European utilities call for floor price for carbon permits: The major European utilities EON and Vattenfall have called for the establishment of a floor price for carbon dioxide emission permits in the European Union’s (EU) emission trading system (ETS). The 12 year-old EU ETS system has been largely undermined by a glut of free permits given to utilities with old, high-emission coal plants which has resulted in prices too low to encourage significant fuel switching. The current price is about US$5.3 per tonne while it has been estimated a US$32 per tonne floor price would drive the energy generation shift at minimal cost. (Bloomberg) Big price-tag with Texas CCS plant: While the coal industry has been promoting Carbon Capture and Storage (CCS) projects as cheaper than renewables, NRG Energy’s recently commissioned Petra Nova plant in Texas - retrofitted to capture 40 per cent of the flue gas from a 610 MW plant - cost a staggering US$1.04 billion to complete.Ramanan Krishnamoorti from the University of Houston doubts the Petra Nova project has much applicability for other coal plants, especially given the falling cost of wind and solar. (Australian Financial Review [paywall], Forbes) Anglo American retreats from coal divestment plan: Anglo American has retreated from its plan to divest its entire coal portfolio, telling shareholders it will retain its Moranbah and Grosvenor metallurgical coal mines in Queensland. Announcing its 2016 results the company stated it is still reviewing “all the potential options” for its South African export thermal coal mines. While the company’s one-third stake in the Cerrejon thermal coal mine in Colombia was not explicitly mentioned, insiders told Bloomberg it was no longer up for sale. (Bloomberg, Anglo American) Indian coal imports plummet: India’s January total coal imports plummeted by 21.7 per cent compared to the year before as the Modi Government pushes state governments and electricity distribution companies to end thermal coal imports by the end of March. The bulk of the decline was for thermal coal. The Minister for Coal, Piyush Goyal, has also flagged the government is aiming to end the use of metallurgical coal in power stations and instead have it washed and diverted to the steel sector to reduce the need for imports. (Deccan Chronicle, Hindu Business Line) China’s coal industry lobbies for new policy: The China Coal Association – representing major coal producers including Shenhua and China Coal Energy – is pushing the government to reinstate limits on thermal coal production. With increasing domestic production and demand due to decline with the end of the winter heating season, major coal producers fear a fall in domestic prices. Pressure from the coal industry for restrictions also coincided with the State Administration of Work Safety announcing a program of inspecting coal mines during 2017 and vowing to shut mines “that have produced more coal than the government has allowed”. (Reuters, Reuters) Pakistan rejigs Chinese-backed projects: China and Pakistan have agreed to revise the ‘priority list’ of 10,040 MW of mostly coal power projects approved when the two countries signed the Energy Framework Agreement in November 2014. Officials have proposed the 1320 MW Rahim Yar Khan Power project be downgraded to the ‘actively promoted list’ as it is not financially viable and lacks access to transmission lines - but have proposed two other coal projects be upgraded to the ‘priority list’. To accelerate completion of projects this year the Pakistan Government agreed the power purchase agreements for the Chinese-backed projects could provide generators with up to 34.5 per cent return on equity. (Express Tribune) |
