There isn't any one price of coal. Asia is turning to coal in a big way:
| | Renaissance For Coal In Asia
APRIL 3, 2017
By Paul Homewood
It looks as if the obituaries for coal may have been a bit premature, as this slew of stories emphasises:
In the dusty scrub of the Thar desert, Pakistan has begun to dig up one of the world’s largest deposits of low-grade, brown, dirty coal to fuel new power stations that could revolutionize the country’s economy. The project is one of the most expensive among an array of ambitious energy developments that China is helping the country to build as part of a $55 billion economic partnership. Pakistan relies on coal for just 0.1 percent of its power, according to the Pakistan Business Council. The Thar projects and others could see that jump to 24 percent by 2020, according to Tahir Abbas, analyst at Karachi-based brokerage Arif Habib Ltd. Pakistan’s coal reserves would give the nation a cheap domestic alternative to expensive oil and gas imports.
sltrib.com
Just a few short years ago, few would have dared to predict that coal could have a future in the energy policies of emerging and developed countries alike. Yet the fossil fuel is undergoing an unexpected renaissance in Asia, buoyed by technical breakthroughs and looming questions about squaring development with energy security.
For Japan, coal has emerged as the best alternative to replacing its 54 nuclear reactors, which are deeply unpopular with the population and seen as symbols of devastation after the Fukushima Daiichi nuclear disaster six years ago. Mindful of the public mood, the government of Shinzo Abe has completely given up on the country’s dream of nuclear self-sufficiency, and pulled the plug in December on the $8.5 billion experimental reactor project at Monju. On February 1, the government pledged to decommission all reactors and replace them with 45 new coal-fired power plants equipped with the latest clean coal technology. In this, Tokyo seeks to achieve two overreaching goals: preserve its energy security and stay on course to fulfill the obligations set forth by the 2016 Paris Climate Agreement.
But why did Abe go with coal and not renewables or, say, natural gas? After Fukushima, Japan initially ramped up its imports of liquefied natural gas, but realized that LNG would be prohibitively expensive in the long-term. Cost-conscious, the government has instead opted for high-efficiency low-emissions (HELE) coal plants and plans to market its clean coaltechnologies abroad in addition to implementing them at home. Coal power already made up 31 percent of Japan’s energy mix in 2015 but under the current plan, the fossil fuel will become the country’s primary power source by 2019.
thediplomat.com
An Important shift is now underway in global coal trade. With a completely new export route opening up for U.S. producers over the last few weeks.
To South Korea.
Platts reported yesterday that coal buyers in Korea have seen a surge of bookings for U.S. thermal coal. With sources telling the news service that 1.5 million tonnes of total U.S. supply have now been arranged for delivery between July and September.
This isn’t just a one-off transaction either. With all five of Korea’s utilities having reportedly booked U.S. exports for Q3.
That big shift for Korea’s coal buyers is happening largely due to changing regulatory rules. With a new tax regime on coal imports into Korea scheduled to take effect as of April 1.
The new tax rules favor imports of lower-calorie coal — with the 5,000 kcal/kg mark being an important financial threshold for buyers. Under the revised tax scheme, coal shipments less than 5,000 kcal/kg will be assessed import duty of 27,000 won per tonne ($24.30/t).
By contrast, shipments between 5,000 and 5,500 kcal/kg will be taxed at 30,000 won/t ($27/t), while coal above 5,500 kcal/kg will see a rate of 33,000 won/t ($29.70/t).
All of which means that Korean buyers want coal below 5,000 kcal. But not too much so, as really low-value supply won’t be as functional in power generation.
U.S. coal fits that bill perfectly. With American producers putting out a 4,850 kcal/kg product that attracts the lowest tax rate but still provides a lot of energy per tonne.
That ideal market position looks set to create a mini-boom for U.S. exports into Korea. With the 1.5 million tonnes booked so far this year already representing a 43 percent increase on U.S.-sourced shipments for all of 2016 — when Korean buyers brought in just 1.05 million tonnes for the entire year.
That could give a lift to some U.S. miners. Particularly those in Wyoming and Montana, which have ready access to Pacific Coast export terminals such as Canada’s Westshore facility. Watch for more import deals being struck, and for figures on rising Korean demand for American product.
Here’s to a window opening.
oilprice.com
notalotofpeopleknowthat.wordpress.com |
Is the world warming to clean coal?
SEPTEMBER 20, 2017
By Paul Homewood
A thoughtful article from CAPX:
At an event in New Delhi last month, the Indian government’s chief economic adviser had strong words for critics of India’s energy sector. In a fiery defense of Indian coal energy, Arvind Subramanian – a former IMF economist who worked at Washington’s most influential development think tanks – made it clear his country needed practical solutions instead of “carbon imperialism” that insists on an immediate, unrealistic switch to renewable energies.
Who are the imperialists, in Subramanian’s eyes? As it turns out, his former colleagues at multinational institutions, such as the World Bank. The Bank, under pressure from Barack Obama, decided it would no longer support coal energy initiatives in 2013. Since then, its projects have taken an ambiguous approach to the world’s electrical grid.
While acknowledging the overriding necessity of electricity for businesses and households alike, especially in energy-deprived South Asia and sub-Saharan Africa, the Bank has been adamant that power should not come at the detriment of environmental objectives.
Considering the United States is the largest shareholder in the World Bank and exerts outsized influence over its funding decisions, it hardly came as a surprise to see the Bank’s president go along with the Obama administration’s agenda. Since then, the World Bank and its fellow financiers in the European Union have – at least on paper – cut off support to coal projects and denied financing coal-fired power plants in emerging markets.
The pullback by multilateral banks came as more private-sector interests reconsidered their exposure to coal-related assets, turning the international institutions into lenders (or at least Western lenders) of last resort.
In practice, things have played out differently. Even as they preached a coal-free future, billions of dollars from both the World Bank and the Obama administration went to traditional energy initiatives. For the Bank, it is a vexing conundrum: nearly one-sixth of the global population – 1.2 billion people – lives without reliable electricity. This lack of power hinders opportunities and keeps them in poverty, a stark limitation for these emerging markets.
Like Subramanian, other policymakers in the developing world have not sat by idly as the World Bank and Western governments dictate energy policy to them. Over the past several years, leaders in Nigeria, Tanzania, and the Philippines have insisted on pragmatism in maintaining energy security.
Their argument is simple: coal is and will continue to be used throughout the Global South for decades to come. Instead of blanket bans, the promotion of carbon capture and other clean coal technologies could help expand public access to energy while reducing emissions and avoiding having to retool already-struggling infrastructure.
Those voices are the impetus behind what Subramanian calls a “green and clean coal coalition” spanning both the developed and developing worlds. Emerging markets in Asiaand Africa will continue to build new coal-fired power stations for at least the next two decades. In that timeframe, coal-fired solutions are indispensable to meeting their demands for electrification and growth. As clean coal solutions emerge, new plants in the developing world can and should be far cleaner than previous generations of coal-fired plants in Europe and America.
India alone will see its energy demand nearly double between 2020 and 2040, rising 87 per cent. Subramanian’s comments reflect New Delhi’s commitment to carbon capture technologies and improving the efficiency of existing plants. As minister for power Piyush Goyal put it: “Every country needs a baseload. I cannot tell my country, ‘guys, it’s 6pm in the evening, shut everything down because the solar has gone off’.”
The dynamics of African electrification present similar challenges. If India’s energy demand will nearly double in the next two decades, Africa’s will nearly triple. That explains why there are over 100 coal-powered facilities in development across 11 African countries (not including coal-fuelled South Africa) with a total capacity of 42.5 GW. A lack of funding from the World Bank has hardly been an obstacle to these projects: instead of looking to Washington, countries like Kenya are receiving both funding and technical assistance from Beijing.
Multinational institutions would be best served by orienting new coal-powered plants to the cleanest possible models, instead of dogmatically refusing to fund facilities that will be built without them. Some key international sources of finance are already following this path: just two months ago, the Government of Japan launched a partnership with the African Development Bank (AfDB) to provide $6 billion USD of investment in the energy sector, including what Gabriel Negatu of the AfDB calls “the best available low-emissions clean coaltechnologies”.
Of course, none of these investors exercises as much influence as President Donald Trump and his administration. In one of several ways his election marked a stunning shift from the Obama administration, Trump has emerged as a champion of American coal and an ally for leaders in the developing world who look to coal for electrification.
Just as President Obama’s stance on coal informed the World Bank in 2013, Trump is now bringing his administration’s weight to bear in favour of global coal energy, both on multinational financial institutions and on key emerging markets. Trump has taken his pro-coal message directly to counterparts like Narendra Modi and Petro Poroshenko.
Trump has his own motives for doing this. The US coal sector was plummeting when the new president was sworn in (production reaching its lowest level since 1978), and branching out to emerging markets is an opportunity for the administration to fulfil a campaign promise and maintain blue collar support. US coal has been regaining ground ever since Trump was elected, and that growth has been coming from overseas exports.
Could Trump, then, be the key cog in Subramanian’s “clean coal coalition”? With the US decisively switching camps, the tide seems to have already shifted since the Paris agreement of two years ago. Multilateral institutions, such as the World Bank and governments such as France continue to insist that the war on traditional fuels is still on, but a de facto axis between the United States, China and the developing world is starting to disagree with them.
Sebastien Laye is fellow associate at the Thomas More Institute
capx.co
I think we can take talk of carbon storage as no more than tokenism. I don’t believe India or any other countries have any interest in spending billions on a process that is not currently economically viable, would significantly raise the price of electricity, and for which there is absolutely no need.
Although the two are often conflated, “clean coal technology” and “carbon storage” are two totally separate things. The first is vital to reduce air pollution and drastically increase the efficiency of the process.
notalotofpeopleknowthat.wordpress.com
Don B PERMALINK
September 20, 2017 1:11 pm
“Over all, 1,600 coal plants are planned or under construction in 62 countries, according to Urgewald’s tally, which uses data from the Global Coal Plant Tracker portal. The new plants would expand the world’s coal-fired power capacity by 43 percent.”
ASAD ZAIDI/BLOOMBERG
As Beijing Joins Climate Fight, Chinese Companies Build Coal PlantsBy HIROKO TABUCHI
July 1, 2017
China has asserted itself as a global climate leader even as Chinese companies are planning to build half of all new coal plants at home and overseas.
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