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Thursday, 14 October 21
SPIKING COAL PRICES: DON’T BLAME THE ENERGY TRANSITION - IEEFA
 Volatility highlights urgency for renewables-based energy solutions
“Energy crisis.” The phrase evokes nearly-forgotten images of gasoline queues in the 1970s, but increasingly describes the spike in global fossil fuel prices. A handful of commenters eagerly lay the blame on renewable energy, which they claim has distracted the world’s attention from investments in oil, gas, and coal production that could have calmed markets.
But a sober analysis suggests that today’s energy price crunch has nothing to do with renewables. After all, price spikes aren’t unique to energy. Computer chips, lumber, copper, and iron ore are among the many commodities and products that have seen global price spikes and shortages this year. As the COVID-19 pandemic raged and then eased—alternately slamming the brakes and flooring the accelerator of the global economy—volatility became the rule rather than the exception.
A close look at the surge in global coal prices is instructive. Prices for some low-grade thermal coals have quadrupled on international markets since last year’s lows. COVID-induced volatility bears much of the blame. But price spike also has its roots in the world’s largest coal market, China, which produces (and consumes) half the world’s coal and meets 60 percent of its energy needs from the mineral.
Over the past year, China has experienced domestic coal shortfalls and shrinking stockpiles that forced the country to boost its imports. Given the country’s outsized appetite for coal, even a modest boost in imports quickly sent seaborne coal prices skyrocketing. The recipe for China’s coal shortages had at least five key ingredients, none related to the country’s renewables policies:
A mine safety crackdown. The Chinese coal mining sector has been a risky business. The state-run Xinhua News Agency reported that 225 coal miners died in China during 2020 in 122 accidents. But in the wake of a cluster of fatalities, federal authorities launched a major safety inspection effort in November 2020. The heightened scrutiny was blamed for a slowdown in production that began in April, a month after China boosted penalties for mine accidents. The prospect of jail time made mining executives reluctant to boost output even as supplies tightened.
Curbs on overproduction. China’s coal mining sector had struggled over much of the past decade with overcapacity that flooded markets with cheap coal—making it hard for many firms to find profits. Last November, just as China’s government was cracking down on coal mine safety, it also stepped up inspections for quota violations—once again making it risky for mining companies to boost supplies.
An anti-corruption campaign in Inner Mongolia. One of China’s most sparsely populated provinces, Inner Mongolia produces roughly one-quarter of the nation’s coal. President Xi Jinping announced in March that the government would investigate coal industry corruption in the region in a campaign that would “never end.” (The campaign focused, in part, on companies producing more coal than their quotas.) Top officials in the regional government have been sent to jail for more than a decade, with one given a suspended death sentence. In early 2021, the government was investigating almost 700 corruption cases involving about 1,000 people. The campaign, which was expanded across the country, also encouraged coal mining firms to curb their production to avoid becoming entangled in an investigation.
A halt to Australian coal imports. Tensions between Australia and its largest trading partner heated up last year, largely due to China’s territorial claims in the Pacific Ocean and the Australian government’s call for a “weapons inspector”-type investigation of the origins of the COVID-19 virus. China responded by blocking Australian coal imports in November 2020. The squabble led Beijing to seek out other markets for coal imports from Indonesia, Russia, the United States and South Africa. The shift contributed to a tripling in the price of lower-grade Indonesia coal over the summer.
Weather: Too cold, too hot, and too wet. An unusually cold 2020-21 winter in North Asia prompted blackouts in some regions. At least nine grid systems in northern provinces recorded record demand in early January. Summer heat waves continued to pressure the coal supply. Now winter approaches, and major power plants reported having about a 10-day stockpile of coal, roughly half of last year’s total. The country, desperate to boost coal consumption, faces a new weather-related obstacle: Record-breaking floods have shut down 60 mines in Shanxi province, a region that produces 30 percent of China’s coal.
These factors, together with COVID, helped precipitate a domestic coal crunch in China that quickly spread around the planet. Those who would blame the growth of renewables for China’s coal shortages are grasping at straws. If anything, ramping up investments in renewables would ease the country’s reliance on volatile, unpredictable fossil fuel supplies.
As for China, so for the world. Until the planet completes its transition to a renewable energy-based economy, supply and demand shocks—such as the ones currently traveling around the globe—will be a fact of life.
By Clark Williams-Derry
Energy Policy Analyst
IEEFA
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Tuesday, 14 December 21
COAL LOCK-IN IN SOUTHEAST ASIA PRESENTS A CHALLENGE FOR THE ASIAN DEVELOPMENT BANK'S COAL RETIREMENT PLAN - IEEFA
In August, the Asian Development Bank (ADB) announced an ambitious plan to buy high emissions coal-fired power plants in Southeast Asia and retire ...
Saturday, 11 December 21
BUNKER BUYERS LOSE UP TO $5/MT FOR NOT COVERING ENOUGH SUPPLIERS - INTEGR8 FUELS
With the Brent price recently touching the $80 mark and before the Omicron variant concerns pushed it lower, bunker prices reached levels not seen ...
Tuesday, 07 December 21
SUPERCYCLE DEMAND: ARE WE THERE YET? - WOOD MACKENZIE
Taking young children on a long journey is fraught with challenges, not least the inevitable question a few minutes after leaving: are we there yet ...
Tuesday, 07 December 21
COAL WOULD REMAIN ENERGY LEADER FOR AT LEAST 15 YEARS - LIVEMINT
Coal India Ltd (CIL) has been in the eye of the storm after fuel stocks at coal-fuelled power plants depleted in October. Fuel stocks since are bei ...
Tuesday, 07 December 21
GLOBAL SHIPPING OUTLOOK TURNS STABLE FROM POSITIVE ON THE BACK OF PEAKING EARNINGS DURING 2021 - MOODY'S
The outlook for the global shipping industry is changed to stable from positive for the next 12 to 18 months due to demand slightly outstripping su ...
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- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Minerals Council of Australia
- South Luzon Thermal Energy Corporation
- India Bulls Power Limited - India
- Indo Tambangraya Megah - Indonesia
- European Bulk Services B.V. - Netherlands
- Kapuas Tunggal Persada - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Sinarmas Energy and Mining - Indonesia
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Directorate Of Revenue Intelligence - India
- IHS Mccloskey Coal Group - USA
- Bhoruka Overseas - Indonesia
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- Mercuria Energy - Indonesia
- Star Paper Mills Limited - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Jorong Barutama Greston.PT - Indonesia
- Eastern Coal Council - USA
- Planning Commission, India
- Indonesian Coal Mining Association
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- Mercator Lines Limited - India
- Semirara Mining and Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bangladesh Power Developement Board
- Sojitz Corporation - Japan
- Attock Cement Pakistan Limited
- GAC Shipping (India) Pvt Ltd
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Electricity Authority, New Zealand
- Posco Energy - South Korea
- Manunggal Multi Energi - Indonesia
- Independent Power Producers Association of India
- Port Waratah Coal Services - Australia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Miang Besar Coal Terminal - Indonesia
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
- PowerSource Philippines DevCo
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Marubeni Corporation - India
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- Goldman Sachs - Singapore
- Tata Chemicals Ltd - India
- ASAPP Information Group - India
- Indian Oil Corporation Limited
- Barasentosa Lestari - Indonesia
- San Jose City I Power Corp, Philippines
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Malabar Cements Ltd - India
- The University of Queensland
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Georgia Ports Authority, United States
- Cigading International Bulk Terminal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Rashtriya Ispat Nigam Limited - India
- Sakthi Sugars Limited - India
- New Zealand Coal & Carbon
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Commonwealth Bank - Australia
- Renaissance Capital - South Africa
- Thai Mozambique Logistica
- IEA Clean Coal Centre - UK
- Kaltim Prima Coal - Indonesia
- Larsen & Toubro Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Madhucon Powers Ltd - India
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- White Energy Company Limited
- Globalindo Alam Lestari - Indonesia
- GVK Power & Infra Limited - India
- Economic Council, Georgia
- AsiaOL BioFuels Corp., Philippines
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- International Coal Ventures Pvt Ltd - India
- Makarim & Taira - Indonesia
- Singapore Mercantile Exchange
- Cement Manufacturers Association - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- The Treasury - Australian Government
- Coalindo Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Wilmar Investment Holdings
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Thiess Contractors Indonesia
- McConnell Dowell - Australia
- Australian Coal Association
- Directorate General of MIneral and Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Essar Steel Hazira Ltd - India
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- London Commodity Brokers - England
- Indika Energy - Indonesia
- Australian Commodity Traders Exchange
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Sarangani Energy Corporation, Philippines
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Petron Corporation, Philippines
- The State Trading Corporation of India Ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Ministry of Mines - Canada
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Kohat Cement Company Ltd. - Pakistan
- Romanian Commodities Exchange
- Pendopo Energi Batubara - Indonesia
- Central Java Power - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Oldendorff Carriers - Singapore
- CNBM International Corporation - China
- Sical Logistics Limited - India
- Heidelberg Cement - Germany
- Deloitte Consulting - India
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Intertek Mineral Services - Indonesia
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Gujarat Sidhee Cement - India
- Riau Bara Harum - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- SN Aboitiz Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kepco SPC Power Corporation, Philippines
- Mintek Dendrill Indonesia
- Ceylon Electricity Board - Sri Lanka
- Mjunction Services Limited - India
- Standard Chartered Bank - UAE
- Semirara Mining Corp, Philippines
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Coastal Gujarat Power Limited - India
- Coal and Oil Company - UAE
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- Meralco Power Generation, Philippines
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Simpson Spence & Young - Indonesia
- Jaiprakash Power Ventures ltd
- Energy Link Ltd, New Zealand
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Bhushan Steel Limited - India
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