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Friday, 30 March 18
EXPLAINING POLAND'S COAL PARADOX - FORBES
 In the U.S. coal is succumbing to market forces despite the Trump Administration’s push to support the industry. Abundant, cheap and cleaner natural gas together with ever more efficient and increasingly affordable wind and solar continue displacing coal in electricity generation. But to assume this is the general worldwide trend would be a serious mistake. In fact, even in the heart of “renewable-friendly” Europe, coal is and most likely will continue to be a fuel of choice. Despite coal’s obvious shortcomings that include high CO2 content and local air pollutants, Poland projects that in 2050 coal will still constitute 50% of its energy mix. The strong commitment to coal expressed most recently in the government’s program for the hard coal sector, is driven by host of factors that include social, electoral and policy considerations. As a general statement, it is important to understand the powerful role these factors play in the fuel mix across different countries.
Currently, Poland tops the EU list of biggest coal energy producers, and coal continues to dominate the energy mix in Poland (50%), accounting for a whopping 80% of electricity generation. Going forward, the country is looking into expanding coal production through investment in multiple new mines, including those producing lignite. These plans correspond with power-generation and district heating investments in new plants or expansion of existing facilities.
At the same time, Poland has been behind the EU schedule in implementing the mandated share of renewables energy sources (RES) in the Polish energy mix. The government has also been visibly slow with implementing the 2015 law on renewable energy sources, which in contrast to many EU countries, includes coal as part of the renewable energy mix via coal-biomass based cogeneration.
On the surface, the Polish government’s strong commitment to coal is removed from the realities of the current EU policy direction and market conditions. It goes against the trends in most OECD countries where a less-CO2 intensive energy mix includes increases in RES and natural gas while phasing out coal. Additionally, by pursuing coal Poland opens itself to disputes with the EU that can include substantial monetary fines. Moreover, Polish policy seems to contradict the government’s recent commitment to fight high levels of smog in many cities.
However, a deeper dive reveals that the pervasive use of coal in Poland cannot be explained in strictly environmental or market terms, or even in reference to the EU policy direction.
Coal takes a special place not only in Poland’s energy mix but also in the nation’s collective heart. The coal industry has been traditionally revered, if not romanticized, and much of this continues today. As reported by Poland’s Public Opinion Research Center (CBOS) in 2016, miners in Poland are respected at levels (82%) comparable to university professors (80%) and more than medical doctors (74%) or teachers (71%).
Miners have also enjoyed high salaries and pensions, often several times higher than the national average. In addition, they are highly organized within politically influential trade unions. The government is well aware that any decision that endangers the future of mining will meet with substantial protest, as exemplified by the events of 2015 when miners threatened to end the government of Ewa Kopacz, then Polish Prime Minister. A new law to restructure Poland’s largest mining company was met with widespread protests by miners and their unions, who saw the law as a prelude to the closing of four mines in the Upper Silesia region. Negotiations that ensued resulted in the government’s strong commitment to keeping all mines open, effectively assuring the mining jobs that could have otherwise been eliminated.
Thus, any policy that could potentially limit coal and negatively affect mining jobs can have immediate negative consequences for the incumbent government as well as serious electoral implications. There are 55 seats (out of 460 seats) in the Sejm (the lower chamber of the parliament) and 13 (out of 100) in Senate (the upper chamber of the parliament elected in Upper Silesia – the region historically known as “the kingdom of black coal.” Additional “coal” seats are dispersed around the country where lignite is mined. When compared to prospective EU disputes and/or fines, electoral and public support considerations are more immediate and can directly affect chances of survival for any incumbent government.
Intertwined with socio-political consideration is the second major issue that explains coal’s strong position and commitment to coal going forward – energy security. In Poland, the concept of energy security is viewed predominantly as low dependence on Russia, and it is at the top of government and general public priorities. Domestically available coal offers predictability and peace of mind at a time when renewable energy is still at the very beginning of its development, a potential nuclear power plant is still in discussion stages, and the majority of natural gas consumed in Poland needs to be imported from abroad, primarily from Russia.
Recognizing the geopolitical consequences of dependence on Russian gas, Poland has diversified its pool of natural gas providers, thanks to the newly built LNG terminal in Swinoujscie. But, LNG imports are intended to back out Russian gas rather then provide substitute for coal; so they are unlikely to push out coal in the same manner domestically available natural gas has in the US. In fact, part of the planned expansion of LNG imports into Poland is designed to capitalize on Poland becoming a hub for LNG distribution to other European countries.
Coal policy is a difficult balancing act for Poland. It needs to take into account immediate electoral, social and energy security considerations as well as the country’s commitments as a member of the EU. Poland receives substantial EU subsidies, including €27.4 billion for the Program on Infrastructure and Environment that stresses low-emission economy and environmental protection in addition to infrastructure development and energy security. Those funds could potentially be at risk going forward if Poland does not live up to its stated RES and emissions obligations.
The situation is also difficult for the EU more generally, as it highlights the tensions and different priorities between “high income Western Europe” and “middle income Central and Eastern Europe”. To be truly successful the EU has to understand the heterogeneous needs and priorities of its members. Strict RES development goals not adjusted to local needs, combined with potential fines and reprimands for noncompliance are unlikely to achieve the climate and decarbonization goals the EU has established. Instead rigid rules could push countries like Poland where government’s skepticism towards the EU is already high, toward a non-EU future. The issue seems to have been considered by the EU, which has recently committed €1.25 billion ($1.55 billion) to assist the Polish government with mine closures that could address some of the hardships such closures could have for the affected population. One might suspect substantive help provided to coal-dependent regions – including re-training and unemployment compensation – could alleviate some of the social and electoral considerations. Also, support toward less carbon-intensive energy sources that could be developed domestically – such as biogas – could facilitate a less coal-intensive future. Lastly, research toward and potential development of capture and storage solutions and/or coal gasification could accommodate some of Poland’s reliance on coal while minimizing its negative externalities, such as CO2 emissions and smog.
Source: Forbes
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Friday, 27 October 17
U.S WEEKLY COAL PRODUCTION FLAT WEEK OVER WEEK - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 14.9 million short tons ...
Thursday, 26 October 17
CYBER COVER FOR E-BILLS - PHILIP STEPHENSON
KNOWLEDGE TO ELEVATE
Increasingly popular electronic bills of lading are, by their nature, susceptible to the risk of cyber attack. Here, Stan ...
Thursday, 26 October 17
INDO TO CHINA ROUNDS SUPRAS ACHIEVING AROUND HIGH $14000 - FEARNLEYS
Supramax
By mid-week the market has been relatively quiet in the Pacific basin as well, but still some healthy rates being achieved on the differ ...
Thursday, 26 October 17
STRONG SIGNAL FOR AUSTRALIAN COAL DEMAND - GREG EVANS
The International Energy Agency’s Southeast Asia Energy Outlook report, released today, presents a positive outlook for Australian coal produ ...
Wednesday, 25 October 17
COAL MARKETS REMAINED SUBDUED - DANIEL HYNES
Coal markets remained subdued.
Daniel Hynes, Senior Commodity Strategist at ANZ, Coking coal prices were unchanged amid an absence of fresh of ...
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- International Coal Ventures Pvt Ltd - India
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- Energy Link Ltd, New Zealand
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Kaltim Prima Coal - Indonesia
- Coal and Oil Company - UAE
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Indika Energy - Indonesia
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- Trasteel International SA, Italy
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- Australian Commodity Traders Exchange
- Global Green Power PLC Corporation, Philippines
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- Chamber of Mines of South Africa
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- Economic Council, Georgia
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- Commonwealth Bank - Australia
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- Orica Australia Pty. Ltd.
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- Metalloyd Limited - United Kingdom
- Cement Manufacturers Association - India
- Global Coal Blending Company Limited - Australia
- AsiaOL BioFuels Corp., Philippines
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- Planning Commission, India
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- Kumho Petrochemical, South Korea
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- PNOC Exploration Corporation - Philippines
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- Therma Luzon, Inc, Philippines
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- Indonesian Coal Mining Association
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- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- The Treasury - Australian Government
- SMG Consultants - Indonesia
- Ministry of Transport, Egypt
- Sinarmas Energy and Mining - Indonesia
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
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- Alfred C Toepfer International GmbH - Germany
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Latin American Coal - Colombia
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Jorong Barutama Greston.PT - Indonesia
- The State Trading Corporation of India Ltd
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- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Baiduri Energy - Indonesia
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Baramulti Group, Indonesia
- Thiess Contractors Indonesia
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- Rio Tinto Coal - Australia
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- South Luzon Thermal Energy Corporation
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- McConnell Dowell - Australia
- Globalindo Alam Lestari - Indonesia
- Ind-Barath Power Infra Limited - India
- Georgia Ports Authority, United States
- Malabar Cements Ltd - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
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- Romanian Commodities Exchange
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- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- London Commodity Brokers - England
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- Star Paper Mills Limited - India
- Energy Development Corp, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
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- PowerSource Philippines DevCo
- Indian Energy Exchange, India
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- SN Aboitiz Power Inc, Philippines
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- Merrill Lynch Commodities Europe
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- Indian Oil Corporation Limited
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- GAC Shipping (India) Pvt Ltd
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- Gujarat Electricity Regulatory Commission - India
- Orica Mining Services - Indonesia
- Bukit Makmur.PT - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- India Bulls Power Limited - India
- VISA Power Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Australian Coal Association
- CNBM International Corporation - China
- Semirara Mining Corp, Philippines
- Kapuas Tunggal Persada - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Vizag Seaport Private Limited - India
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Ceylon Electricity Board - Sri Lanka
- Grasim Industreis Ltd - India
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- TeaM Sual Corporation - Philippines
- Altura Mining Limited, Indonesia
- Meralco Power Generation, Philippines
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- New Zealand Coal & Carbon
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- Samtan Co., Ltd - South Korea
- Bulk Trading Sa - Switzerland
- Kepco SPC Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
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