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Germany’s Uniper Warns Of Possible “Irregular Operation” At Major Power Plant As Rhine River Runs Dry

Germany’s Uniper Warns Of Possible “Irregular Operation” At Major Power Plant As Rhine River Runs Dry

Germany’s Uniper SE, the country’s largest utility (recently bailed out by state-owned lender KfW), warned Thursday that plunging water levels on the Rhine River have reduced barge shipments of coal to a key power plant, exacerbating an energy crunch as power prices soar to record highs, reported Bloomberg.

The river at Kaub, Germany, is around 21.6 inches (55 centimeters) on Thursday and is expected to drop to 18.5 inches (47 centimeters) by Saturday, according to the German Federal Waterways and Shipping Administration. Currently, Europe’s most crucial waterway is 5.9 inches (15 centimeters) from being impassible, the threshold where barge traffic is 15.7 inches (40 centimeters).

Uniper said the low water levels could force “irregular operation” at its 510-megawatt Staudinger-5 coal-fired power plant through the first half of September because fewer and fewer barges have been able to deliver coal as stockpiles dwindle. Rhine water levels below 40 centimeters at Kaub would halt shipments via inland waterways to the power plant, forcing shipments by land.

On Wednesday, Riverlake, a vessel broker, said, “fewer and fewer barges can pass through Kaub.”

Uniper’s warning about low water levels impacting operations at a coal-fired power plant is more evidence Rhine troubles are exacerbating Germany’s worst energy-supply crunch in decades as Russia reduces natural gas flows via Nord Stream 1 to just 20% capacity.

Meanwhile, German power for next year soared to a record intraday high of 410.57 euros per megawatt-hour on the European Energy Exchange on Thursday on the prospects of a worsening energy crisis.

Besides Uniper, here’s what other German companies are saying about low water levels on the Rhine and how they seek alternatives for transporting goods (list courtesy of Bloomberg):

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Australia invokes emergency powers to block coal exports in energy crisis

Australia invokes emergency powers to block coal exports in energy crisis

Authorities permitted to keep supplies, if needed, after consumers told to turn off the lights

Australian authorities have given themselves the power to block coal exports if the resource is needed to ease the country’s crippling power crisis in the latest measure taken to avert the risk of blackouts.

Rising coal and gas prices, coupled with outages at ageing coal-fired power stations, have plunged the market into turmoil this week, forcing the Australian Energy Market Operator to take control of the wholesale market to ensure reliable supply of electricity to eastern states.

The government of New South Wales invoked emergency powers on Friday to oblige miners operating in the state to redirect coal heading overseas to local generators. The precautionary move was taken to strengthen energy security on the advice of AEMO.

“We’re just giving ourselves all the levers we need to give the community certainty that we’re doing everything we can to keep the system going,” said Matt Kean, the energy minister and treasurer for New South Wales, the country’s most populous state.

The energy crisis has highlighted the failure of Australia, one of the world’s largest producers of fossil fuels, to prepare for the transition to renewable energy sources by investing in modernising the country’s electricity infrastructure, analysts say.

“We are in an invidious position. It is a global story as there is a gas shortage and prices are skyrocketing but for Australia it is combined with coal-fired power stations going offline,” said Ben Oquist, executive director of the Australia Institute think-tank. The crisis has highlighted how a failure to prepare for renewable energy becoming a larger part of domestic supply was hitting the country’s consumers in the form of higher bills and potential blackouts, he added.

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Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia

Why did gas prices go from $10 a gigajoule to $800 a gigajoule? An expert on the energy crisis engulfing Australia

Australia’s east coast has been plunged into an energy crisis just as winter takes hold, which will see many people struggle to heat their homes due to soaring gas bills.

Meanwhile, Origin Energy this week confirmed it could not source enough black coal to power Australia’s largest coal plant at full capacity, deepening shocks to the energy market.

The electricity price surge is so dire, small energy retailers such as ReAmped Energy are advising customers to switch energy providers or be hit with much higher bills.

So what on Earth is going on? It has a lot to do with Russia’s war on Ukraine, which has disrupted the global energy market. Sanctions on Russian coal and gas exports mean there’s simply not enough supply to meet demand. As a consequence, the global price of gas and coal has soared.

Why are energy prices are getting so high?

Australia is a net exporter of gas and coal. This means we export most of our fossil fuels overseas. As the global price of coal increases, the cost of generating domestic electricity from coal is increasing.

What’s more, many of Australia’s coal generators are ageing, which means they fail more often. At present, nearly 30% of our coal generation is offline.

The price spike comes as coal plant owners look for the exit. Australia’s largest coal plant, Eraring, has been operating for 35 years. In February, Origin announced it would shut Eraring seven years ahead of schedule in 2025 because renewable energy was impacting profitability.

Origin’s new challenge is securing enough coal to run Eraring at its full 2.8 gigawatt capacity. The problem is set to persist into 2023.

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EU Pushes To Break “Energy Taboo” With Proposed Ban On Russian Coal Imports

EU Pushes To Break “Energy Taboo” With Proposed Ban On Russian Coal Imports

Update (0825ET): As EU ambassadors meet on Tuesday to discuss another proposal on Russian sanctions, German Foreign Minister Annalena Baerbock insisted that the EU would “completely end” its fossil fuel dependence on Russia, starting with coal.

Of course, as we noted below, Germany is among the most dependent EU economies on Russian energy. Weaning its economy off Russian energy without triggering a major domestic crisis and “total collapse.”

US equity futures tumbled on the news as investors braced for more international fallout from increasing tensions between Europe and the Russians, which could lead to even higher energy prices.

* * *

Not to be outdone by tiny Lithuania (which claims to have officially weaned itself off Russian gas imports by building an LNG terminal), the European Commission has devised a controversial proposal to ban imports of Russian coal, along with a host of other measures comprising a new sanctions package to be introduced on Tuesday, according to reports from WSJ, Reuters and a host of other media outlets.

Along with banning imports of Russian coal, the package also calls for an import ban on rubber, chemicals and other products from Russia worth up to €9 billion a year.

If passed, the proposal would mark the first energy sanctions on Russia since the start of the conflict in Ukraine. Although it wouldn’t touch oil and gas, such a ban would break the so-called “energy taboo”, according to Bloomberg’s Javier Blas.

While thermal coal isn’t nearly as critical as oil and gas, it’s still a “big deal,” Blas pointed out.

Coal-fired power plants are still being used across the EU, though most member states expect to completely phase them out by 2030. Russia has the second-largest coal reserves in the world. In 2020, it mined 328 million metric tons, making it the sixth-largest producer globally…

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Why liquefied coal (CTL) and natural gas (GTL) can’t replace oil

Why liquefied coal (CTL) and natural gas (GTL) can’t replace oil

Preface. Here are just a few of the reasons why we aren’t likely to convert enough coal to diesel to matter as oil decines (see Chapter 11 Liquefied Coal: There Goes the Neighborhood, the Water, and the Air for more details on this in When Trucks Stop Running: Energy and the Future of Transportation)

It is not likely much coal will be converted to diesel, because if all global coal production were converted to liquid coal, perhaps 17 million barrels a day (Mb/d) could be produced. That amounts to 22 % of current world oil production. If more efficient liquefaction technologies came along, and coal now used to generate electricity and make cement, steel, aluminum, paper, and chemicals were all diverted to make liquid fuels, as much as 54 Mb/d could be made. But roughly 17 Mb/d is more likely because diverting most or all of the coal from other uses to make CTL is not realistic.  After all, we do need cement and steel to build the CTL coal liquefaction plants, roads, and the trucks and pipelines to transport the CTL itself.

In the U.S. coal production could be doubled to make CTL, but that might cut reserve life in half. In the U.S., there may be 63 years of reserves at current rates of production, but only 31.5 years if we doubled coal production.

The thermal efficiency of liquefaction is roughly 50–60 %; hence, only half the coal energy used in liquefaction will come out as the energy available in the CTL fuel. And there may be other losses. An inconvenient truth about coal is that it is a dirty fuel. If carbon capture and sequestration were to be required, 40 % of the remaining energy in a liquid coal power plant would be consumed.

…click on the above link to read the rest of the article…

China Coal Production Hits Record To Avoid Energy Crisis

China Coal Production Hits Record To Avoid Energy Crisis

Many of us in the Western world are spending the most ever on electricity bills, forced to eat fake meat, and paying a lot more in taxes for green initiatives. At the same time, China ignores the green revolution by ramping up record coal production in December.

China, the world’s biggest polluter and consumer of coal, produced a record 384.67-million tons of the dirtiest fossil fuel last month, up 7.2% YoY compared with the same month a year ago. The month prior, production was up nearly 14 million tons. For the full year, output reached 4.07 billion tons, up 4.7% over the previous year.

While Chinese President Xi Jinping skipped out on the Group of 20 summit and United Nations climate conference in late 2021, many Western powers agreed to reduce carbon dioxide emissions by the end of this decade and reach carbon neutrality by 2050. It wasn’t a mistake that China didn’t show up to the conference because they were too busy panic hoarding coal and other fossil fuels ahead of the Northern Hemisphere winter to avoid an energy crisis. Beijing ordered state-owned energy companies to secure fossil fuel supplies at any costs in early October.

The move to panic hoard sent thermal coal futures contracts on the Zhengzhou Commodity Exchange to a record high of 2,309 yuan per ton on Oct. 18. By the end of the month, regulators imposed price caps on miners and ordered more production. Prices plunged 69% from 2,309 to 712 today due to the market intervention by the government as coal inventories for utilities surpassed 162 million tons, or about 21 days usage, about 40 million more tons than the same period last year.

One can forget Beijing’s diplomatic pledges to reduce carbon dioxide emissions and carbon neutrality in the coming decades — it simply won’t happen any time this soon as their calls to go green is just hot air.

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World’s Largest Coal Exporter Warns Of Energy Crunch, Imposes Export Ban 

World’s Largest Coal Exporter Warns Of Energy Crunch, Imposes Export Ban 

Chinese coal futures rose on Tuesday on Indonesia’s export ban over the weekend. Indonesia is the largest exporter of dirty fossil fuel, stoking fears of supply woes as the Northern Hemisphere winter is underway.

Bloomberg Intelligence notes ever since China suspended coal imports from Australia in 2020, Indonesia has become an important source, making up 70% of China’s total thermal coal imports.

Indonesia’s export ban sent the most active coal contract on the Zhengzhou Commodity Exchange soaring as much as 6% on Tuesday.

On Monday, Indonesia’s state utility provider warned the country was facing a “critical period” of supply woes. The export ban will enable power plants to restock domestic coal supplies to avoid rolling blackouts.

“The move could potentially have knock-on effects in China and India, which are the usual destinations for Indonesian coal,” said Warren Patterson, head of commodities strategy at ING.

China has increased domestic production in recent months ahead of winter. Chinese coal miners should benefit from Indonesia’s disruption as prices and sales increase.

Indonesia’s export ban will only last through January but could slash global seaborne supply by 45%. Indonesia is the largest exporter of coal in the world.

Coal prices in other regions have received a boost. Taking a look at the US, Peabody Energy Corporation, the largest private-sector coal company globally, shares jumped 12% on Monday.

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Global Coal Power Demand On Track For Record As Green Energy Transition Crumbles

Global Coal Power Demand On Track For Record As Green Energy Transition Crumbles

There’s no question that the ‘greenification’ of the global economy has returned many industrial countries to coal in 2021. New data from the International Energy Agency (IEA) shows that the amount of electricity generated worldwide from coal is on track to hit a record high.

IEA’s Coal 2021 report says global power generation from coal soared 9% in 2021 to an all-time high of 10,350 terawatt-hours. The rebound comes amid a rash of green policies and stupid political choices, such as decommissioning oil and gas-fired power plants and fossil fuel exploitation projects, ironically resulting in an energy crisis worldwide.

“The rebound is being driven by this year’s rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up,” IEA said. Also, the dramatic rise in natural gas prices forced power plants to source coal as a cheaper alternative.

Overall coal demand, including energy-intensive industries such as cement and steel, is expected to increase 6% this year. Though it shouldn’t surpass the record consumption levels of 2013/2014, IEA said. It added coal demand could hit a new record high in 2022. 

IEA Executive Director Fatih Birol said the increase was “a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero.”

The IEA said that China is responsible for half of the coal-fired power generation worldwide and will increase by 9% year-on-year increase.

“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA.

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Coal Demand Booms Under Biden As Prices Hit 2009 Levels

Coal Demand Booms Under Biden As Prices Hit 2009 Levels

US coal is experiencing a massive boom under President Biden despite the administration trying to kill fossil fuels by touting net-zero goals at the COP26 climate conference in Glasgow.

On Monday, S&P Global Market Intelligence released data that showed prices for coal from Central Appalachia jumped more than $10 last week to $89.75 per ton, the highest level since 2009.

Awkwardly for Biden, who has promoted a carbon-free grid by 2035, the US wasn’t on the list of more than 40 countries at the UN meeting to phase out coal. “It’s very disappointing because the science is quite clear that we have to turn sharply away from coal this decade if we are going to meet our climate goals,” said Rachel Cleetus, policy director at the Union of Concerned Scientists.

“We need very clear signals that orientate the US towards clean energy,” Cleetus added. “The climate crisis is too dire to just wait for coal to fall out. It’s just another signal of the sway the fossil fuel industry still has over US politics.”

Coal’s return is due to power plants transitioning from natural gas to coal because rising prices have made it uneconomical to produce electricity. Idled rigs and slashed drilling has dampened US crude production that is putting a bid under crude prices.

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These Countries Are The Most Reliant On Coal

These Countries Are The Most Reliant On Coal

Coal shortages are currently causing electricity supply problems in two major coal-using economies, India and China.

As Statista’s Katharina Buchholz notes, shortages are happening because economic activity is picking up as coronavirus numbers have remained stable in most countries, while at the same time coal production is sinking due to weather problems, and environmental concerns driving investment decisions.

According to Ember, India still produces 70 percent of its electricity from coal, the sixth-highest share in the world. China, which has been touting its forays into renewable energy, is also still heavily banking on coal, at almost 61 percent of electricity created by the fossil fuel. Both countries are currently investing in several energy technologies – nuclear, coal and renewables – as their economies are expanding rapidly.

Infographic: The Countries Most Reliant on Coal | Statista

You will find more infographics at Statista

According to the data, Botswana was the country most reliant on coal in the world. The Southern African country uses coal for electricity generation almost exclusively, while small Balkan republic Kosovo registers 95 percent coal use for its electricity production.

Countries in Eastern and South-Eastern Europe feature heavily among the top 10 of countries dependent on coal, while Mongolia and South Africa are other notables of global coal dependency.

Green Policies Return the World to Coal

Green Policies Return the World to Coal

There’s scarcely a place in the modern world that will not be feeling the high cost and discomfort of a shortage of energy supplies and their increasingly soaring prices. Lebanon already is. Due to a shortage of oil, the two power plants that supply 40% of that country’s electricity shut down. There is no electricity in Lebanon and will not be any for some days.

It’s an extreme case, but even the United Kingdom, the EU, the U.S., and China are running up against diminishing ability to obtain the necessary energy supplies to keep things running smoothly. Some of the shortages are due to accidents, like the cutting of an undersea cable to the UK, but most are due to green policies and stupid political choices, ironically shutting down oil and gas-fired power plants and fossil fuel exploitation and transport at the demand of the greens, who grossly overestimate both global warming and the ability of air, sun and water to take their place. Ironically, this means coal — the dirtiest possible fuel — is back in huge demand,

Despite an import ban on Australian coal, China relented and has begun unloading Australian coal because of an extreme power crunch. Coal is now in demand in Europe as gas prices soar and the EU’s energy policies are in large responsible:

The ideological split will drive a wedge between the European Union, a long-time champion of a coal phaseout, and corporate interests as market conditions favour gas-to-coal switching. The switching ratio has slid in coal’s favour in the last weeks of June 2021 and judging by the current futures structure, it will stay in place until at least Q2-2022 [snip] Given the natural limitations to further coal utilization, in Germany the main interaction in the upcoming weeks will be between coal and wind…

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Coal Generation In UK Jumps As Wind Speed Drops

Coal Generation In UK Jumps As Wind Speed Drops

Coal met some 3 percent of the UK’s electricity demand on Friday morning, reaching its highest level of Britain’s power generation in one month, amid lower wind speeds this week and an outage at a gas-powered plant, Bloomberg reports.

The last time the UK generated 3 percent of its electricity from coal was in early September when low wind generation reduced renewable power supply and triggered the massive spikes in UK wholesale electricity prices.

Utility Uniper fired up its coal-powered plant in Ratcliffe early on Friday, while the gas-fired plant in Pembroke, Wales, operated by RWE, suffered an unplanned outage.

Over the past week, gas has consistently accounted for the largest share of the UK’s electricity generation, according to data from National Grid ESO. For example, on Wednesday, gas produced 44.8 percent of Britain’s electricity, more than wind with 19.2 percent and nuclear with 12.6 percent.

Surging natural gas prices and warm and still weather in September forced the UK to fire up an old coal plant that was on standby in order to meet its electricity demand.

The UK has pledged to phase out coal-fired power generation by October 2024.

UK power company Drax could have its last two coal-fired plants in the country operating beyond the 2022 deadline it had set for closure if the UK government asks it to keep them operational amid the energy crisis in the country and the whole of Europe.

“If the government wants us to rethink our plans, we need to talk to them in the next few months,” Drax’s chief executive Will Gardiner told the Financial Times at the end of September.

Last week, the UK government committed to decarbonizing the country’s electricity system by 2035.

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China Coal Prices Soar To Record As Winter Freeze Spreads Cross The Country

China Coal Prices Soar To Record As Winter Freeze Spreads Cross The Country

One week ago we discussed why the “worst case” scenario for China’s property crisis is gradually emerging; to this we can now add that China’s worst case energy crisis scenario is also about to be unleashed as cold weather swept into much of the country and power plants scrambled to stock up on coal, sending prices of the fuel to record highs.

Electricity demand to heat homes and offices is expected to soar this week as strong cold winds move down from northern China, according to Reuters with forecasters predicting average temperatures in some central and eastern regions could fall by as much as 16 degrees Celsius in the next 2-3 days.

Shortages of coal, high fuel prices and booming post-pandemic industrial demand have sparked widespread power shortages in the world’s second-largest economy. Rationing has already been in place in at least 17 of mainland China’s more than 30 regions since September, forcing some factories to suspend production and further disrupting already broken supply chains.

On Friday, the most-active January Zhengzhou thermal coal futures closed at a record high of 2,226 per tonne early. The contract has risen almost 200% year to date.

China’s three northeastern provinces of Jilin, Heilongjiang and Liaoning – also among the worst hit by the power shortages last month – as well as several regions in northern China including Inner Mongolia and Gansu have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.

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China Coal Futures Hit Record High As Mines Flood; Worsening Power Shortages Hit Rust Belt 

China Coal Futures Hit Record High As Mines Flood; Worsening Power Shortages Hit Rust Belt 

China’s top coal-producing region has been devastated by torrential rains and flooding this past week. About 9% of the coal mines in Shanxi province, an area responsible for producing 30% of China’s supply, have closed operations. The direct effect of this has been a spike in coal futures.

Heavy rainfall flooded Shanxi over the weekend. More than 120,000 people have been evacuated, and 60 of the 682 coal mines in the province have been closed. Industrial yards and manufacturing complexes have also been shuttered due to flooding.

The province is usually a dry area but record-breaking rain last week complicated things for the mining industry. This also comes at a time when Beijing has called on mining companies to boost output amid a nationwide power crunch.

Source: Bloomberg 

As a result, Coal futures on the Zhengzhou Commodity Exchange jumped 12% to $218.76 per ton, a new record high, on Monday.

A devastating and widespread power crunch has hit China in recent months, resulting in as many as 20 provinces or about 66% of the country’s GDP have announced some form of power cuts. Due to the growing energy crisis, Goldman Sachs told clients last month that the energy crisis will severely impact the country’s economic growth.

Source: Bloomberg

For the fourth quarter, Citic Securities analysts told clients, China faces a gap of 30 million to 40 million tons of coal. This translates into reducing industrial power use by 10% to 15% in November and December. UBS Group AG said this would result in a 30% slowdown in activity in energy-intensive industries like steel, chemicals, and cement-making.

Beijing has also approved electricity prices to increase by 20% against the benchmark, compared with a current cap of 10%, allowing more power plants to economically produce power considering high costs for fossil fuels, such as coal, natural gas, and crude.

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Energy Crisis May Unleash Winter Blackouts Across US, Insider Warns 

Energy Crisis May Unleash Winter Blackouts Across US, Insider Warns 

The energy crisis that is rippling through Asia and Europe could unleash electricity shortages and blackouts in the U.S., according to Bloomberg.

Ernie Thrasher, CEO of Xcoal Energy & Resources LLC., told energy research firm IHS Markit that U.S. utilities quickly turn to more coal because of soaring natural gas prices.

We’ve actually had discussions with power utilities who are concerned that they simply will have to implement blackouts this winter,” Thrasher warned.

He said, “They don’t see where the fuel is coming from to meet demand,” adding that 23% of utilities are switching away from gas this fall/winter to burn more coal. 

With natgas, coal, and oil prices all soaring is a clear signal the green energy transition will take decades, not years. Walking back fossil fuels for unreliable clean energy has been a disaster in Asia and Europe. These power-hungry continents are scrambling for fossil fuel supplies as stockpiles are well below seasonal trends ahead of cooler weather.

A similar story is playing out in the U.S., where increased demand for coal might not be reached by mining companies. We noted Thursday morning that boosting output might be challenging due to years of decommissioning mines to reduce carbon emissions and transition the economy from fossil fuels to green energy. There’s also been a steady decline of miners over the last three and a half decades.

 “That whole supply chain is stretched beyond its limits,” Thrasher said. “It’s going to be a challenging winter for us here in the United States.”

Utility company Duke Energy Corp.’s Piedmont Natural Gas unit, covering North and South Carolina customers, warned power bills this winter are set to rise due to high natgas prices and low production.

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