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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, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
Monday, 11 October 21
COAL ABANDONMENT IN POWER GENERATION PROMOTED GAS DEMAND GROWTH IN EUROPE - TOP MANAGER: TASS
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led t ...
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- VISA Power Limited - India
- Bhoruka Overseas - Indonesia
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Mjunction Services Limited - India
- Mercuria Energy - Indonesia
- Madhucon Powers Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Siam City Cement - Thailand
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Power Finance Corporation Ltd., India
- Pendopo Energi Batubara - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Dalmia Cement Bharat India
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Mintek Dendrill Indonesia
- Jindal Steel & Power Ltd - India
- Samtan Co., Ltd - South Korea
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Energy Link Ltd, New Zealand
- Kideco Jaya Agung - Indonesia
- Meenaskhi Energy Private Limited - India
- Australian Commodity Traders Exchange
- India Bulls Power Limited - India
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- GMR Energy Limited - India
- Karaikal Port Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- Australian Coal Association
- Sical Logistics Limited - India
- ICICI Bank Limited - India
- PNOC Exploration Corporation - Philippines
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Savvy Resources Ltd - HongKong
- Makarim & Taira - Indonesia
- Medco Energi Mining Internasional
- Agrawal Coal Company - India
- TNB Fuel Sdn Bhd - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Meralco Power Generation, Philippines
- Antam Resourcindo - Indonesia
- Kartika Selabumi Mining - Indonesia
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Independent Power Producers Association of India
- Borneo Indobara - Indonesia
- Price Waterhouse Coopers - Russia
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- Africa Commodities Group - South Africa
- New Zealand Coal & Carbon
- TeaM Sual Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Georgia Ports Authority, United States
- McConnell Dowell - Australia
- Kapuas Tunggal Persada - Indonesia
- Parry Sugars Refinery, India
- Indian Energy Exchange, India
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Merrill Lynch Commodities Europe
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Tamil Nadu electricity Board
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- The State Trading Corporation of India Ltd
- Binh Thuan Hamico - Vietnam
- Central Java Power - Indonesia
- Bulk Trading Sa - Switzerland
- Videocon Industries ltd - India
- Deloitte Consulting - India
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Coalindo Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Larsen & Toubro Limited - India
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Iligan Light & Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The Treasury - Australian Government
- Bukit Baiduri Energy - Indonesia
- Indo Tambangraya Megah - Indonesia
- Grasim Industreis Ltd - India
- Star Paper Mills Limited - India
- Ministry of Transport, Egypt
- White Energy Company Limited
- The University of Queensland
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Eastern Energy - Thailand
- Mercator Lines Limited - India
- Electricity Generating Authority of Thailand
- Ind-Barath Power Infra Limited - India
- IHS Mccloskey Coal Group - USA
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Sidhee Cement - India
- Kumho Petrochemical, South Korea
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Chettinad Cement Corporation Ltd - India
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- PTC India Limited - India
- AsiaOL BioFuels Corp., Philippines
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Riau Bara Harum - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate General of MIneral and Coal - Indonesia
- Manunggal Multi Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Renaissance Capital - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Straits Asia Resources Limited - Singapore
- Jorong Barutama Greston.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Vedanta Resources Plc - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Intertek Mineral Services - Indonesia
- Aditya Birla Group - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- Marubeni Corporation - India
- Indogreen Group - Indonesia
- Globalindo Alam Lestari - Indonesia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Singapore Mercantile Exchange
- Global Green Power PLC Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Semirara Mining Corp, Philippines
- Minerals Council of Australia
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Sindya Power Generating Company Private Ltd
- Maheswari Brothers Coal Limited - India
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Standard Chartered Bank - UAE
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Interocean Group of Companies - India
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