
  • Globalindo Alam Lestari - Indonesia
  • Central Electricity Authority - India
  • Coeclerici Indonesia
  • Miang Besar Coal Terminal - Indonesia
  • EMO - The Netherlands
  • Rashtriya Ispat Nigam Limited - India
  • Larsen & Toubro Limited - India
  • Holcim Trading Pte Ltd - Singapore
  • Minerals Council of Australia
  • Jorong Barutama Greston.PT - Indonesia
  • PLN Batubara - Indonesia
  • Attock Cement Pakistan Limited
  • Rudhra Energy - India
  • Mitsui
  • Ministry of Finance - Indonesia
  • Madhucon Powers Ltd - India
  • Arch Coal - USA
  • GVK Power & Infra Limited - India
  • Dr Ramakrishna Prasad Power Pvt Ltd - India
  • Grasim Industreis Ltd - India
  • Indian School of Mines
  • CCIC - Indonesia
  • Kalimantan Lumbung Energi - Indonesia
  • SGS (Thailand) Limited
  • Argus Media - Singapore
  • BNP Paribas - Singapore
  • Price Waterhouse Coopers - Russia
  • Borneo Indobara - Indonesia
  • Coal and Oil Company - UAE
  • Inco-Indonesia
  • Mitsubishi Corporation
  • Sindya Power Generating Company Private Ltd
  • Thailand Anthracite
  • Qatrana Cement - Jordan
  • Sical Logistics Limited - India
  • Altura Mining Limited, Indonesia
  • Deutsche Bank - India
  • Merrill Lynch Commodities Europe
  • Economic Council, Georgia
  • Kartika Selabumi Mining - Indonesia
  • Permata Bank - Indonesia
  • Standard Chartered Bank - UAE
  • Bukit Asam (Persero) Tbk - Indonesia
  • Ceylon Electricity Board - Sri Lanka
  • Offshore Bulk Terminal Pte Ltd, Singapore
  • Britmindo - Indonesia
  • Adani Power Ltd - India
  • Oldendorff Carriers - Singapore
  • Independent Power Producers Association of India
  • J M Baxi & Co - India
  • Essar Steel Hazira Ltd - India
  • ETA - Dubai
  • Chettinad Cement Corporation Ltd - India
  • Jaiprakash Power Ventures ltd
  • Coalindo Energy - Indonesia
  • Cement Manufacturers Association - India
  • Africa Commodities Group - South Africa
  • Timah Investasi Mineral - Indoneisa
  • The University of Queensland
  • Glencore India Pvt. Ltd
  • Bukit Baiduri Energy - Indonesia
  • Cemex - Philippines
  • GMR Energy Limited - India
  • Tanito Harum - Indonesia
  • Asia Cement - Taiwan
  • Platts
  • IMC Shipping - Singapore
  • Sinarmas Energy and Mining - Indonesia
  • Neyveli Lignite Corporation Ltd, - India
  • Indogreen Group - Indonesia
  • Wood Mackenzie - Singapore
  • McKinsey & Co - India
  • Truba Alam Manunggal Engineering.Tbk - Indonesia
  • Uttam Galva Steels Limited - India
  • GHCL Limited - India
  • Singapore Mercantile Exchange
  • Georgia Ports Authority, United States
  • International Coal Ventures Pvt Ltd - India
  • Latin American Coal - Colombia
  • DBS Bank - Singapore
  • Kapuas Tunggal Persada - Indonesia
  • Indika Energy - Indonesia
  • Toyota Tsusho Corporation, Japan
  • Bhatia International Limited - India
  • HSBC - Hong Kong
  • PowerSource Philippines DevCo
  • Pendopo Energi Batubara - Indonesia
  • Parry Sugars Refinery, India
  • WorleyParsons
  • Formosa Plastics Group - Taiwan
  • Eastern Coal Council - USA
  • Gujarat Electricity Regulatory Commission - India
  • Bank of America
  • Indonesian Coal Mining Association
  • Kideco Jaya Agung - Indonesia
  • Indo Tambangraya Megah - Indonesia
  • Dong Bac Coal Mineral Investment Coporation - Vietnam
  • The India Cements Ltd
  • Maruti Cements - India
  • European Bulk Services B.V. - Netherlands
  • Ambuja Cements Ltd - India
  • Sucofindo - Indonesia
  • Straits Asia Resources Limited - Singapore
  • Billiton Holdings Pty Ltd - Australia
  • Bangladesh Power Developement Board
  • Mitra SK Pvt Ltd - India
  • ASAPP Information Group - India
  • Edison Trading Spa - Italy
  • Platou - Singapore
  • Mintek Dendrill Indonesia
  • Gresik Semen - Indonesia
  • Kumho Petrochemical, South Korea
  • U S Energy Resources
  • JPower - Japan
  • Infraline Energy - India
  • Gujarat Mineral Development Corp Ltd - India
  • Karaikal Port Pvt Ltd - India
  • Metalloyd Limited - United Kingdom
  • Eastern Energy - Thailand
  • Filglen & Citicon Mining (HK) Ltd - Hong Kong
  • Medco Energi Mining Internasional
  • Fearnleys - India
  • Karbindo Abesyapradhi - Indoneisa
  • Asian Development Bank
  • ANZ Bank - Australia
  • Maybank - Singapore
  • Samtan Co., Ltd - South Korea
  • Enel Italy
  • Thriveni
  • Sojitz Corporation - Japan
  • Inspectorate - India
  • Bhoruka Overseas - Indonesia
  • Carbofer General Trading SA - India
  • GNFC Limited - India
  • KOWEPO - South Korea
  • The State Trading Corporation of India Ltd
  • Xindia Steels Limited - India
  • Kaltim Prima Coal - Indonesia
  • Coal India Limited
  • Noble Europe Ltd - UK
  • Surastha Cement
  • Cardiff University - UK
  • Tata Chemicals Ltd - India
  • OCBC - Singapore
  • Leighton Contractors Pty Ltd - Australia
  • GB Group - China
  • Jindal Steel & Power Ltd - India
  • MS Steel International - UAE
  • Tamil Nadu electricity Board
  • Renaissance Capital - South Africa
  • Wilmar Investment Holdings
  • Interocean Group of Companies - India
  • Antam Resourcindo - Indonesia
  • SRK Consulting
  • Aboitiz Power Corporation - Philippines
  • Posco Energy - South Korea
  • Siam City Cement - Thailand
  • NTPC Limited - India
  • MEC Coal - Indonesia
  • Russian Coal LLC
  • Coastal Gujarat Power Limited - India
  • India Bulls Power Limited - India
  • CESC Limited - India
  • NALCO India
  • Banpu Public Company Limited - Thailand
  • APGENCO India
  • Agrawal Coal Company - India
  • Peabody Energy - USA
  • Vitol - Bahrain
  • Indonesia Power. PT
  • Bukit Makmur.PT - Indonesia
  • Planning Commission, India
  • Ministry of Mines - Canada
  • PetroVietnam Power Coal Import and Supply Company
  • Japan Coal Energy Center
  • The Treasury - Australian Government
  • Thermax Limited - India
  • Jatenergy - Australia
  • CIMB Investment Bank - Malaysia
  • Petrochimia International Co. Ltd.- Taiwan
  • Barasentosa Lestari - Indonesia
  • Energy Link Ltd, New Zealand
  • Central Java Power - Indonesia
  • Indorama - Singapore
  • Simpson Spence & Young - Indonesia
  • TeaM Sual Corporation - Philippines
  • IEA Clean Coal Centre - UK
  • IOL Indonesia
  • Power Finance Corporation Ltd., India
  • ACC Limited - India
  • Kohat Cement Company Ltd. - Pakistan
  • Tata Power - India
  • Geoservices-GeoAssay Lab
  • Rio Tinto Coal - Australia
  • Binh Thuan Hamico - Vietnam
  • Siam City Cement PLC, Thailand
  • Bayan Resources Tbk. - Indonesia
  • Dalmia Cement Bharat India
  • PLN - Indonesia
  • Directorate General of MIneral and Coal - Indonesia
  • Vijayanagar Sugar Pvt Ltd - India
  • Bhushan Steel Limited - India
  • bp singapore
  • Meenaskhi Energy Private Limited - India
  • CoalTek, United States
  • Vale Mozambique
  • Krishnapatnam Port Company Ltd. - India
  • Adaro Indonesia
  • Salva Resources Pvt Ltd - India
  • Cargill India Pvt Ltd
  • Parliament of New Zealand
  • PNOC Exploration Corporation - Philippines
  • Humpuss - Indonesia
  • Berau Coal - Indonesia
  • BRS Brokers - Singapore
  • LBH Netherlands Bv - Netherlands
  • Maharashtra Electricity Regulatory Commission - India