VDKi: coal continues to secure energy transition
(Posted on 25/10/21)
The Verein der Kohlenimporteure e. V. (VDKi) – the German Coal Importers association, believes that the course of 2021 illustrates very clearly that security of supply is and will remain one of the most important issues in the German energy transition.
The expansion of supply-dependent renewable energy, wind and solar, is the heart of energy policy. A further increase in the share of renewable energies increases the need to reserve available capacity. This is because adequate, controllable and secured power must be available in the event of dark periods. And in phases of prolonged dark lulls, the high demand in Germany cannot be met either by importing electricity from neighboring countries or by incentivizing flexibility on the electricity demand side. Hard coal can and will be a reliable partner for security of supply in Germany during its allotted remaining lifetime - not only for electricity, but also for district heating in a transitional period.
In order to enable the transformation to a sustainable and secure energy supply and to offer the companies and their employees prospects for the future, energy policy decisions are needed quickly which also affect the market design.
The high demand for electricity due to the recovery of German industrial production after the pandemic-related economic slump in 2020 and the low availability of wind power have significantly reduced the share of renewables in electricity generation. Hard coal has filled much of this gap and made an important and reliable contribution to power generation. In the first three quarters of 2021, the amount of electricity generated from hard coal increased by around 35% to almost 37 TWh. With 8.6%, hard coal made a significant contribution to security of supply, impressively underlining its important role in securing the energy transition. For the calendar year 2021, the VDKi expects hard coal imports to Germany to reach a level of 38-39 million t, which is likely to be around 6 - 7 million above the previous year.
On the world market for steam coal, China continues to be the dominant factor on the demand side. In the run-up to the celebrations to mark the 100th Party anniversary, the country's own coal production capacities were scaled down for health and safety reasons. Following the Covid-comeback of the Chinese economy, this capacity is now missing, but is being structurally rebuilt. The post-pandemic restart is also causing problems for Russian coal exports, with rail logistics currently lagging badly behind requirements. The Russian gap is being filled for Europe by coal from South Africa, which currently is increasingly entering the ARA (Amsterdam/Rotterdam/Antwerp) markets after a long absence.
Despite the sharp rise in global demand for hard coal, the German market was reliably served. The highly fluctuating demand situation posed an enormous challenge for inland logistics.
The sharp rise in the price of coal since the beginning of the year, currently forward price of 230 USD/t for October and 170 USD/t for November, has not led to a cooling of demand for coal. As the price of natural gas, a competitive energy, has risen much more sharply than coal, the use of hard coal is economically attractive despite high CO2 prices. As a result of this highly volatile market situation, caused by the development of gas prices, the exchange prices for electricity have also risen significantly.
Latest News
ADM and Mitsubishi form strategic agriculture supply chain alliance
(Posted on 01/04/25)ADM and Mitsubishi Corporation have signed a non-binding memorandum of understanding to form a strategic... Read more
ESL Shipping and SSAB extend cooperation in raw material transports
(Posted on 27/03/25)ESL Shipping and global steel manufacturer SSAB have agreed on a multi-year extension of the agreement... Read more
Sakatti copper project in Finland awarded ‘Strategic Project’ status by EU
(Posted on 27/03/25)Anglo American’s Sakatti copper and polymetallic project in Finland has been designated as a &... Read more
FEFAC calls for targeted transatlantic feed trade agreement
(Posted on 18/03/25)FEFAC, representing the EU compound feed and premix manufacturers, noted with deep concern the announced... Read more
Cargill inaugurates new corn milling plant in Gwalior, India
(Posted on 18/03/25)Catering to the growing demand from India’s confectionery, infant formula, and dairy sectors,... Read more
Metal Park launches storage hub in KEZAD
(Posted on 12/03/25)Khalifa Economic Zones Abu Dhabi – KEZAD Group, the largest operator of integrated and purpose... Read more
Rio Tinto to invest $1.8bn to develop Western Australia Brockman mine
(Posted on 06/03/25)Rio Tinto will invest $1.8 billion1 to develop the Brockman Syncline 1 mine project (BS1), extending... Read more
Canadian steel industry denounces tariffs on Canada
(Posted on 04/03/25)Catherine Cobden, President and CEO of the Canadian Steel Producers Association (CSPA), has released... Read more
Study: Enough scrap to meet rising U.S. demand for recycled steel
(Posted on 04/03/25)Enough domestic ferrous scrap is available for electric arc furnace (EAF) steelmakers to supply nearly... Read more
Cargill and Hafnia launch Seascale Energy
(Posted on 01/03/25)Cargill’s Ocean Transportation business and leading tanker shipping company, Hafnia, have joined... Read more
