Coal Australia Coal-3

Published on January 19th, 2016 | by Joshua S Hill

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China Electricity Demand Slows, Coal Consumption Drops, Hits Australia Hard

January 19th, 2016 by  

China has reported its electricity demand growth slowed to only 0.5% in 2015, coal consumption dropped 5%, and coal imports dropped 35%.

China is moving to protect its own domestic coal production by cutting overseas imports which, in conjunction with a collapse in India’s coal imports, has left “the seaborne thermal coal industry … entirely beleaguered,” according to Tim Buckley, from the Institute for Energy Economics and Financial Analysis (IEEFA).

Growth in China’s electricity demand grew by only 0.5% year-on-year in 2015, reaching 5,550 TWh, the slowest rate of growth since 1998. This declining growth rate, in conjunction with an increase in non-thermal electricity generation technologies — such as nuclear, hydro, wind, and solar — resulted in coal-fired power generation declining by an estimated 4%, and coal consumption by 5%, which represents an acceleration of the existing 2.9% decline seen in coal consumption in 2014.

“Great strides continue to be made in China in terms of growing clean energy investment and improving energy efficiency,” said Ben Caldecott, Programme Director, Smith School of Enterprise and the Environment, University of Oxford. “This has significant implications for coal-fired power stations in China – in terms of utilisation rates and profitability – as well as for thermal coal miners that have made big bets based on seriously flawed projections of China’s future demand for imported coal.”

This continues a long hoped-for decoupling of economic growth and electricity demand in China — something that some commentators once believed was impossible. “The decoupling of economic growth and electricity demand is a key driver of the Chinese energy transformation and is being witnessed first hand,” said Buckley.

China is also likely to see its coal consumption decline in the coming years, as renewable energy investment increases the renewable energy capacity. Earlier this month, Bloomberg New Energy Finance revealed that China’s investment in clean energy increased in 2015 by 17%, reaching $110.5 billion, “as its government spurred on wind and solar development to meet electricity demand, limit reliance on polluting coal-fired power stations and create international champions.”

While this is good news for China, and for those who are looking to China to make significant moves on the amount of fossil-fuel generated electricity used, the same can not be said for those who were hoping for a recovery of the seaborne thermal coal market. According to Buckley, among those affected is Australia, which for the longest time has been a primary exporter of coal to China (and India). This will immediately impact Adani’s plans to build a massive coal-mining complex in Australia’s Galilee Basin.

“This telling import data confirms the last flicker of hope has been snuffed out, not least for Australia’s Galilee Basin,” said Buckley. “It also carries massive negative implications for Indonesia’s coal export market, given the concurrent collapse in Indian demand.”

“If Australia is to navigate the rapid changes under way in the global energy sector we will need to build a net zero emissions economy,” added Erwin Jackson Deputy CEO of The Climate Institute. “The Paris agreement, which for the first time committed all the countries in the world to ever-strengthening efforts to cut carbon pollution, built on actions already under way in the world’s biggest economies like China. China is successfully decoupling economic growth from a reliance on polluting industries. If our economy is to avoid being smashed against the rocks of stronger booming global investments in clean energy we must reorient the nation for zero-emission prosperity.”

 
 
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About the Author

I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Peter Egan

    This post is wrong about the economic impact on Australia. Sure some coal miners have lost their jobs, and the coal, iron ore and oil investors have seen large share price falls, but the rest of the economy is going well. Chinese real estate investors have buoyed real estate prices, people feel wealthy despite the 30+% currency fall, unemployment is just 5.8% when 5% is regarded as full employment.

    Adani is vertically integrated. But it would be silly not to buy cheap Indonesian coal rather than develop our biggest mine.

    The government of the State of New South Wales is trying to sell the power distribution network for the maximum price. I expect it will introduce measures to protect large generators at the expense of distributed energy and solar. Presently 50% of our electricity bills go to the government for the distribution network. Protection for former government monopolies is the greatest threat to our economy.

    • ROBwithaB

      Yes. This.
      Trying to privatise the monopoly, at the best price, by preserving its monopoly status in legislation. Actually, I’m not even sure that they would want to get the best price for the public asset. These deals often entail a significant element of cronyism.
      Society at large would be much better off if the government simply enabled a well-design and clearly signposted path to a deregulated electricity market.

      I suspect that many economies are going to be hampered for decades by the shenanigans of the departing conservative governments they have finally managed to evict.

  • Harry Johnson

    Fortunately, it will get even worse for coal. I read an article that pointed out current Chinese policy favors coal-powered electricity which is why so many wind turbines have to be shut down. China has far more wind capacity than the US but generates less power. Lack of transmission is part of the problem, but apparently policies will change this year giving renewable energy priority over coal when transmitting power.
    And there are a bunch US coal plants that will soon start closing down. If only we could stop the natural gas emission leaks…

  • heinbloed

    Update:

    ” China has reported its electricity demand growth slowed to only 0.5% in 2015,..” is the November result, see

    http://en.sxcoal.com/0/139521/DataShow.html

    The December result shows actually a drop in power consumption by 0.2%:

    http://www.theguardian.com/environment/2016/jan/19/chinas-coal-burning-in-significant-decline-figures-show

    December was a very bad month for the thermal power traders, minus 6.6% during a month when power consumption usually peaks:

    http://en.sxcoal.com/0/139648/DataShow.html

    I’m not sure how safe these numbers are, such a fast accumulation of data (it’s only January now) can lead to errors.

    Anyhow, the relation between energy and power consumption on the one side and economical growth seems to become a more liberal relation it seems 😉

    • Matt

      Of course China stock market tanked, it is unclear yet what the change in GDP 2014 to 2014 will be. So some NRG demand drop could be the result of that.

      • heinbloed

        NRG = methane?

        A few more very modern gas power plants have been brought online, so maybe the overall drop in power production/consumption is caused by a more efficient power management, less self consumption of coal mines and coal power plants ?

  • vensonata

    Australia and Canada have much in common these days. Both have enormous resources of filthy fossil fuels, (coal and tar sand oil), both are out of luck for having customers who can afford our prices, and both are half assed for the last 20 years in preparing for such an obvious scenario by seriously instituting renewable energy structures. And both have recently had love affairs with conservative governments which has left them with a serious case of the clap.

    • Ross

      The market seems to be delivering a reality check and writing down their FF deposits for them. Luckily both countries are sitting on mountains of renewable power potential.

      • Simple INDIAN

        Bring that HVDC wires from the oceans and seas to China and INDIA.

    • Alex MacKinnon

      Except Canadian electricity is majority hydroelectric. BC, Manitoba and Quebec are all above 90% renewable. Ontario is majority Nuclear. Coal power in Canada will probably be dead before it is in the US.

      Heating load and transportation will be much harder issues to tackle though.

      Everyone knows Alberta is a horrible laggard though.

      • vensonata

        Yes, Hydro is 60% of all Canadian electricity. We ought to congratulate the governments from 50 years ago. Still nothing from recent governments.

        • Alex MacKinnon

          Manitoba, NFLD, Quebec and BC all have large hydro projects on the books.

          • rockyredneck

            With large environmental impacts, although creating a lake is not all bad.

          • ROBwithaB

            Last time I flew over, Canada already had quite a few lakes…

      • eveee

        Canada exports the tar sands, but uses hydro. The tar sands business is drying up.

        • rockyredneck

          Oil has not had a significant use for producing electricity for many years. A total switch to renewables for electricity would have extremely little effect on the demand for oil.

          Canada has diverse methods of providing power. “In 2010, the leading type of power generation by utilities in Canada is hydroelectricity, with a share of 63.7%. nuclear (15.0%), Coal (13.1%), natural gas (6.2%), wind (0.6%), fuel oil (0.5%), and wood (0.4%) follow. Other sources, such as petroleum coke make up the remaining 0.5%.”

          By contrast “About 67% of the electricity generated was from fossil fuels (coal, natural gas, and petroleum). Major energy sources and percent share of total U.S. electricity generation in 2014:Coal = 39%
          Natural gas = 27%”.

          The emissions from Canada’s oil sands are dwarfed by the emissions from American use of coal for electricity. “U.S. coal emissions are almost 27 times greater
          than the oil sands.”

          Highlight coal use for electricity
          Canada 13.1%
          USA 39%
          Coupled with the much higher demand for electricity that exists in the US, where do you think the greater problem lies.

  • JamesWimberley

    The surprising datum here is the nearly flat demand for electricity. This can’t just be due to the structural shift to consumer goods and services, for office blocks and shopping malls use air-conditioning etc. There must, as the post says, also be large gains in efficiency, much of it from from better controls on every type of electrical appliance of machine. ARM has licensed 63 billion processor cores, a good share of them embedded in appliances and their controllers; energy management is a routine function.

    This plateau in China has implications for India: it never need match US levels of electricity consumption, and growth projections foe electricity demand should be adjusted down to reflect the new frugality.

    • heinbloed

      Not only flat but declining by 0.2%:

      http://en.sxcoal.com/0/139648/DataShow.html

    • Frank

      LED lights, more efficient AC, better insulation, devices going into “sleep mode”, and I’m sure a bunch of things, but the better controls are helping too. It has probably slowed the growth of renewables, but CO2 emissions too. Might get some more demand as electric cars come in.

      • Simple INDIAN

        These are the cheapest and fastest solutions to climate puzzle.

  • Ivor O’Connor

    Earlier this month, Bloomberg New Energy Finance revealed that China’s investment in clean energy increased in 2015 by 17%, reaching $110.5 billion, “as its government spurred on wind and solar development to meet electricity demand, limit reliance on polluting coal-fired power stations and create international champions.”

    What percentage of GDP is this and what would the corresponding amount of money we would need to supply to equal China?

    • vensonata

      If I understand your question correctly the U.S. economy per capita is four times that of China and so the U.S, investment in wind and solar should be $440 billion per year. That happens to be the total amount Americans spend on electricity per year. And that is what they do need to spend to seriously move toward the goals of Paris 2015 by 2030.

      • Matt

        It all depends how you slice it. Based on fast goggle I get
        USA China
        0.32B 1.35B Population China 4.7x USA
        $53k $6.8k GDP/Cap USA 7.8x China
        $16.77T $9.24T GDP USA 1.8x China

        So to be equal USA would spend, based on
        people $23.5B
        GDP/cap $861.9B
        total GDP $198.9B
        Or maybe a equal % by each person * population
        $110.5*7.8/4.7 = $183.4B

        • vensonata

          So bottom line U.S. should spend 183 billion per year on wind and solar to equal China? I will accept that. When do we start?

          • Ivor O’Connor

            This sounds like a possible campaign rallying point. Keeping up with the Chinese by transitioning all the fossil fuel dinosaurs to wind and solar. Before the Chinese do it for us and keep the profits.

          • Tim

            China spends more per capita on industrial power than we do making stuff for us. That’s kinda on us, too. It’s weird how China is greening (slightly so far) our products for us. Keep it up China! (And Ivor, I applaud your constant push for numbers. Sorry my post has none this time.)

          • Jim Smith

            i hope you are ready for blackouts every night.

          • Bob_Wallace

            Come on, Jim. That’s just an ignorant comment.

          • Jim Smith

            how so? If you transition everyone to wind and solar, what are you going to do at night and on non-windy days? Battery technology is not there yet. Far too expensive.

          • Bob_Wallace

            It’s a transition. Not an abrupt swapout.

            When the wind is blowing use wind. When the Sun is shining use solar. When wind and solar are not adequate then use last century technology – gas and coal.

            In 2013 and 2014 CCNG ran less than 50% of the time. Gas turbines/peakers ran 5% of the time. Coal ran about 60% of the time. Lots of spare capacity. Just use it less and shut stuff down permanently when we’re really sure it’s no longer needed.

            Batteries are starting to take the job away from spinning for grid stabilization. Utilities are starting to evaluate storage. It will be some time before there’s enough wind and solar online to justify storage for time-shifting. Between now and then we’re likely to see better solutions and/or prices.

          • Ivor O’Connor

            Why would you say that?

          • Jim Smith

            Solar does not work when the sun is not shining. Wind does not work when the wind does not blow.

          • Bob_Wallace

            And nuclear reactors don’t produce electricity when they are offline.

            All sources bring problems with them. Reactors have to be maintained and fueled. They sometimes break. They sometimes go offline without notice and can stay offline for days, weeks, months and even years.

            More than a minimal amount of nuclear penetration and we need storage or to load-follow with the reactors. Those make the cost even higher.

            There are no simple solutions. There are only more expensive and less expensive solutions.

          • Jim Smith

            fact is the power from solar and wind are totally unreliable. Nuclear does not go down every night, or rely on unpredictable wind. You guys simply do not want to hear it. Until batteries are cheap, you can not rely on renewables. Does not mean solar and wind capacity should not be built where cost effective.

            Modern nuclear plants are crippled by big government regulation…like pretty much everything. Popular Mechanics has a decent article on the nuclear power in their January issue: http://www.popularmechanics.com/science/energy/a18818/can-us-nuclear-power-get-un-stuck/

            China is emerging as the world leader in nuclear technology. And i agree, there is no single energy source for the future. Nuclear is far better than fossil fuels. Nuclear + Solar + Wind should be the future.

          • Bob_Wallace

            Yes, Jim, Popular Mechanics did just publish an article on nuclear energy. Here’s a paragraph that really stood out for me….

            “Let me just give you a bald fact,” says J. Doyne Farmer, an Oxford University professor of math and complexity economics. “Nuclear power and solar photovoltaics both had their first recorded prices in 1956. Since then, the cost of nuclear power has gone up by a factor of three, and the cost of PV has dropped by a factor of 2,500.”

            Let’s look at some more…

            “Simply put, nuclear power plants can generate tremendous amounts of energy. But while it’s expensive to develop any kind of energy infrastructure, the cost of nuclear energy has not fallen over time.”

            ” The high cost also explains why it’s difficult to coax electric utilities into a new nuclear building boom, even though some new financial incentives and regulatory changes that have streamlined the licensing process.”

            “Chinaappears to be lowering the cost of nuclear development, but it’s hard to say whether that appearance reflects reality. The Chinese nuclear industry is not a free market, says Keith Florig, research scholar at the University of Florida’s Warrington College of Business. The steel for their reactors comes from state-owned mills and is processed in state-owned machining operations. There are price controls and forced relationships at every level.”

            The article goes on to discuss some ways that the cost of nuclear might be lowered. “Might be” is important. These are untested, unproven ideas. We’ve had “great” ideas before that didn’t pan out. Pebble bed reactors and the current AP1000 designs, not exactly cost reducers.

            Then consider the amount that nuclear would have to drop in price to get into the game. Currently US/Western Europe nuclear is running 13 to 19 cents per kWh plus subsidies. US onshore wind is under 4 cents and solar is dropping below 6 cents. Can you comprehend the amount nuclear would have to drop in order for nuclear to be competitive?

          • Jim Smith

            i get it. You want to not have power at night when solar does not work. And you are fine with not having power when the wind does not blow.

            I want a mix of power sources so i do not loose power under those scenarios. I do not want coal and natural gas. I want nuclear because it is the only reliable alternative.

            Someday in maybe 50 years, batteries will be so cheap they can store all the energy we need and you will not need to live in the dark at night.

          • Bob_Wallace

            Jim, please don’t be an ass. Or if that is what you’d like to be then do it somewhere else.

          • Jim Smith

            pointing out the problems with your ideas and comments is being an ass? ok.

          • Bob_Wallace

            No, Jim, ignoring the fact that we already have usable storage technology and continuing to go on about no electricity at night is asinine. “of, relating to, or resembling an ass”

          • LookingForward

            Ever thought about hydro, which together with geothermal, tidal, bio mass and waste account for about/close to 20% of the US electricity mix.
            Don’t get me wrong I am not against nuclear, as a transition source. Especially to help lessen all the nuclear waste in the world, with new nuclear technologies.
            But, by the time we rely on a small amount of FF and a large amount of “unreliable” RE that no sun, no wind could be a problem, batteries and other “reliable” RE will be big and cheap enough to replace nuclear.
            It may take 20 years to close the last nuclear power plant, it may take 200 years (both of which are unrealistic offcourse), but it will happen.

          • Simple INDIAN

            Shifting coal and oil subsidy would suffice. It would be faster transition to renewables.

          • Jim Smith

            all the subsidies should be eliminated so that cost effective solutions would thrive…in particular renewables would come out on top.

          • Bob_Wallace

            True ’nuff.

            Now give us a workable plan for pulling subsidies from fossil fuels and getting them to pay for their external costs. As you work out your plan do remember that fossil fuel industries have some good friends who are now running the US Congress.

          • Jim Smith

            As long as people keep voting for Democrats and Republicans it will never happen.

          • Bob_Wallace

            OK, so you have no plan of how we could pull subsidies for fossil fuels. There probably is no way to pull those subsidies without very strong Democratic majorities in Congress. Enough pro-environment votes to override the members from FF producing states who would have to break with the party in order to keep their seats.

            With a return to Democratic control and more public concern about climate change we could see a price on carbon. That would be a counterbalance to FF subsidies.

            Baring that we’re dependent on the now low costs of wind and solar to save our bacon. Old coal plants will age out and it will neither be possible to replace them with new coal plants nor could it be done economically. Gas plants will be turned off during the hours wind and solar can replace them and the “last 20%” will likely be replaced with storage.

            With luck we’ll see a price on carbon so that the process is sped up. The speed of the transition will be dependent, almost certainly, on economics.

          • Jim Smith

            You have no plan either other than cronyism and spending massive amounts of taxpayer money. Democrats and Republicans are lined with fossil fuel money and Democrats are getting bulk of solar and wind money today, but that will change as the government blows more taxpayer money on subsidies and more regulation.

            Gas will not be cheap forever and the cost to replace coal with solar and wind will be cost prohibitive for many decades.
            The best plan would be to remove most of the crippling regulations on the nuclear industry, open up Yucca Mountain for waste storage, end subsidies for fossil fuels, end subsidies for renewables, and do not create feel good progressive taxes on “carbon”. More taxes are not the answer.

            Doing this will push nuclear and renewables forward as the costs would be so much in their favor. All the while saving taxpayer money from wasteful government spending and creating lots of high paying private sector jobs.

          • Bob_Wallace

            “You have no plan either other than cronyism and spending massive amounts of taxpayer money. ”

            Wrongo, bongo.

            With wind and solar becoming cheap they will replace fossil fuels for both electricity and personal transportation based on economics. From here on out government spending on them will be only a catalyst, not a necessity.

            ” Democrats are getting bulk of solar and wind money today,”

            There’s some class A horseshit. Most of our wind installations are in red states, Republican states. Solar subsidies are distributed regardless of political affiliation. There’s a Green Tea Party, conservatives who advocate for solar.

            “The best plan would be to remove most of the crippling regulations on the nuclear industry,”

            What exactly are those crippling regulations? Please list the and how much we could expect the cost of nuclear to be reduced by eliminating each.

            “open up Yucca Mountain for waste storage, end subsidies for fossil fuels, end subsidies for renewables, and do not create feel good progressive taxes on “carbon””

            Even if we opened Yucca Mountain it would quickly fill and we’d be looking for another site. Especially if we built another 300 reactors. You’ve already pointed out the improbability of removing FF subsidies. Subsidies for renewables are being faded out, not so for nuclear. “Feel good” taxes on carbon? You’re wandering into the land of foolishness.

          • Bob_Wallace

            Tell you what, Jim. After you answer my questions about unnecessary regulations and cost I’d like to see your solution for a nuclear grid. Describe for us how it would be structured.

          • Bob_Wallace

            Still waiting on an answer here, Jim.

            I’m starting to suspect that you’ve never thought about how a nuclear powered grid would operate. Your thinking seems to be –

            1) Build reactors
            2) Magic happens
            3) Problem solved.

          • Jim Smith

            i suggest you educate yourself a bit about Democrat 1%er billionaire donors a bit before you comment. Start with Tom Steyer. Of course Democrat 1%er Soros is making out like a bandit on green energy and his oil trains which run thanks to Democrat opposition to the Keystone pipeline. Also you have: Michael Kempner who makes tons of money from Democrat light bulb regulations.

            So basically you are completely wrong yet again.

            There are so many regulations it would be impossible to list them all here. Again, educate yourself on the matter before making low information responses. One item is the government does not allow any research into anything but ancient light water reactors. Much better, safer, efficient, etc… designs are already available with near future designs which run off old reactors waste. This would largely solve the waste problem and massively lower costs. Again, you know nothing about nuclear, yet comment as if you do. A know it all perhaps?

            Progressives only believe in big government so i did not expect you to understand capitalism. Crony Capitalism, the progressive favorite, is of course not capitalism.

          • Bob_Wallace

            No, Jim. You are not going to get away with the “too many to list” dodge.
            Either you know what the regulations are and how they impact the price of nuclear or you demonstrate that you’re full of BS.

            Answer the question, Jim. Or admit you were just making mouth noise.

          • Jim Smith

            please. again, you comment on nuclear without having a clue about what you are talking. That is your modus operandi though.

            No matter what i list you will ignore it because facts do not matter to progressives. You stick to your falsehoods and believe that all the regulations and corruption are good. except when they do not fit your distorted narrative.

          • Bob_Wallace

            Produce Jim.

            List the regulations you claim are making nuclear too expensive. Failure to do so tells everyone that you lied.

          • Bob_Wallace

            That’s less than what we spend on the external costs of coal. Ramp up the rate of wind and solar installation to about 3% per year and in ten years or so we start getting our investment money back in savings.

            Actually we start getting our investment dollars back in year one as we burn ~10% less coal and those returns grow each year.

  • Ivor O’Connor

    non-thermal electricity generation technologies — such as nuclear, hydro, wind, and solar

    Last I knew nuclear heated steam which then ran turbines. That is when the nuclear plants aren’t taking tax payer’s money, charging customers more, and dumping nuclear poisons that will last practically forever.

    • Karl the brewer

      ‘Nuclear power is a hell of a way to boil water’ – http://www.bloomingtonalternative.com/articles/2011/11/05/10834

      • Ivor O’Connor

        I once met her when she was much younger.

        • Karl the brewer

          Situation?

    • Jim Smith

      unlike coal, nuclear power does not externalize the majority of their cost. this amounts to 10’s of billions annually. Spent fuel is not just “dumped” it is stored on site since the government can not decide where to store it.

      • Ivor O’Connor

        So you don’t think all the military “safeguards” surrounding nuclear is not an externalized cost? And every nuclear plant in our country is leaking nuclear waste yet the politicians always are passing bills to ignore it. When does the cleanup become an externalized cost? The truth is Nuclear is the dirtiest energy on the planet and needs to be shut down immediately.

        • Jim Smith

          The US military does not guard nuclear power plants.

          Please provide a source which says “…every nuclear plant in our country is leaking nuclear waste…”

          The clean up cost for a nuclear plant is factored into the cost.

          No, nuclear is no where remotely near coal in terms of environmental damage. Sorry.

          • Bob_Wallace

            Actually, they do. Nuclear reactors are on the list of targets which have to be protected if a large airplane goes off course and heads in their direction.

            Point your 747 in the direction of a reactor and observe the quick and lethal planes that come to welcome you.

          • Jim Smith

            747’s fly in the direction of nuclear plants every day.

          • Bob_Wallace

            Right, Jim.

          • Jim Smith

            interesting. you really think nuclear power plants are not over flown/along flight paths? Funny, here i thought nuclear plants were built near population centers. Did not know we built nukes to power the countryside in the middle of no where.

            And no, the military can not scramble fighters in time to stop a plane from flying into anything outside the capital. Even then it depends on how much warning time. Faith in government is a terrible thing.

          • Bob_Wallace

            Jim, I said fly in the direction, as in change course. And since 9/11 we have changed our security measures.

            Now, do you not think we spend federal money covering potential terrorist targets? Do you think reactors are not on the list?

            How about the money we spend doing fake terrorist attacks on reactors to assess their readiness?

    • Jim Smith

      Nuclear does not always use water. Molten salt reactors are far more efficient and safe.

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