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Tuesday, 10 September 13
WORLDWIDE COAL CONSUMPTION RISES SHARPLY - RA DR. ERICH SCHMITZ
 By: RA Dr. Erich Schmitz, Verein der Kohlenimporteure (Germany Coal Importers Association)
World hard coal market in the first half of 2013: worldwide production and world trade stagnating, imports to Europe and Germany rise in HY1 2013 despite the massive expansion in renewable energies.
Energy consumption worldwide increases only slightly – in contrast, coal consumption rises sharply.
According to initial calculations by BP in the Statistical Review of World Energy, June 2013, world energy consumption in 2012 experienced a below-average rise of 358m TCE to 17.8bn TCE (about 2%) in comparison with 2011; initial estimates of the World Energy Council for 2012 show a rise of 420m TCE (2.20%) to 19.1bn TCE, taking renewable energies into account. This modest growth is a consequence of the global economic stagnation which has had an impact on the OECD region above all.
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The Asian-Pacific region, where the increase was 4.70%, continues to be a region of growth in primary energy. Worldwide oil consumption of 4,130m tonnes rose only slightly (+1.20%). For the fifth year in succession, the EU 27 countries and the USA reduced their consumption of primary energy, by just under 1% and 2.50%, respectively. Russia ’s energy consumption , on the other hand, remained virtually unchanged.
The rise in the world consumption of primary energy is largely a consequence of the increase in hard coal consumption by about 3.30% and in gas consumption by 2.40% related to the shale gas boom in the USA. In view of the slower economic growth in China, India and other South-east Asian countries and a recession in many OECD countries, the VDKi expects stagnation in primary energy consumption and consequently in coal consumption as well for 2013.
China especially will play a key role here because this country accounts for more than 50% of worldwide coal consumption and worldwide coal production. According to data from the national coal association in China, the consumption of steam and coking coal in HY1 2013 in China amounted to 1.93bn tonnes, corresponding to an increase of only 1% in comparison with 2012, but 7.60% less than during the comparable period of 2011.
On the other hand, production of 1.79bn tonnes during the first six months represented a decline by 3.7% in comparison with HY1 2012. Presumably the high inventories, which according to newspaper reports still amounted in all of China to about 300m tonnes at the end of June, have been reduced.
Seaborne hard coal trade (steam coal only) continues at the level of the previous year (410m tonnes) according to calculations of the VDKi. However, there have been shifts among the exporting nations: Indonesia (+26m tonnes) and Australia (over +10m tonnes) have increased their exports while Colombia (-5m tonnes owing to strikes and logistic restrictions at the beginning of the year), South Africa (almost -3m tonnes) and Russia (-1m tonnes) have exported less steam coal.
The background for the rise in exports from Indonesia and Australia could be China’s announcement that it will in the future prohibit the import of hard coal of lower quality (calorific values, sulphur or ash content) from Indonesia and Australia in particular. This may have led to early deliveries in fulfillment of contractual purchase obligations in existing contracts. According to data from IHS McCloskey Coal Report, China imported about 15m tonnes more coal (hard coal and lignite) during HY1 than in 2012.
Europe and Germany
A slight, but steady, increase in coal consumption in the European Union, especially in the United Kingdom, France and Spain, has been observed in the last two years. Declining hard coal output in Germany, Spain and Poland is being compensated by increased imports.
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The long winter in Europe and the favorable clean dark spread (costs for coal, freight and CO2 certificates), which has been lower in comparison with the clean spark spread (costs for gas, transport and CO2 certificates) for some time, encourage coal-fired power generation in Europe. The electricity is frequently exported to countries strongly dependent on gas such as the United Kingdom or Holland.
According to a report on the European electricity market in Q2 2013 from the EU Commission, the electricity prices for the base load in Q2 fell significantly (weighted for volume , from € 46/MW h in March 2013 to €30/MW h in June 2013 ).
Since coal prices continued to fall as well and the CO2 prices remained low, this meant, according to data from the DG Energy of the EU Commission, that the share of solid fuels for power generation exceeded 50%, which is a higher figure than that of 2012 (45 %). However, the clean dark spread decline d to €4 /MW h; in the two previous quarters, it had still been in the two-digit range. All of this took place against the backdrop of the rising share of renewable energies; production from these sources was high in Q2 and, according to data from the EU, led for instance to negative power prices below -€100 /MW h in Germany and Belgium an d be low -€ 200 /MW h in France on 16 June of this year.
Power generation from gas-fired power plants consequently declined sharply as well because the high gas prices make it unprofitable. EU data show that the clean spark spread fell to below -€19.50 /MW h.
Hard coal imports to Germany rose by 3.4m tonnes (15%) to 25.7m tonnes in the first six months. Extrapolated for all of 2013, this would mean that for the first time since 1957 more than 50m tonnes of hard coal would be imported to Germany. The managing director of the Coal Importer Association, Dr Erich Schmitz, commented on this development: “Of course we would be absolutely delighted by such a high volume of coal imports. However, we must not allow ourselves to be misled about two essential points:
1. The decline in German hard coal mining is making itself felt more and more strongly because it is being compensated by increased imports.
2. If the low electricity wholesale prices resulting from the non-competitive inclusion of the priority feed-in of renewable energies, especially from solar parks, continue, they will constitute a massive threat to the economic existence of hard coal-fired power plants. They can no longer market their electricity profitably on the German market at these prices and profit solely from the export of electricity to countries dominated by power generation from gas-fire d power plants."
This has led the VDKi to affirm its call for a fundamental reform of the compensation for power from renewable sources and for a capacity market for new and existing power plants of all kinds, oriented to a free market and non-discriminatory, immediately after the national election in Germany.
“Otherwise, ” notes Schmitz, “there will be a flood of notifications of shut-downs of older coal- and gas-fired power plants to the Federal Network Agency which could result in a substantial risk for the security of power supply in Germany in 1 to 2 years.”
-Power generation from hard coal-fired power plants in Germany rose by an estimated 5 TWh to about 65 TWh.
-According to data from the AGEB, hard coal consumption for power generation rose by 8.5% to 21.8 million TCE.
-According to data from the AGEB, gross power export rose by 8.4% in comparison with the same period of the previous year to 35.96 TWh; less imports, there is still an export surplus of 15.4 TWh, generated primarily in hard coal-fired power plants.
Source: Verein der Kohlenimporteure (Germany Coal Importers Association)
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Friday, 06 September 24
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- Altura Mining Limited, Indonesia
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- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
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- ICICI Bank Limited - India
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- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Aditya Birla Group - India
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Romanian Commodities Exchange
- Siam City Cement PLC, Thailand
- Manunggal Multi Energi - Indonesia
- Latin American Coal - Colombia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Ministry of Mines - Canada
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- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Africa Commodities Group - South Africa
- Therma Luzon, Inc, Philippines
- Rashtriya Ispat Nigam Limited - India
- Anglo American - United Kingdom
- Ceylon Electricity Board - Sri Lanka
- Essar Steel Hazira Ltd - India
- Vizag Seaport Private Limited - India
- Cement Manufacturers Association - India
- Pipit Mutiara Jaya. PT, Indonesia
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- GVK Power & Infra Limited - India
- Coastal Gujarat Power Limited - India
- Australian Coal Association
- Merrill Lynch Commodities Europe
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- Wood Mackenzie - Singapore
- Meralco Power Generation, Philippines
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- Holcim Trading Pte Ltd - Singapore
- VISA Power Limited - India
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- White Energy Company Limited
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- SMC Global Power, Philippines
- The Treasury - Australian Government
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- Thiess Contractors Indonesia
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- Power Finance Corporation Ltd., India
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- Alfred C Toepfer International GmbH - Germany
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- Dong Bac Coal Mineral Investment Coporation - Vietnam
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- Chamber of Mines of South Africa
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- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
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- Renaissance Capital - South Africa
- Commonwealth Bank - Australia
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- Indonesian Coal Mining Association
- Sojitz Corporation - Japan
- Economic Council, Georgia
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- Ministry of Transport, Egypt
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- TeaM Sual Corporation - Philippines
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Sindya Power Generating Company Private Ltd
- CIMB Investment Bank - Malaysia
- Bhushan Steel Limited - India
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Posco Energy - South Korea
- The University of Queensland
- Orica Mining Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bhatia International Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Price Waterhouse Coopers - Russia
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Planning Commission, India
- Malabar Cements Ltd - India
- Straits Asia Resources Limited - Singapore
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- Gujarat Sidhee Cement - India
- Petron Corporation, Philippines
- Georgia Ports Authority, United States
- Sakthi Sugars Limited - India
- Agrawal Coal Company - India
- Ministry of Finance - Indonesia
- Pendopo Energi Batubara - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Global Business Power Corporation, Philippines
- Indika Energy - Indonesia
- Meenaskhi Energy Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Coal and Oil Company - UAE
- Dalmia Cement Bharat India
- Savvy Resources Ltd - HongKong
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Minerals Council of Australia
- Neyveli Lignite Corporation Ltd, - India
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- Semirara Mining and Power Corporation, Philippines
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- Kumho Petrochemical, South Korea
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