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Friday, 19 November 10
WE'LL THINK ABOUT COAL TOMORROW - ANALYSIS
 The future of coal generation in Russia is in question. The largest energy companies have abandoned their initial plans to switch their thermal power stations over to solid fuel. Experts think that the power-plant operators' unquenchable love for gas is not only destroying the coal industry, it is threatening the country's energy security. A correspondent for RusBusinessNews armed himself with statistics and delved into the causes and possible consequences of yet another victory of the blue flame over coal.
A COAL RENAISSANCE
Up until the 1980's, the Soviet generation actively burned coal. Then they took a so-called "gas break," and solid fuel was gradually squeezed out by gas. This "break" was supposed to last no more than 10-15 years - the amount of time energy engineers and scientists needed to develop new, more economical, and environmentally friendly ways of burning coal. But the reforms of the 1990's upset those plans and the process of returning to coal production dragged on for another decade.
The beginning of the 21st century could be called the coal renaissance era. The energy industry could barely keep up with the growing needs of Russia's reviving industrial sector. An urgent need arose to construct new facilities and rebuild older ones. Gazprom's increased exports caused a gas shortage on the domestic market, which prompted power-plant operators to resurrect the idea of returning to coal production. In addition, there was an economic incentive - in the mid-2000's, gas and coal were approximately equal in price.
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In 2006, RAO UES of Russia promised to reduce the percentage of gas in the country's fuel balance from 69% to 67% over the course of four years, and to bring it down to 60% by 2015. They planned to increase the percentage of solid fuel from 27% to 37% in the next nine years. The work begun by RAO was continued by its "daughter" companies: OGK and TGK (Wholesale Generation Company and Territorial Generation Company). A few years ago, TGK-10 (the public corporation Fortum) was planning to switch three of its thermal power stations in the Chelyabinsk region to solid fuel. This coal strategy was developed by KES-Holding, OGK-1, and OGK-3. OGK-3 was also actively buying up coal.
Although the power-plant operators' plans were frozen by the economic crisis in 2008, by 2009 and early 2010, coal was revived by the price increase of gas and began once again nipping at gas's heels. "The price of gas has increased 25% almost every year for the past three years. If this hike continues, we will actively seek to increase the percentage of coal we use," claimed Mikhail Slobodin, the president of KES-Holding, last April. The company expects to save a billion cubic meters of gas at its power plants in the Sverdlovsk region by the end of 2010.
But six months later, KES and other energy companies reversed course. "The fuel balance structure will remain as it is for now. The Chinese demand for high-energy coal prompted a jump in the price of solid fuel. In addition, there is currently a surplus of gas on the market," said Eduard Smelov, the executive vice president of KES, in October of 2010.
Analysts note that this "surplus" is the result of setbacks Gazprom has experienced with its exports. According to Igor Yushkov, an expert with the Foundation for National Energy Security, the gas giant lost its European market this year because of the "shale" revolution in the US. "This enormous Russian company had recently devised big plans to enter markets in the East and West. However, after the US dramatically increased its production of gas in early 2010, Europe reduced the amount of gas it imports from Russia. Gazprom must now increase its presence on the domestic market," notes Igor Yushkov.
This change in the market for the monopoly's products has forced power-plant operators to adjust their fuel plans, pushing coal projects into the background.
A FUEL IMBALANCE IN AN UNDERDEVELOPED ENERGY INDUSTRY
The fuel used by Russian electric plants consists of 70% gas and only 28% coal. No other country uses a mix like that. According to data from the Institute for Energy Research, coal production accounts for an average of 39% of the fuel used in power plants throughout the world. In many countries, it accounts for half of energy companies' fuel portfolios: in Poland - 96%, India - 81%, China -79%, USA - 54%, and Germany - 51%. In recent years coal has become even more attractive for Europe, due to doubts about the reliability of gas shipments caused by the energy disputes between Russia and Ukraine.
Russia has enormous reserves of solid fuel - 192.3 billion tons of categories A+B+C1, and 78.5 billion tons of category C2. 80% of these supplies consist of steam coal. The Kuznetsk basin is the largest supplier of coal, producing 55% of all of the country's solid fuel. Every year Russia produces over 300 million tons of coal.
About 20 coal-gas plants operate in the country. It's estimated that a full changeover of these plants to coal will save up to 27 billion cubic meters of gas per year. "When we burn gas, we're burning our future, our currency, and new technology. Gas should be used very sparingly - we should be getting our energy from coal," confidently claims Ivan Mokhnachuk, the chairman of the independent union of coal-industry workers.
But experts note that the Russian energy industry might not be ready for a "coal" revolution. "The declaration by energy companies that they were switching to coal was just a game of chicken that Gazprom started. It costs an enormous amount of money to retrofit a plant to use a different type of fuel, and the power-plant operators will never do it voluntarily. It's not at all realistic to try to force them to build modern coal facilities," a representative from one energy company told RusBusinessNews.
According to him, a coal power unit is 33% more expensive than a gas unit, amounting to about $2,000 for one kilowatt of energy. It also costs a lot of money to build an ash-disposal site, a water-intake structure, and treatment facilities. And in addition, one has to regularly pay penalties for air pollution and adopt expensive Western technology to burn coal with less environmental damage. Unfortunately, Russian science and industry cannot provide power-plant operators with their own technology. And the technology that they managed to create in the USSR before the era of perestroika is now hopelessly outdated.
"In the last twenty years, Europe has made huge technological breakthroughs for using coal energy. But we're still stuck in the 1980's," claims Leonid Solovjev, the chief engineer at the Sverdlovsk branch of TGK-9.
THAT DEVIOUS GAZPROM...
Compared to other regions, the fuel component of the energy industry in the Urals seems balanced. According to information from Petr Erokhina, the director of the Joint Dispatch Office for Urals Energy Systems (ODU Ural), the ratio of gas to coal in the Urals Federal District is 50/50, and even 40/60 in some areas. However, gas has recently been slowly squeezing out its competitor in the Sverdlovsk and Chelyabinsk regions. For obvious reasons, coal is not even discussed in the oil- and gas-rich Tyumen region, Yugra, and Yamal.
Much of the energy in the industrial areas of the Urals Federal District comes from burning coal from Ekibastuz (Kazakhstan) as well as local coal. The latter is of very low quality. "The thermal power station in Bogoslovsk consumes about one million tons of Volchansk coal every year. It's really filthy to burn. But if we refuse to use it, the miners will be out of work," explained Leonid Solovjev. The Forum corporation, in turn, is not ruling out gradually replacing Korkinsk coal (Chelyabinsk region) with an imported variety.
Nor does the Ekibastuz coal meet the requirements of Urals power-plant operators. "Half of every 100 cars of coal isn't coal at all - it's ash, which damages the equipment and which we have to find somewhere to store. For comparison: in Europe you're only allowed to have 10% ash, because the fuel there is treated right at the production site," notes Leonid Solovjev.
Coal in Russia is treated as well, but as a rule, the higher-quality energy resources are saved for export. The paradox is that our domestic thermal power stations are not designed for high-energy fuel. They can only burn untreated coal at a low level of efficiency and create kilowatt hours with a high production cost. "A review of our fuel options would require changes to the way we burn coal and a strict compliance with the technology. We would need serious investment to modernize our plants - up to $100 per kilowatt of installed capacity," claim representatives of the private company E4-SibKOTES.
These constraints are only part of a long list of problems connected with retrofitting the Russian energy industry. Leonid Solovjev notes that using solid fuel is financially viable as long as gas is two or three times as expensive as coal (currently the difference is 20-30%). Nor does Petr Erokhin see an economic reason for this fuel revolution. But he is certain that the development of coal production is vital to the country's energy security.
However, a number of experts believe that it's not worth it for Russia to change its gas habit. Igor Yushkov notes that the country has enough gas reserves to last a long time, and all the talk about an impending shortage is just Gazprom being devious.
The existing technological and financial obstacles, global economic trends, business interests, plus Gazprom's administrative resources all give one confidence that Russia's energy industry will be focusing on gas for the next five years. Perhaps coal will gain the upper hand once the price of gas equalizes on the foreign and domestic markets. But in any event, should the fuel revolution actually happen, it will be consumers who will have to pay for it.
Source: RusBusiness News
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Wednesday, 17 November 10
DRY BULK MARKET LOOKING FOR SUPPORT IN COAL TRADES AND INDIAN IRON ORE EXPORTS - NIKOS ROUSSANOGLOU, HELLENIC SHIPPING
Nikos Roussanoglou, Hellenic Shipping reported that, the dry bulk market is lacking support to end its 13-day slide, as evidenced by Monday’s ...
Tuesday, 16 November 10
'VALLAR PLC' TO BECOME 'BUMI PLC' POST DEAL - THE JAKARTA POST
The Jakarta Post reported that, The United Kingdom’s Vallar Plc will change its name to Bumi Plc following a cash and stock transaction with t ...
Tuesday, 16 November 10
ROTHSCHILD BUYS INDONESIAN COAL STAKES FOR $3 BILLION - BLOOMBERG
Bloomberg reported that, Nathaniel Rothschild, the only son of U.K. financier Jacob Rothschild, agreed to invest $3 billion in two Indonesian coal c ...
Sunday, 14 November 10
THE FREIGHT MARKET CONTINUED ITS DOWN FALL - VISTAAR SINGAPORE
COALspot.com: The freight market continued its down fall with BDI down by 7.29 pct and closed at 2,313 points.
All other segments were also under ...
Saturday, 13 November 10
INDONESIA SHIPPED 8.73 % MORE COAL IN OCTOBER THAN A MONTH EARLIER
COALspot.com: Indonesia, the world largest coal exporter, shipped 23.55 mln mt of coal in October 2010, which is 8.73 percent more compared to Septe ...
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Showing 5526 to 5530 news of total 6871 |
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- Jaiprakash Power Ventures ltd
- Star Paper Mills Limited - India
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Electricity Generating Authority of Thailand
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Manunggal Multi Energi - Indonesia
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Goldman Sachs - Singapore
- Indo Tambangraya Megah - Indonesia
- Parry Sugars Refinery, India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Global Green Power PLC Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- Videocon Industries ltd - India
- TeaM Sual Corporation - Philippines
- PetroVietnam Power Coal Import and Supply Company
- Dalmia Cement Bharat India
- Ministry of Finance - Indonesia
- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- GAC Shipping (India) Pvt Ltd
- Ind-Barath Power Infra Limited - India
- Billiton Holdings Pty Ltd - Australia
- Africa Commodities Group - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Samtan Co., Ltd - South Korea
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- PTC India Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Rio Tinto Coal - Australia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- The University of Queensland
- Independent Power Producers Association of India
- Posco Energy - South Korea
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- SMG Consultants - Indonesia
- Eastern Coal Council - USA
- OPG Power Generation Pvt Ltd - India
- London Commodity Brokers - England
- Standard Chartered Bank - UAE
- Petrochimia International Co. Ltd.- Taiwan
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Global Coal Blending Company Limited - Australia
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Port Waratah Coal Services - Australia
- Aboitiz Power Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Sidhee Cement - India
- Coastal Gujarat Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Timah Investasi Mineral - Indoneisa
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- Electricity Authority, New Zealand
- Borneo Indobara - Indonesia
- The State Trading Corporation of India Ltd
- Baramulti Group, Indonesia
- Central Java Power - Indonesia
- Grasim Industreis Ltd - India
- Commonwealth Bank - Australia
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- MS Steel International - UAE
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Meenaskhi Energy Private Limited - India
- Energy Development Corp, Philippines
- Wood Mackenzie - Singapore
- Banpu Public Company Limited - Thailand
- ASAPP Information Group - India
- Globalindo Alam Lestari - Indonesia
- Bhatia International Limited - India
- Uttam Galva Steels Limited - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- Meralco Power Generation, Philippines
- CIMB Investment Bank - Malaysia
- McConnell Dowell - Australia
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Power Finance Corporation Ltd., India
- Karbindo Abesyapradhi - Indoneisa
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Anglo American - United Kingdom
- Semirara Mining Corp, Philippines
- Planning Commission, India
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Mjunction Services Limited - India
- Heidelberg Cement - Germany
- Vijayanagar Sugar Pvt Ltd - India
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Siam City Cement - Thailand
- AsiaOL BioFuels Corp., Philippines
- Aditya Birla Group - India
- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Formosa Plastics Group - Taiwan
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Madhucon Powers Ltd - India
- Sakthi Sugars Limited - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Indonesian Coal Mining Association
- Lanco Infratech Ltd - India
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- European Bulk Services B.V. - Netherlands
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Kideco Jaya Agung - Indonesia
- Orica Australia Pty. Ltd.
- Antam Resourcindo - Indonesia
- Riau Bara Harum - Indonesia
- Agrawal Coal Company - India
- Tamil Nadu electricity Board
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Australian Commodity Traders Exchange
- Cement Manufacturers Association - India
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Economic Council, Georgia
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Indian Energy Exchange, India
- Mercuria Energy - Indonesia
- Bharathi Cement Corporation - India
- Larsen & Toubro Limited - India
- White Energy Company Limited
- Vedanta Resources Plc - India
- Xindia Steels Limited - India
- Carbofer General Trading SA - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Alfred C Toepfer International GmbH - Germany
- Gujarat Electricity Regulatory Commission - India
- VISA Power Limited - India
- Kartika Selabumi Mining - Indonesia
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Pendopo Energi Batubara - Indonesia
- Eastern Energy - Thailand
- Karaikal Port Pvt Ltd - India
- Central Electricity Authority - India
- PNOC Exploration Corporation - Philippines
- Thai Mozambique Logistica
- Kobexindo Tractors - Indoneisa
- Parliament of New Zealand
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