Sunday, July 03, 2022

Back to black: Czech Republic to extend coal mining amid high demand

The Czech Republic has decided to reverse plans to halt mining in a key black coal region to help the country safeguard its power supply amid high demand and the energy crunch prompted by the Russia's war in Ukraine.

Finance Minister Zbynek Stanjura said Thursday that the state-owned OKD company will extend its mining activities in north-eastern Czech Republic until at least the end of next year, with an analysis to be made on a possible further extension until 2025.

The original plans called for mining to be halted there this year, but “demand for black coal is enormous,” Stanjura said.

Some other European Union countries are turning back to coal as a replacement for reduced deliveries of Russian natural gas, threatening climate goals in Europe. Russia has trimmed gas flows to EU countries like Germany, Italy and Austria on top of its gas cutoffs to France, Poland, Bulgaria and others.

OKD’s chief executive, Roman Sikora, said the Czech company was planning to mine 1.3 million metric tons of black coal in 2023.

It will be mostly used for generating power and household heating. Coal-fired power plants generate almost 50% of total Czech electricity output.

The decision came after the European Union agreed to ban Russian coal starting in August over the war in Ukraine and as it works to reduce the bloc's energy ties to Russia.


Europe's manufacturing sector is crumbling under the weight of high energy prices

The European manufacturing sector is crumbling under the weight of sustained high electricity and natural gas prices. With little prospect of relief, another wave of curtailments and closures looms.

And that’s before any rationing of natural gas, potentially later this year, in Germany in the event Russia reduces supply even further. In that scenario, many companies will have no choice but to shut down.

Gas rationing may still be a distant prospect, but the crisis is already here. The price impact on industrial activity is arriving well before the gas supply is interrupted. Governments need to decide right now which companies will get financial support, and which ones won’t.

European leaders should sit down at an emergency summit devoted to the energy crisis. Next month will not be too early. Europe needs a continent-wide campaign to save energy and reduce demand. Start now; don’t wait for winter.

We’re reaching the point of ‘no idea is too crazy’: keeping nuclear power plants running, wholesale energy price caps, suspension of markets, removal of CO2 costs and limits, burning more coal, re-starting domestic gas production even if that triggers local earthquakes in the Netherlands. Everything has to be backed up with multi-billion-euro loans from governments to key sectors.

The problem isn’t just the current eye-watering prices for power and gas. The forward contracts for 2023, 2024 and even 2025, which are used to lock in energy costs, are getting more expensive by the day. “This may be a sustained price rise, rather than something that disappears quickly,” Jonathan Brearley, the head of the UK energy regulator Ofgem, said earlier this month.

The months-long crisis that many industrialists penciled into their plans has morphed into a years-long problem. The prospect of bleeding cash for a few months, perhaps half a year, or even a year, was one thing; losing money indefinitely is another thing entirely.

For example, an aluminum smelter would lose about $200 million annually at current forward prices for electricity and carbon dioxide for the next year. And that’s despite elevated prices for the metal in the markets. Aluminum may be an extreme example, but it’s evidence of the pressures faced by industrialists.

In private, European executives say they’ll use the forthcoming quarterly reporting season in mid-July to announce more plant closures. The affected industries will be those with the most intensive energy use: fertilizer, base metals and steel, chemical, ceramic, glass and paper. But increasingly food production will be, too. Heated greenhouses and chicken farms face astronomical energy bills.

A few companies have already announced their intentions. Earlier this month, CF Industries Holdings Inc., the US fertilizer producer, said it will close one of its UK plants permanently as it struggles with high energy costs. Others are on the chopping block. The future of Slovalco, an aluminum smelter in Slovakia in which Norsk Hydro ASA has a majority stake, looks very grim, with the plant likely shutting down in 2023.


British Fracking ban could be axed in days in potential boost to gas supplies, source says

The ban on fracking could be lifted within days if a scientific review finds the risk of earth tremors can be minimised.

The British Geological Survey is due to report to ministers on whether new techniques could limit the potential effects of fracking for natural gas.

The ban was imposed in 2019 over concerns about earth tremors and the impact on the Government's net zero emissions target.

A Government source said safety concerns remained paramount, but added: 'The war in Ukraine has shifted the dial on this.

'Russia's actions have made security of supply a bigger issue. And... gas produced here will have a lower carbon footprint than gas we are importing.'

Britain has vast reserves of shale gas underground. Some experts say 10 per cent of the resources would make the UK self-sufficient in energy for 50 years.

The new report has been completed but is now being peer-reviewed in the United States, where fracking is a major industry, before being handed to ministers.

More than 30 Tory MPs signed a letter this year calling on the Government to lift the 'un-Conservative' ban on fracking.

Tory MP Lee Anderson said ministers could reduce opposition by offering steep discounts on people's bills.

Mr Anderson, a former coal miner, said: 'I'm very pro-fracking - we should be making the most of our natural resources if it can be done safely.

'If the United States hadn't gone for fracking a few years ago then the whole world would be in trouble now. We could be enjoying the same low prices as them.

'Of course it has to be safe but we also have to be offering massive financial incentives to local communities - I think if you did that you would see a lot of opposition melt away.'

Fracking is widely exploited in the US where it has helped revolutionise the oil and gas industry. Critics argue that the UK's denser population, coupled with different geology, make it impractical.

They appeared to have won the argument in 2019 when the government imposed a moratorium on further exploration.

The former fracking tsar Natascha Engel quit her post that year, saying 'ridiculous' government rules amounted to a 'de facto ban' on an industry that was on the cusp of an 'energy revolution the like of which we have not seen since the discovery of North Sea oil and gas'.

The industry looked set to be wound up in the UK earlier this year, with fracking firm Cuadrilla ordered to fill in its last two remaining wells in Lancashire.

But the firm was given a last minute reprieve in the wake of Russia's invasion of Ukraine.

The moratorium followed an earth tremor at Cuadrilla's site near Blackpool in August 2019, which measured 2.9 on the Richter Scale - far above the 0.5 limit set by ministers.


Replacing coal: A very tongue in cheek Australian report below

The feasibility is absent and the cost would be astronomical

Coal generators are likely to shut sooner and Queensland will need big-scale pumped hydro equivalent to 30 times what is available at Wivenhoe power station before they do, the energy regulator is warning.

It is revealed in the Australian Energy Market Operator’s 30-year road map to be released today, which predicted the last coal generators could shut as early as 2040.

Currently the last coal-fired power station, Queensland’s Millmeran, is scheduled to wind up in 2051.

Just one Queensland coal-fired power station is currently scheduled to close before 2030 – Callide B in 2028 – while Gladstone and Tarong are forecast to shut down in 2035-36 and Stanwell, Kogan Creek and Yabulu are not due to close until the 2040s.

Under the most likely scenario to reach net zero by 2050 modelled by AEMO “all coal capacity could close as early as 2040”.

“If closures can be co-ordinated with adequate notice, then technical and market challenges may be managed. If they are not, the risk of price and reliability impacts on consumers quickly rises,” the road map warned.

“Deep storage”, like pumped-hydro projects the size of Snowy 2.0, will be needed to keep the lights on reliably once the state’s coal generators are shut down.

“It may be prudent for early investment in deep storage across the (national energy market), to enable improved resilience to earlier coal closures or project commissioning delays,” the AEMO report stated.

It stated that when all Queensland coal capacity retired, another 6GW of deep storage would be needed to complement 10GW of smaller battery storage, the “equivalent to 30 times the existing Wivenhoe power station”.

AEMO chief executive officer Daniel Westerman said the road map was developed to help manage the “complex, rapid and irreversible energy transformation”.

“To maintain a secure, reliable and affordable electricity supply for consumers through this transition to 2050, investment is required for a nine-fold increase in grid-scale wind and solar capacity, triple the firming capacity (dispatchable storage, hydro and gas-fired generation) and a near five-fold increase in distributed solar,” he said.

There will also need to be almost $4.8 billion in investment in power network, supply and transmission upgrades needed from far north to southern Queensland as part of the transition to a renewable electricity market.

This includes $408 million for Gladstone Grid Reinforcement, $1.2 billion for network upgrades between Cairns and Townsville to increase capacity of the Far North Queensland renewable energy zone and $1.16 billion for a network capacity expansion across the Darling Downs renewable energy zone.




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