CoalImp – Review of the Year-+Review+of+the... · 2020. 4. 1. · 1 CoalImp – Review of the Year Nigel Yaxley Managing Director, CoalImp Electricity fuelling was again almost

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www.coalimp.org.uk

CoalImp –Review of the Year

Nigel Yaxley

Managing Director, CoalImp

Electricity fuelling was againalmost 40% coal in 2013…

Annual Luncheon Meeting20th March 2014

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Coal39%

Gas25%

Nuclear20%

Others, includingRenewables

16%

Source: DECC

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UK12.9522%

Russia17.8131%

USA12.4121%

Colombia10.0417%

Australia1.733%

Poland0.531%

Canada0.511%

South Africa0.421% Others

1.443%

Million Tonnes

…whilst imports grew by 6%at 78% of total UK supply…


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Source: DECC/HMRC

0

2

4

6

8

10

12

14

16

18

20

UK Russia USA Colombia Australia Poland Canada SouthAfrica

Others

Mill

ion

Ton

ne

s

2011 2012 2013

…with USA now supplyingalmost as much coal as UK


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Source: DECC/HMRC

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January 2013 - John Hayesat World Coal Association


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“determinedto be the

Minister thatput coal intothe coalition”

April – Michael Fallon is thenew Energy Minister…

Response to CoalForum:

“…we now believe thatthe interests of theindustry are best servedby concentrating effortson supportingcompanies to manageshorter-termchallenges…”


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4

…and EU Commissionlaunches 2030 Green Paper


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May – Cost-competitiveCCS predicted by task force

“UK gas and coal powerstations equipped withcarbon capture, transportand storage have clearpotential to be costcompetitive with otherforms of low-carbon powergeneration, deliveringelectricity at a levelised costapproaching £100/MWh bythe early 2020s, and at acost significantly below£100/MWh soonthereafter.”Annual Luncheon Meeting20th March 2014

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5

June – ORR reacts to coalindustry realities…

Original proposal forfreight-specific chargeon coal reduced by75%

£4.04 down to £1.04/thousand gross tonnemiles

Phasing to full rate in2018/19

Chargeable per grosstonne mile

No charge for biomass


9

…as Energy Bill receives itsthird reading…

“Everything in this Bill isbased on the premise thatwe need to significantlydecarbonise our powersector in order to meetclimate targets…”

Ed Davey

“We know that investorswant certainty fromGovernment and this willbe the year that they getthe certainty they need…”

Michael Fallon


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6

…and BP again reports theinexorable rise in coal use


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Source: BP Statistical Review 2013

July – New dawn over therail line at Hatfield…


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7

…after this scene fourmonths earlier…


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…with traffic resuming on8th July


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8

…development banks closeranks against unabated coal

World Bank “will provide financial support for greenfield coal

power generation projects only in rarecircumstances”

European Bank for Reconstruction andDevelopment “will provide its financial support for greenfield

coal power generation only on limited occasions”

European Investment Bank “has introduced an Emission Performance

Standard of 550g CO2/kWh to screen the Bank’sinvestments in fossil fuel generation projects”


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August – IEA again reportsgrowing coal production…

2012 – world coalproduction up by 2.9% 74% higher than 1999

Hard coal 6,926 Mt

Brown coal 904 Mt

China 3,549 Mt

45.3% of world total

Global coal trade up by9.7% to 1,255 Mt


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9

0

500

1,000

1,500

2,000

2,500

3,000

China UnitedStates

India EU27 Russia Japan SouthAfrica

Others

Mill

ion

Ton

ne

sC

oal

Equ

iva

len

t

…with China massivelydominating world demand


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Source: IEA Coal Information 2013

A strategy forcoal………

September – CoalImplaunches new report…

Coal and the energytrilemma

Secure coal

Affordable coal

Sustainable coal

Coal under threat


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10

…with existing coal – abridge to the future…

Steep upward trajectoryof Carbon Price Supportshould be reconsidered

Capacity Mechanismshould be designed togive firm investmentsignals, with equaltreatment to existingcoal plant in providingreliable flexible back up


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…and new sustainable coalfor the long term…

Government should give aclear statement of longer-term ambition for coal withCCS

Government must now pressahead with its CCSdemonstration programmeon coal, without any furtherslippage…

…as well as using themechanisms in the EnergyBill to enable more coal CCSprojects to come to fruition


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…whilst DECC Projectionsstill play down coal


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Source: DECC Updated Energy and Emissions Projections 2013

October – Labour raisesstakes on energy prices…

“There is not a low-cost energy future outthere”

Ed Miliband 2009

“If we win the electionin 2015 the nextLabour governmentwill freeze gas andelectricity prices untilthe start of 2017”

Ed Miliband 2013


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…as Ed Davey makes clearhis attitude to coal…

“Unless and until we get carbon captureand storage commercially viable, coal hasno future…”

“Cleaner gas will be essential for keepingthe lights on, as we replace dirty coal…”


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…and George Osbornemakes the case for shale gas

“And should weaccept that thisnation that mineddeep for coal, andtook to the cold,stormy seas tosearch for oil, willturn its back on newsources of energylike shale gas?

“No”


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13

November – Coal Forumstrategy paper released…

Key recommendations –

Freezing Carbon Price Floor

Designing Capacity Mechanism tofacilitate investment in NOx abatement

No further tightening of emissionsconstraints

Acceleration of coal Carbon Capture andStorage (CCS)

Development of CO2 infrastructure

Target of 10GW CCS by 2030


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…and FT picks up CoalImp’saffordability press release

“Fuel costs forgeneratingelectricity from coalare around halfthose for naturalgas”

“Unilateral UKaction, such as thesteep rise in thecarbon price floor,continues to pose athreat tocompetitiveness”

Nigel YaxleyAnnual Luncheon Meeting20th March 2014

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14

In Warsaw NGO’s preferprotesting to engagement…


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EU

India

China

Others

0

500

1,000

1,500

2,000

2,500

3,000

3,500

20112020

2035

409356

207

466 607973

2,6663,026 3,050

1,850 2,014 2,096

Mill

ion

Ton

nes

Co

alEq

uiv

ale

nt

…but IEA reminds us thatcoal is not going away soon


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World Coal Demand Outlookin New Policies Scenario

Source: IEA World Energy Outlook 2013

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December – Governmentreacts on energy bills…

An average saving of £50 a year

Reducing the cost of the EnergyCompany Obligation (ECO)

But nothing on Carbon PriceFloor (yet)


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…announces funding forthe Drax CCS project…

“We anticipate up to 12GW of CCS could bedeployed by 2030, rising to 40GW by 2050”

…pushes the Energy Bill toRoyal Assent

Lords’ amendment 4th November To impose CO2 emissions performance

standard on existing coal plant undertakingmajor investment for IED

Passed by 274 to 193

Commons debate 4th December Defeated amendment 318 to 236

Lords compromise amendment 11thDecember Defeated 262 to 215

Finalised passage of bill


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…and makes a flurry ofrelated announcements

Electricity Market Reform Delivery Plan “set to unlock up to £110 billion of private

sector investment in the electricity sector”

Final Investment Decision (FID) Enablingfor Renewables Included Drax and Lynemouth biomass

conversions but not Eggborough

New tools available for National Grid tomanage tight Electricity Supplies fromWinter 2014/15

Consultation on Regulations for Contractsfor Difference


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January – EU proposes2030 package…

Emissions reduction target of 40% Binding at both EU and Member State level,

Individual MS targets to be negotiated

Renewables target of 27% Binding at the EU level but non-binding at MS level


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…and UK Press speculateson carbon floor price freeze

Mail on Sunday - 26th

Coal Forum presents strategy document atministerial meeting on 27th January

No Coal Strategy – but engagementpromised on key issues…

…and sub-group has follow-up meetingwith Treasury on 5th February


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February – TUC/CCSA andAPGTF launch CCS reports…


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… as funding is announcedfor “world’s first gas CCS”


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March – NERA models CPFfreeze for Coalpro...

Freezing at £9.55/tonne Significantly improves

energy affordability Savings per household

of £63 per year by 2025

Enables a “bridge” toCCS technology 13 GW of coal-fired

generation plants opt into the IED

Defers the need for investment in new generationcapacity Capital expenditure requirements £13 billion lower

Achieves long term emissions objectives while limitingoffshore emissions from increased electricity imports


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...and Chancellor freezes at2015/16 level in Budget

Carbon price floor(CPF) capped at£18.00/tonne CO2

for rest of decade

Saving business £4billion by 2018/19

Remains committedto CPF

Urges reform andstrengthening of EUEmissions TradingSystem


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CoalImp Members

ABP Clydeport DB Schenker Drax Power EDF Energy

EggboroughPower

E.ON EnergyTrading

ESGFergusson

GroupFreightliner

GBRailfreight

GDF Suez HargreavesInspectorateInternational

KnightEnergyServices

LynemouthPower

Network Rail Oxbow Coal Port of TyneRedcar Bulk

Terminal

ScottishPower

SSE EnergySupply


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Documents

CoalImp – Review of the Year-+Review+of+the... · 2020. 4. 1. · 1 CoalImp – Review of the Year Nigel Yaxley Managing Director, CoalImp Electricity fuelling was again almost