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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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Wednesday, 20 October 21
CHINA COAL HITS RECORD HIGH AMID TIGHT SUPPLIES - REUTERS
China coal prices hit a record high on Tuesday buoyed by a widening power crunch and cold weather despite Beijing’s efforts to bolster supply ...
Wednesday, 20 October 21
MARKET INSIGHT - INTERMODAL
IMO 2020, Ballast Water Treatment regulations, Green Recycling, GHG emissions, EEXI, CII, ETS, Fit for 55, Carbon price/levy, the Poseidon Principl ...
Tuesday, 19 October 21
SPONGE IRON SECTOR MIGHT REPORT NEGATIVE GROWTH DUE TO COAL CRISIS: SIMA - PTI
The domestic sponge iron industry might report a negative growth in the ongoing December quarter “if the shortage of coal is allowed to conti ...
Tuesday, 19 October 21
COAL INDIA, THE FALL GUY FOR POWER CRISIS - INDIA EXPRESS
The post-Covid economic recovery has led to a major increase in the demand for power, both in India and globally. In India, coal-based power plants ...
Saturday, 16 October 21
SOLAR INSTALLATION SURGE PUTS INDIA ON TRACK TO CAP COAL-FIRED POWER AS EARLY AS 2024 - IEEFA
Recent increase in solar power installations could push coal to peak sooner than expected
If India keeps installing solar capacity a ...
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- Aditya Birla Group - India
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mjunction Services Limited - India
- Eastern Energy - Thailand
- Therma Luzon, Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- IEA Clean Coal Centre - UK
- London Commodity Brokers - England
- Straits Asia Resources Limited - Singapore
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Renaissance Capital - South Africa
- Timah Investasi Mineral - Indoneisa
- Marubeni Corporation - India
- Indo Tambangraya Megah - Indonesia
- Sical Logistics Limited - India
- Kaltim Prima Coal - Indonesia
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Indian Energy Exchange, India
- Indian Oil Corporation Limited
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Cigading International Bulk Terminal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Orica Mining Services - Indonesia
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- Medco Energi Mining Internasional
- Ministry of Mines - Canada
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Maheswari Brothers Coal Limited - India
- Edison Trading Spa - Italy
- Iligan Light & Power Inc, Philippines
- Cement Manufacturers Association - India
- Gujarat Electricity Regulatory Commission - India
- Bukit Makmur.PT - Indonesia
- Mercuria Energy - Indonesia
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- PTC India Limited - India
- SMG Consultants - Indonesia
- Bhushan Steel Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Meralco Power Generation, Philippines
- Bharathi Cement Corporation - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Coal Association
- Oldendorff Carriers - Singapore
- Kepco SPC Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Pipit Mutiara Jaya. PT, Indonesia
- Uttam Galva Steels Limited - India
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Salva Resources Pvt Ltd - India
- LBH Netherlands Bv - Netherlands
- Eastern Coal Council - USA
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Electricity Authority, New Zealand
- Miang Besar Coal Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- Singapore Mercantile Exchange
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Kumho Petrochemical, South Korea
- Ministry of Finance - Indonesia
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement PLC, Thailand
- Wood Mackenzie - Singapore
- Leighton Contractors Pty Ltd - Australia
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Sojitz Corporation - Japan
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- TeaM Sual Corporation - Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Lanco Infratech Ltd - India
- Interocean Group of Companies - India
- McConnell Dowell - Australia
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Kideco Jaya Agung - Indonesia
- Carbofer General Trading SA - India
- Bukit Asam (Persero) Tbk - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Independent Power Producers Association of India
- Vizag Seaport Private Limited - India
- Barasentosa Lestari - Indonesia
- Antam Resourcindo - Indonesia
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Manunggal Multi Energi - Indonesia
- White Energy Company Limited
- Makarim & Taira - Indonesia
- Pendopo Energi Batubara - Indonesia
- Ministry of Transport, Egypt
- Coal and Oil Company - UAE
- Formosa Plastics Group - Taiwan
- PowerSource Philippines DevCo
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- CIMB Investment Bank - Malaysia
- Indogreen Group - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CNBM International Corporation - China
- Kartika Selabumi Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- The University of Queensland
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- Posco Energy - South Korea
- Baramulti Group, Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Planning Commission, India
- VISA Power Limited - India
- India Bulls Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Savvy Resources Ltd - HongKong
- Parliament of New Zealand
- Agrawal Coal Company - India
- Romanian Commodities Exchange
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Altura Mining Limited, Indonesia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Madhucon Powers Ltd - India
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- New Zealand Coal & Carbon
- Intertek Mineral Services - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Dalmia Cement Bharat India
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Sakthi Sugars Limited - India
- Banpu Public Company Limited - Thailand
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Economic Council, Georgia
- Bukit Baiduri Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indika Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Georgia Ports Authority, United States
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
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