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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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- Makarim & Taira - Indonesia
- Kaltim Prima Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Global Business Power Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Wilmar Investment Holdings
- Metalloyd Limited - United Kingdom
- Latin American Coal - Colombia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- SMC Global Power, Philippines
- Economic Council, Georgia
- Romanian Commodities Exchange
- Ceylon Electricity Board - Sri Lanka
- Pendopo Energi Batubara - Indonesia
- Standard Chartered Bank - UAE
- Gujarat Electricity Regulatory Commission - India
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- IHS Mccloskey Coal Group - USA
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Semirara Mining Corp, Philippines
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
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- Bukit Asam (Persero) Tbk - Indonesia
- GVK Power & Infra Limited - India
- PTC India Limited - India
- Rio Tinto Coal - Australia
- Altura Mining Limited, Indonesia
- Independent Power Producers Association of India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- San Jose City I Power Corp, Philippines
- Cement Manufacturers Association - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Minerals Council of Australia
- McConnell Dowell - Australia
- VISA Power Limited - India
- Planning Commission, India
- Renaissance Capital - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Indian Energy Exchange, India
- Baramulti Group, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Trasteel International SA, Italy
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GMR Energy Limited - India
- Meenaskhi Energy Private Limited - India
- Ministry of Mines - Canada
- Global Green Power PLC Corporation, Philippines
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Bangladesh Power Developement Board
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Price Waterhouse Coopers - Russia
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Krishnapatnam Port Company Ltd. - India
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Uttam Galva Steels Limited - India
- Aboitiz Power Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- Electricity Authority, New Zealand
- Antam Resourcindo - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- TeaM Sual Corporation - Philippines
- Dalmia Cement Bharat India
- Vijayanagar Sugar Pvt Ltd - India
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- White Energy Company Limited
- LBH Netherlands Bv - Netherlands
- Indo Tambangraya Megah - Indonesia
- SN Aboitiz Power Inc, Philippines
- Goldman Sachs - Singapore
- Australian Coal Association
- Kohat Cement Company Ltd. - Pakistan
- CNBM International Corporation - China
- Orica Mining Services - Indonesia
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Merrill Lynch Commodities Europe
- Salva Resources Pvt Ltd - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- European Bulk Services B.V. - Netherlands
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Indika Energy - Indonesia
- Mjunction Services Limited - India
- Bhoruka Overseas - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Agrawal Coal Company - India
- Orica Australia Pty. Ltd.
- Posco Energy - South Korea
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Kobexindo Tractors - Indoneisa
- Deloitte Consulting - India
- Vedanta Resources Plc - India
- South Luzon Thermal Energy Corporation
- Jindal Steel & Power Ltd - India
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Binh Thuan Hamico - Vietnam
- Bahari Cakrawala Sebuku - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Banpu Public Company Limited - Thailand
- The University of Queensland
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Aditya Birla Group - India
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Neyveli Lignite Corporation Ltd, - India
- New Zealand Coal & Carbon
- Heidelberg Cement - Germany
- Maharashtra Electricity Regulatory Commission - India
- Essar Steel Hazira Ltd - India
- Therma Luzon, Inc, Philippines
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kapuas Tunggal Persada - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Parry Sugars Refinery, India
- Port Waratah Coal Services - Australia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Sojitz Corporation - Japan
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- Kartika Selabumi Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Interocean Group of Companies - India
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Straits Asia Resources Limited - Singapore
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Miang Besar Coal Terminal - Indonesia
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- GN Power Mariveles Coal Plant, Philippines
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Parliament of New Zealand
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Tata Chemicals Ltd - India
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ministry of Finance - Indonesia
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