the future of colombian coal exports international steam coal … · 2017. 9. 27. · our research...

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The future of Colombian coal exports –

International steam coal market

in the era of climate policies

IAEE European Conference; Vienna, 6th September, 2017

Dr. Pao-Yu Oei, Dr. Roman Mendelevitch

Workgroup for Infrastructure Policy (WIP; TU Berlin); German Economic Research Institute (DIW Berlin)

- 1 -

Agenda

1. Motivation

2. Colombia`s role in the international steam coal market

3. Trends in current import partners, mainly Europe and US

4. Perspectives for possible new export partners in South-East Asia

5. Implications of the upcoming global coal phase-out

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Motivation: 70-90% of coal, 30-60% of gas and 30-60% of oil

reserves has to stay unmined to reach the 2°C target

Source: McGlade & Ekins (2015)

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Times are changing for coal

The success of renewables (and lower gas prices in some regions) have lead to a reduction of

coal demand in the western world. Several smaller countries in the EU are already coal-

free or will phase-out in the 2020s.

The Republic of China has introduced a moratorium on new coal power plants and mines and

India is observing a much slower increase of coal demand than expected.

As a result, steam coal production declined by around 28% between 2005 and 2015.

Coal companies world-wide are struck with low prices and are challenged by ongoing

divestment movements.

0

50

100

150

200

US

D Eurozone CIF

FOB Richards Bay

FOB Newcastle

Crude oil

Source: HWWI commodity prices in the Thompson Reuters Datastream database.

- 4 -

Colombia`s future as 4th largest exporter of steam coal

There already exists a wide range of studies that put foci on various environmental and social

implications of the coal mining industry in Colombia (e.g., see Moor and van de Sandt 2014;

CAN 2016b; Hawkins 2014; Chomsky and Striffler 2014; CINEP/PPP 2014; Schücking 2013).

Our research focus lies on: How will coal exporting countries, such as Colombia, be affected

by the decline of the coal industry?

Doing so, requires an analysis of

• the competitiveness of the coal exporting country (in this case: Colombia),

• current market development in other coal producing and consuming countries,

• prospects for future Colombian coal exports.

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Agenda

1. Motivation





- 6 -

Colombia: Coal mining activities and its electricity system

based mostly on hydropower

The Colombian coal sector is dominated by three

international firms:

• Cerrejón, owned by a consortium of BHP

Billiton, Anglo American and Glencore;

• US-based Drummond; and

• Prodeco, a Glencore subsidiary.

In Colombia, two areas – La Guajira and Cesar –

account for over 90% of the annual production.

Currently, around 30.000 people are directly

employed by the three biggest coal companies.

Source: Own illustration based on UPME (2014) and USGS (2006).

Electricity from

Hydro

Gas

Coal

Port

- 7 -

The competitiveness of Colombian steam coal: High quality…

• The degree to which a particular supplier of steam coal can be substituted depends on the

specifics of the power plant and on the coal it is designed for.

• Colombian high quality coal is compatible with modern high efficiency power plants. Coal

from Indonesia and South Africa on average is of lower quality and needs future

preparation and beneficiation before it could substitute Colombian coal in high efficiency

supercritical and ultra-supercritical boilers.

• Coal-fired power plants in India and South-East Asia are designed for low quality coal and

cannot easily switch to other suppliers offering high quality coal, such as from Colombia.

Region Calorific value in kcal/kg Energy content in GJ/t

USA Appalachia 6949 29.075

China Shanxi, Shaanxi, Inner Mongolia 6597 27.600

Australia Queensland 6500 27.196

Colombia 6375 26.673

Australia New South Wales 6300 26.359

South Africa 5500 23.013

Indonesia 5450 22.803

India West 5209 21.793

USA Powder River Basin 4781 20.004

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… at relatively low supply costs.

In Colombia, much of the infrastructure for transport to and at the export terminals is

undergoing expansion or has recently been expanded despite the negative outlook.

The widening of the Panama Canal in 2016 is expected to increase the competitiveness of

Colombian steam coal exports also on the Pacific market. Potential drawbacks for this

route are, however, an additional fee of $300,000 per capesize ship (resulting in a mark-up

of ~2$/t coal) and maximum loading restrictions due to the canal's draft restrictions.

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- 9 -

Coal exports from Colombia

Colombia increased its export volumes steadily from 14Mt of coal in 1990 to 82Mt in 2012.

Having become the 4th largest exporter of steam coal, its export figures stayed relatively

constant until 2015.

The value of these coal exports ranks second with 14% (behind Crude Petroleum comprising a

share of 34%) of overall Colombian exports. Most coal exports are bound to the USA and

the European Union.

These export volumes make Colombia vulnerable to changes of global resources’ demand and

prices. A reduction of international steam coal prices resulted in a strong decrease of

Colombia´s coal rents from an all-time high of 2.3% of GDP in 2008 to 0.5 in 2015.

Main export destinations of

Colombian steam coal

Source: VDKI and IEA/OECD

(2016).

- 10 -

Agenda

1. Motivation





- 11 -

Coal capacities in Europe observe a decreasing trend.

Coal free countries in the EU: BE, CY, EE, LT, LU, LV, MT

Source: CAN database / Sandbag (2016)

2025

2025

2025

2020

2020s

?

2016

- 12 -

The outlook for coal in the US is negative. The change of

national government will not influence the global dynamics.

The share of coal in total electricity generation declined from 52.3% in 2000 to 34.3% in 2015.

This is largely on economic grounds and in particular, due to the boom in production of low-

priced domestic shale gas, and the availability of cheap renewable technologies.

Further important drivers are federal and state level promotion of wind and solar energy as well

as environmental policies for coal-fired power plants. Given the aging coal-fired power plant

fleet (with 85% older than 30 years and 50% older than 40 years) the environmental policies

mentioned above were supposed to lead to power plants increasingly being decommissioned

rather than refurbished.

Numerous U.S. coal producers (including Peabody Energy Cooperation, Arch Coal Inc., and Alpha

Natural Resources, listed first, second and forth in the top four U.S. coal mining companies) have

filed for bankruptcy and 271 mines were closed in the last years.

The current U.S. administration, however, targets to take back measures

introduced in the Climate Action Plan and instead to support clean

coal technology, soften emission standards for new coal-fired power

plants, lift the moratorium on new coal mine leases and announced

to withdraw from the Paris Agreement. However, for the next years

the competitiveness of the US domestic coal sector will be

governed by the evolution of the gas price and cost of

renewables rather than by the rollback of environmental

regulation by the Trump Administration.

Source: SPON (2017).

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Agenda

1. Motivation





- 14 -

The global coal power pipeline is currently observing a major

hault, dominated by the happenings in China and India [MW]

Coal capacities are displayed in GW; Source: Shearer et al. (2017).

Emerging countries are expecting rising energy demands due to population growth and

economic development resulting in the construction of numerous new coal power plants.

China and India accounted for 86% of global installed coal power capacity 2006-2016.

Many projects, however, were shelved in the last year; see coal power plant pipeline in 2017:

- 15 -

Dramatic changes to China’s coal pathway with a big

uncertainty about future developments

• Electricity generated by coal peaked in

2013, coal power capacity cap of 1,100GW

to be reached in 2020 (921 GW installed as

of January 2017; representing 47% of global

installed power capacity).

• Capacity factor of power plants

decreased below 50% in 2015 and 2016.

• Plans to retire older coal power plants.

• Suspension of new plant approvals and

halt on construction in several provinces;

Total amount of cancelled projects between

2010 and 2016: 203 GW. Cancellation of

100 specific plant projects from September

2016 to January 2017.

Sources: Climate Action Tracker (2017a); Endcoal (2017a, 2017b); Isoaho (2016); Shearer et al. (2017).

The implemented climate and environmental policies have already resulted in a hault

of coal consumption and the beginning of a Chinese coal phase-out earlier than

expected.

China, therefore, needs alternative renewable energy sources.

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Status-quo of coal in India

• Installed coal capacity grew from 71 GW in 2007 to

212 GW in January 2017 (11% of global capacity).

• Rapid expansion resulted in falling capacity factors.

• Leading coal power producers (e.g. Adani) suspended

investments and further development.

• Draft Electricity Plan: No new coal capacity needed

between 2022-27, apart from the 48 GW already under

construction.

• India implemented a tax on coal of US$ 3.2/t coal;

revenues go to the National Clean Environment Fund.

Indian coal consumption has grown much slower

than expected.

India needs alternative energy sources to provide

all people with cheap electricity.

Sources: Climate Action Tracker (2017b); CoalSwarm (2017); Shearer et al. (2017)

Installed

capacity

Put on hold in

total (end 2016)

Previously under

construction put on hold

Cancelled

during 2016

Pre-

construction

Active

construction

212 82 13 115 129 48

Coal capacities in 2017 [GW]

- 17 -

Agenda

1. Motivation





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The upcoming coal phase out effects countries differently and

therefore needs a combination of various political instruments

Need to differentiate between countries:

that only mine coal (e.g. Colombia)

• employment

• income from exports

those burning coal (e.g. UK and many countries in Europe)

• energy security

• (employment)

those doing both (e.g. US, China, India, South-Africa, Germany)

• energy security

• employment

• (income from exports)

that only mine coal (e.g. Colombia)

• employment

• income from exports

those burning coal (e.g. UK and many countries in Europe)

• energy security

• (employment)

those doing both (e.g. US, China, India, South-Africa, Germany)

• energy security

• employment

• (income from exports)

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Coal phase-out concepts need to incorporate different regional

aspects

Financial paymentsas compensation fora moratorium on new mines

--------------------

Support for RES tomeet rising energydemand, enableenergy access & create jobs

Active & passive labour marketinstruments toenable a just transition

e.g. Colombia

Moratorium on newmines

Existing coal power plant fleets need tobe closed

Support for RES toreplace fossil capacities & createjobs

Active & passive labour marketinstruments to enablea just transition

e.g. Europe or

USMoratorium on newmines; maybe linkedwith compensations

Moratorium for newplants to prevent(stranded) assets


Active labour marketinstruments tocreate new jobs

e.g. China or

IndiaFinancial paymentsas compensation fora moratorium on new mines

--------------------


Active & passive labour marketinstruments toenable a just transition

e.g. Colombia

Moratorium on newmines

Existing coal power plant fleets need tobe closed

Support for RES toreplace fossil capacities & createjobs

Active & passive labour marketinstruments to enablea just transition

e.g. Europe or

USMoratorium on newmines; maybe linkedwith compensations

Moratorium for newplants to prevent(stranded) assets


Active labour marketinstruments tocreate new jobs

e.g. China or

India

- 20 -

Direct effects of the upcoming coal phase-out for Colombia

The speed of the coal phase-out will not be driven by the remaining coal reserves. The

main driver for the coal phase-out will be shrinking global demand due to climate

and environmental policies as well as direct competition from cheaper and

cleaner energy sources. This trend can be seen in the Atlantic as well as Pacific

steam coal market.

Coal exporting countries, such as Colombia, are at risk not only to lose high shares of

their state income but also to be left alone with mono-industrialized regions with

low chances for a transition towards alternative and more sustainable industry

sectors. Not needed mining investments can be categorized as stranded and

should be redirected to prevent unnecessary use of financial means and resources.

Divestment strategies or bankruptcy of coal firms might lead to insufficient provisions for

mining recultivation and result in additional costs for the Colombian state and its

people. The Colombian case is at risk of becoming another example of the

“resource curse”.

A consistent global and national policy mix and strategies are needed for the closure

of older coal plants, the ban on new coal mines and plants, the diversification of the

technology mix, and investments into lucrative renewables to manage this transition.

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The future of Colombian coal exports –

International steam coal market

in the era of climate policies

IAEE European Conference; Vienna, 6th September, 2017

Dr. Pao-Yu Oei, Dr. Roman Mendelevitch

Workgroup for Infrastructure Policy (WIP; TU Berlin); German Economic Research Institute (DIW Berlin)

- 22 -

Colombia´s electricity system is mostly based on hydropower

Steam coal is therefore mostly exported

Installed Capacities and future capacity expansions:

Source: UPME (2014).

- 23 -

Port

Port Electricity from

Hydro

Gas

Coal

- 25 -

Different policy instruments exist to enable a coal phase-out

(demand and supply side, technology support, labour)

PROPOSED MEASURE EXPECTED EFFECT

Forbidding new mines Terminating current plans for new minings sites

Closing existing mines Reducing mining volumes of active mines

Increasing the CO2 price / EU-ETS reform Price signal through the introduction of market stability reserve (MSR);

CO2 floor price CO2 certificates would become more expensive

Minimum efficiency Closure of inefficient power plants

Flexibility requirements Closure or singling out of inflexible power plants

Coal phase-out law Maximum production [TWh] or emissions allowances [tCO2] for plants

Emissions performance standard (per

unit; for new plants and retrofits)

Restrictions for new plants and retrofits (without CO2 capture) [< x g/MWh]

Emissions performance standard

(emissions cap for existing plants)

Reduce load factor for depreciated coal-fired power plants (e.g., >30y) [< x

g/MW]

Capacity mechanisms or reserve plants Incentive for construction of less CO2-intensive power plants

Climate contribution fee Additional levy for old CO2-intensive power plants

Support of RES & technology transfer Enabling suffcient clean energy sources to replace coal plants

Active & Passive labour policies Creation of new job opportunities; ease potential job losses

Source: Updated from Oei et al. (2014).

- 26 -

Coal phase-out concepts need to incorporate different regional

aspects

Existing coal power plant fleets need to beclosed

Support for RES toreplace conventionalcapacities

Active & passive labour market instruments to enable a just transition

e.g. Europe or US

Moratorium for newplants/ mines toprevent (stranded) assets

Support for RES tomeet rising energydemand and enableenergy access

e.g. China

or India

- 27 -

Main Findings on the upcoming global coal phase-out

1. The climate targets of Paris imply a global phase-out of coal. The majority

of resources has to stay in the ground.

2. There is a global trend to phase-out coal power plants in several

countries, which is economically efficient.

3. A global energy system based on 100% renewable energy sources until

2050 is technically possible and can be achieved at low costs.

4. A consistent global and national strategies and policy mix is needed

for the closure of older plants, the ban on new coal mines, the diversification of

the technology mix, and investments into lucrative renewables.

5. The access of all citizens to avordable renewable electricity is a major

challenge for some emerging countries. A just energy transition, however,

also creates new jobs and opportunities for various regions and sectors.

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Coal mining in Colombia

The coal mine “Cerrejon Zona Norte”, run by Cerrejon and located in La Guajira, is the largest

open pit mine in South America. Its annual production reached 34 Mt in 2014.

The second largest steam coal producer with around 20 Mt/year is US-based Drummond Ltd,

which operates two major mines near La Loma in the department of Cesar.

The third biggest operator Prodeco, a subsidiary of Glencore, is operating its mine Calenturitas

located between the municipalities El Paso, La Jagua de Ibirico and Becerril; in the department

of Cesar. Its production reached 11 Mt in 2015.

Production from smaller coal mining companies operating in Colombia sum up to 7.6 Mt/a.

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Coal mining

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The importance of coal for Colombia

- 34 -

- 35 -

Articles (selection)

• Oei et al. (2016): „Kohlereserve“ vs. CO2-Grenzwerte in der

Stromwirtschaft – Ein modellbasierter Vergleich“,

Energiewirtschaftliche Tagesfragen, 1-2/2016

• Collins, and Mendelevitch (2015): Leaving Coal Unburned: Options

for Demand-Side and Supply-Side Policies, DIW Berlin, DIW

Roundup 87, Berlin, Germany.

• Richter, Mendelevitch and Jotzo (2015): Market Power Rents and

Climate Change Mitigation: A Rationale for Coal Taxes?, DIW Berlin,

DIW Discussion Paper 1471, Berlin, Germany.

• Holz, Haftendorn, Mendelevitch, and Hirschhausen (2015): The

COALMOD-World Model: Coal Markets until 2030, in R. K. Morse and

M.C. Thurber (Eds.) “The Global Coal Market - Supplying the Major

Fuel for Emerging Economies”. Cambridge University Press.

• Oei et al. (2014): Modeling a Carbon Capture, Transport, and Storage

Infrastructure for Europe“. Journal of Environmental Modeling and

Assessment 05/2014

Politikberatung kompakt and DIW Wochberichte (selection):

• Oei et al. (2015): 104: Auswirkungen von CO2-Grenzwerten

für fossile Kraftwerke auf Strommarkt und

Klimaschutz in Deutschland. Politikberatung 104.

• Oei et al. (2014): 84: Braunkohleausstieg – Gestaltungsoptionen im

Rahmen der Energiewende. Politikberatung 84.

• Oei et al. (2014): Kohle und Klimaschutz. DIW Wochbericht 14-26

Publications by DIW Berlin on coal and lignite (Selection)

- 36 -

Electricity Generation in the EU: Coal vs. Gas Phase-out

Source: Agora Energiewende 2016

- 37 -

Reserves of lignite and hard coal in Europe (2012): The

majority has to remain in the ground to meet climate targets

So

urc

e: E

ura

co

al(2

01

3)

- 38 -

Most coal power plants in China are located at the east-coast

Sources: Climate Action Tracker (2017a); Government of China (2015); Coal Swarm (2017).

Note: The numbers tell

the number of generating

units at each location.

- 39 -

Share of installed capacity in 2015

Coal RES (without hydro)

Northern Region 58% 2%

Western Region 64% 17%

Southern Region 47% 28%

Eastern Region 83% 3%

North Eastern Region 15% 7%

Islands 0% 24%

India Total 59% 17%

The coal phase-out will have different structural effects shown

by an analysis of current dependencies on coal & renewables

Especially the Northern and Eastern Region are vulnerable to the upcoming

structural changes of the energy transition, as they have a high dependence on coal

and very small amounts of renewable energy capacities.

Source: Own calculation based on Central Electricity Authority (2017): Installed capacity. http://www.cea.nic.in/reports/monthly/installedcapacity/2017/installed_capacity-05.pdf

- 40 -

Modeling a 100% Renewable Energy Scenario for China with

the Energy System Model ReMSYS based on wind and PV

Source: Own modeling results with ReMSYS..

0

2000

4000

6000

8000

10000

12000

14000

2015 2020 2025 2030 2035 2040 2045 2050

Ele

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y g

en

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tio

n [

TW

h]

- 41 -

Modeling a 100% RES Scenario for India with the Energy

System Model ReMSYS: Rising electricity demand met by PV

0

2000

4000

6000

8000

10000

12000

2015 2020 2025 2030 2035 2040 2045 2050

Ele

ctri

city

ge

ne

rati

on

[TW

h]

Source: Own modeling results with ReMSYS..

- 42 -

Hypotheses about India‘s future energy transformation

Hypothesis 1: Cheaper than expected renewables can satisfy India’s growing electricity demand

without any more added coal capacity than the power plants already under construction.

Hypothesis 3: A change in leadership (Prime Minister Narendra Modi) brought about a new vision

of a solar future, threatening the old fossil fuel based power structures in industries and politics.

Hypothesis 2: To create a successful Indian sustainability energy transition, the access of all

citizens to electricity and a drastic reduction of poverty are indispensable.

Hypothesis 4: The current complex energy sector governance hinders policy developments. The

transition will be led by state governments, and has to be fostered across classes and castes.

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Dramatic changes to China’s coal pathway with a big

uncertainty about future developments

• Electricity generated by coal peaked most likely in 2013, capacity factor of power plants was

below 50% in 2015 and 2016, coal accounted for 66% of total energy consumption in 2014

• China’s 13th Five-Year-Plan: maximum 58% share of coal in national energy consumption by 2020

• Increasingly low utilisation rate of coal plants, reaction by China’s National Energy Administration

and National Development and Reform Commission:

Suspension of new plant approvals in 13 provinces and regions

Ban on new coal mines from 2016-2018

A halt on construction in 15 provinces and regions

Exception for projects in poor areas and old revolutionary base areas

Plans to retire older coal power plants

• Coal power capacity cap of 1,100GW (921 GW installed as of January 2017; representing 47%

of global installed power capacity)

• Cancellation of 100 specific plant projects from September 2016 to January 2017 (Allowed

projects in 2015:142 GW, in 2016: 22 GW. Total pre-construction capacity in the pipeline: 134 GW

• Total amount of cancelled projects between 2010 and 2016: 203 GW.

• Additional 35 GW are under construction since 2016, 55 GW were put on hold since 2016.

Sources: Climate Action Tracker (2017a); Endcoal (2017a, 2017b); Isoaho (2016); Shearer et al. (2017).

- 44 -

China’s Nationally Determined Contribution (NDC)

• Commitment to peak CO2 emissions around 2030, “making the best effort to peak early”

• Lower carbon intensity of GDP by 60%–65% below 2005 levels by 2030

• Increase share of non-fossil energy carriers in total primary energy supply to ~20% by 2030

• Increase forest stock volume by 4.5 billion cubic metres compared to 2005 levels

• Total GHG emissions likely to continue increasing until 2030: no sufficient policies addressing non-

CO2 GHG emissions (CH4, N2O, HFCs etc.)

• => China’s Paris Agreement NDC is less ambitious than China’s current policies and its national

targets. The NDC is not in line with a fair share of the 2°C (or the 1.5°C) target

Sources: Climate Action Tracker (2017a); Government of China (2015); Coal Swarm (2017).

Note: The numbers tell the number of

generating units at each location.

- 45 -

Additional Info China (1/2)

• Most populated country globally, second largest economy in the world, second largest

concentration of poverty in the world, large-scale urbanization still ongoing

• Autocracy; main parties: Chinese Communist Party (CCP) and 8 other small parties controlled by

the CCP

• National Program on Climate Change, the12th and 13th Five-Year Plan for Energy Conservation

and Emission Reduction, the Action Plan for Energy Conservation, Emission Reduction and Low-

Carbon Development, and the National Plan on Climate Change (2014-2020).

• Mix of regulatory approaches, financial support and market-based mechanisms to promote

renewables; long-term feed-in tariffs for solar, wind and biomass

• Less than 1% of China‘s 500 largest cities meet WHO air quality standards

• Rising societal pressures on ruling elite due to air pollution and environmental degradation =>

Clear shift in energy policies since 2005: implementation of renewable energy law

• State Council (i.e. the central government) sets broad directions for renewable energy policy

development; ministries and departments draft specific policies

• Advisory and coordination role in energy issues established in 2007: National Leading Group on

Climate Change Energy Conservation and Emissions Reduction (NLGACCERCER);

members are leaders of the State Council and 20 key ministries

Sources: Government of India (2015); Isoaho (2016); Shearer et al. (2017).

- 46 -

Additional Info China (2/2)

• National Development and Reform Commission (NDRC): central role in climate policy and energy;

National Energy Administration (NEA) agency under NDRC responsible for renewable energy

policy formulation and implementation at the national level

• National Energy Commission (NEC): ‘super ministry’ in charge of drafting the national energy

development strategy

• => energy and climate change are located within the most influential agencies; implementation

remains nevertheless a challenge

• Regionally differing societal pressures: shut-down of plants in Inner Mongolia, pledges to build

power plants in inland provinces

• State council puts efforts on ‘clean coal’ and other fossil fuels: gasification, CCS, natural gas and

nuclear

• Lack in grid infrastructure

• China’s National Emissions Trading System to start in 2017

- 47 -

India and China in global Context

Source: Shearer et al. (2017).

- 48 -

Recent developments coal in China and India

Put on hold in

2016

On hold in total

(end 2016)

Put on hold, which was

already under construction

Active

construction

China 300 442 56 146

India no data 82 13 48

Coal capacities as of January 2017, in GW.


- 49 -

• Solar capacity especially strong in Gujarat, Rajasthan, Tamil Nadu and Madhya Pradesh (together

>60% of total capacity); dependent on solar radiation, coal availability and political feasibility

• Main barriers to renewable expansion: difficult finance environment (makes renewable projects

more costly than in other countries, political elites vested interests in fossil fuels, a corruption-prone

system requires bribes for new projects, difficult process of land acquisition for private companies

• The “discoms”, the state-government owned electricity companies, are highly indebted (electricity

theft, badly implemented subsidies and technical losses) and do not fulfill their renewable purchase

obligations, do not make necessary investments to integrate renewables and thereby scare away

investors of renewables

• Gujarat can be seen as a leading example for the transition away from coal => lessons to be

learned for other states on governance

• Split of electricity for agriculture from the rest, controls of necessity for subsidies,

stable political coalition

• The Indian population of very polluted regions do not protest against coal but instead against

higher environmental standards => because they are economically dependent coal and other

polluting industries

• :

Governance and regional differences

- 50 -

Recent developments coal in China and India

Put on hold in

2016

On hold in total

(end 2016)

Put on hold, which was

already under construction

Active

construction

India no data 82 13 48

Coal capacities as of January 2017, in GW.


- 51 -

India’s Nationally Determined Contribution (NDC)

• 40% non-fossil fuel capacity of installed power capacity by 2030 (~26-30% of generation;

conditional on the provision of resources by industrialised countries)

• Lower GDP emissions intensity by 33-35% by 2030 below 2005 levels (-20-25% by 2020)

• Additional cumulative carbon sink of 2.5-3 GtCO2e through additional forests by 2030

• Current policy developments:

• 175 GW installed renewable energy by 2022 (NDC pledge 100 GW). Despite rapid

expansion not enough to satisfy growing electricity demand

• 100 GW solar capacity by 2022

• Draft Electricity Plan: After 2022 no new coal capacity apart from the one already under

construction (48GW) needed

Sources: Climate Action Tracker (2017b); Central Electricity Authority (2016); Government of India (2015).

India’s NDC is less ambitious than current policies, both pathways

are not in line with the 2°C (or the 1.5°C) target

- 52 -

Additional Info India

• Solar power revolution: government proposal to install 215 GW renewables by 2027

• Estimated total CO2 emissions for 2021-22 and 2026-27 are 983 million t and 1,165 million t respectively

• Around 17.5% of the world population (second most populated country), around 363 million people (30% of the

population) live in poverty (largest concentration of poverty globally), around 24% of the global population without

access to electricity (304 million), about 30% of the global population relying on solid biomass for cooking and 92

million without access to safe drinking water, wide disparities amongst its people and regions.

• Democracy; 6 national, 49 state and >1700 unrecognized parties, strong autonomy of states in India

• Policy framework on environment and climate change: National Environment Policy (NEP) 2006: promotes

sustainable development along with respect for ecological constraints and the imperatives of social justice.

• National Action Plan on Climate Change (NAPCC): sharper focus on required intervention

• implemented through eight National Missions, outlining priorities for mitigation and adaptation to combat

climate change

• supplemented by actions of the State Governments, Non-governmental Organizations (NGOs), initiatives of the

private sector and other stakeholders. 32 States and Union Territories have State Action Plan on Climate

Change (SAPCC) including climate change concerns in their planning process.

• Energy Conservation Act encourages efficient use of energy and its conservation

• The National Electricity Policy (NEP) focuses on universalizing access to electricity and promoting renewable

sources of energy, as does the Integrated Energy Policy (IEP).

Sources: Government of India (2015); Shearer et al. (2017).

- 53 -

Additional Info Energy Market India

• Other policies include fiscal instruments like a coal tax, cuts in subsidies, increase in taxes on petrol and diesel,

market mechanisms including Perform Achieve and Trade (PAT), Renewable Energy Certificates (REC) and a

regulatory regime of Renewable Purchase Obligation (RPO).

• No great societal pressures regarding air pollution, although 13 of the 20 most polluted cities worldwide are in

India; poor population dependent on polluting industries for economic growth and job creation

• Federal level only partly responsible for energy policy-making, more the state governments‘ responsibility, nodal

state agencies responsible for implementation

• Various mechanisms to promote renewables: grants, tax incentives and generation-based incentives

• Fifth largest wind energy producer worldwide

• At COP21 Prime minister Modi launched the International Solar Alliance (120 states commit to install >1 TW of

solar power by 2030)

• Difficult finance environment in India, which makes renewable energy projects more costly than in other countries

• Corruption-prone political elite with vested interests in the fossil fuel industry

• Other major problems: electricity thievery, and long problematic process land acquisition

- 54 -

1) The Indian Energy Sector

2) Modeling approach & Input Data

3) Results

Agenda

- 55 -

Modeling approach & Input Data

Key Data

• A total of 10 regions is being considered.

• The years 2020 - 2050 are modeled in 5-year steps, with 2015 as a baseline.

• Existing capacities in 2015 are included as residual capacities in our model.

• Demands are fixed and based on IEA 450ppm (World Energy Outlook 2015) datasets.

Source: Own Illustration, based on Gulagi, et al. (2017)

- 56 -

India - Demands

0

5

10

15

20

25

30

35

40

2015 2020 2025 2030 2035 2040 2045 2050

Ex

ajo

ule

Power Low-temp. Heat High-temp. Heat

0

1000

2000

3000

4000

5000

6000

2015 2020 2025 2030 2035 2040 2045 2050

Gp

km

Passenger Transport Freight Transport

Power & process heat demands more than triple between 2015 and 2050.

Overall heavy increase of energy demands over the years.

- 57 -

• Sets:

y Year f Fuelt Technology m Mode of Operationr Region l Time Slice

• Objective Function

min 𝑐𝑜𝑠𝑡𝑠 =

𝑦

𝑡

𝑟

𝑇𝑜𝑡𝑎𝑙𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝐶𝑜𝑠𝑡𝑦,𝑡,𝑟 +

𝑦

𝑟

𝑇𝑜𝑡𝑎𝑙𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝑇𝑟𝑎𝑑𝑒𝐶𝑜𝑠𝑡𝑠𝑦,𝑟

𝑇𝑜𝑡𝑎𝑙𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝐶𝑜𝑠𝑡𝑦,𝑡,𝑟 = 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔𝐶𝑜𝑠𝑡𝑦,𝑡,𝑟+ 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝐶𝑎𝑝𝑖𝑡𝑎𝑙𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑦,𝑡,𝑟+ 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝑇𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑦𝐸𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑃𝑒𝑛𝑎𝑙𝑡𝑦𝑦,𝑡,𝑟− 𝐷𝑖𝑠𝑐𝑜𝑢𝑛𝑡𝑒𝑑𝑆𝑎𝑙𝑣𝑎𝑔𝑒𝑉𝑎𝑙𝑢𝑒𝑦,𝑡,𝑟

∀ 𝑦 ∈ 𝑌, 𝑡 ∈ 𝑇, 𝑟 ∈ 𝑅

Model Formulation – Objective Function

- 58 -

1) The Indian Energy Sector

2) Modeling approach & Input Data

3) Results

Agenda

- 59 -

100% Renewables Scenario

- 60 -

Development of Power Generation in PJ

Source: Own Illustration

0

2000

4000

6000

8000

10000

12000

2015 2020 2025 2030 2035 2040 2045 2050

TWh

- 61 -

100% Renewables – Heat low

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2015 2020 2025 2030 2035 2040 2045 2050

Pet

ajo

ule

Biomass

Solar Thermal

Heatpump

Oil

Coal

- 62 -

100% Renewables – Heat high

0

5000

10000

15000

20000

25000

2015 2020 2025 2030 2035 2040 2045 2050

Pe

tajo

ule

Biomass

H2

Electric Furnace

Gas

Oil

Coal

- 63 -

Development of Freight Transportation


0

500

1000

1500

2000

2500

3000

3500

2015 2020 2025 2030 2035 2040 2045 2050

millio

n f

reig

ht

km Rail Petro

Rail ELC

Road Conv

Road Bio

Road H2

Ship Conv

Ship Bio

- 64 -

India – Regional Power Production


- 65 -

India – Power Production per Timeslice w/ Storages


-1000

0

1000

2000

3000

4000

5000

2050 ID 2050 IN 2050 SD 2050 SN 2050 WD 2050 WN

TWh

- 66 -

Installed Capacity in 2050

- 67 -

Wind & PV Production Profiles, 2050

- 68 -

Trade Between Regions in 2050

- 69 -

450ppm Scenario

- 70 -

450 ppm - Power

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2015 2020 2025 2030 2035 2040 2045 2050

TWh

- 71 -

450ppm – Heat low

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2015 2020 2025 2030 2035 2040 2045 2050

Peta

jou

le

Biomass

Solar Thermal

Heatpump

Oil

Coal

- 72 -

450ppm – Heat high

0

5000

10000

15000

20000

25000

2015 2020 2025 2030 2035 2040 2045 2050

Peta

jou

le

Biomass

Electric Furnace

Gas

Oil

Coal

- 73 -

Global CO2 Emissions per Energy Carrier in billion tons –

0% fossil fuels in 2050


0

500

1000

1500

2000

2500

3000

2015 2020 2025 2030 2035 2040 2045 2050 2015 2020 2025 2030 2035 2040 2045 2050 2015 2020 2025 2030 2035 2040 2045 2050

100percent 450ppm newpolicies

Coal

Gas

Oil

- 74 -

Source: Oei, et al.(2014).

Germany‘s national GHG reduction target implies further measures…

0

200

400

600

800

1.000

1.200

1.400

GH

G E

mis

sio

ns

in

Me

ga

ton

s C

O2

eq

uiv

.

Non-ETS-Sector

EU-ETS

Coal_Non_ETS

Coal_ETS

Lignite_Non_ETS

Lignite_ETS

2050 target*:

- 80-95%

2020 Ziel*:

- 40%

2030 target*:

- 55%

*) Base line: 1990

Trend of the last years:

emissions going up!

- 75 -

Rhine

basin

Helmstedt basin

LusatiaCentral Germany

Power plant

Mining site

Lignite power plant

capacities built

[GW]

before

1980

1981-

2000

after

2001

Rhine basin 7 0.3 3

Helmstedt basin – 0.3 –

Central Germany – 3 –

Lusatia 1 6 0.6

Lignite in Germany

The electricity sector is responsible for

~40% of GHG emissions in Germany

• ~50% lignite power plants; of which

>50% built before 1990 (esp. in NRW).

• ~33% hard coal power plants; of

which 50% built after 2000

Effect of electricity prices below 30

€/MWh:

• Old hard coal power plants are shut

down for economic reasons

• Political measures could regulate

which power plants are closed down:

• Lignite power plants

• Newly built hard coal power plants

• Gas fired power plants

- 76 -

No need for new lignite mining pits in Germany;

constitutional conformity of new fields are being contested

Projected fields and Displacements :

Welzow Süd II (~210 Mio. t CO2 / 800 inhabitants)

Nochten II (~300 Mio. t CO2 / 1,700 inhabitants)

Jänschwalde Nord (~270 Mio. t CO2 / 900 inhabitants)

(Vision: Bagenz-Ost and Spremberg-Ost)

Exproprietation (relocalisation of inhabitants):

o Public interest needed for legality of new fields

o Energiewende: neither public interest nor necessity

o Possibility to sell electricity from lignite is not a reason

to justify expropritations

- 77 -

1. Standard to be respected at any moment (plant-specific limit per kWh)

• Prevents construction of new coal power plants (without CO2 capture)

• Discussed in USA for new-built, in force in Canada as of mid-2015

2. Limit of annual emissions

• Can incentivize emission reductions of existing power plants

• In force in the UK since 2013

Different instruments to reduce CO2 emissions are discussed;

among them emissions performance standard (EPS)

ELMOD: Introduction of a German EPS that

uses a gas power plant (450 gCO2/kWh)

as benchmark to achieve Germany´s

climate targets:

• limit annual emissions of all plants (EPS)

• only those older than 35 years (EPS 35)

- 78 -

Climate and energy policy has various proven instruments at hand to

account for external effects of electricity generation from fossil fuels.

Research Question

• Examining current trends of the German energy market with respect to

their compatibility with climate targets. Identifying additional instruments

besides a reform of the EU-ETS.

Publications

• Chapter in the book Energiewende (forthcoming)

• DIW Economic Bulletin, Wochenbericht,

Politikberatung kompakt (2012-2015)

• Newspaper articles (2014-2015)

Main Findings

• Coal-based power generation puts climate targets at risk.

• A market-driven transition from coal to gas is unlikely to occur in the near

future. Additional instruments could be a CO2 floor price, minimum

efficiency levels and flexibility requirements, a coal phase-out law,

emissions performance standard, capacity mechanisms or a strategic

reserve for coal plants, a climate contribution fee or reduced transmission

grid expansion

- 79 -

Share of rising renewables lead to new job opportunities

Quelle: BMWI (2013) & BDEW (2014), Daten für 2014 sind auf Basis des ersten Halbjahres geschätzt: German Ministry of Economy and Energy (BMWI).[1]

0%

5%

10%

15%

20%

25%

30%1990

1991

1992

1993

19

94

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

20

07

2008

2009

2010

2011

20

12

2013

2014

9 105

14

2

12 13

5

26

4

3 2 0 1 0

63

0

8

0

50 0 0 0

61 0 1 0

5 6

0

7

1

8

1 0

6

0

32

40

16

2

1711

1

17

4

52 0

51

1 0 0 1 0

5 50

61

124 0

80

9

1 05

0

2 40

50

- 80 -

Comparing number of jobs in the coal and renewables sector

0 50 100 150 200 250 300 350 400 450

1998

2002

2004

2008

2010

2013

Beschäftigte in Tausende

BK - Tagebau

BK - Kraftwerke

SK - Bergbau

Erneuerbare

Die Lignite sector used to employ more than 150000 people in 1980. The hardcoal industry in the 1950s-60s employed 500000 people.

Source: Own depiction based on Ulrich und Lehr (2014) and Statistik der Kohlewirtschaft (2015).

- 81 -

Average age in the lignite sector: 75 % are aged over 40

0%

5%

10%

15%

20%

25%

30%

Source: Own depiction based on Statistik der Kohlewirtschaft (2015).

- 82 -

Lignite and hard coal production and imports in Europe (2015)

So

urc

e: E

ura

co

al(2

01

6)

- 83 -

Structure of Power Generation in selected EU-Countries (2013)

So

urc

e: E

ura

co

al(2

01

5)

- 84 -

Upcoming “Coal Reserve“ in Germany

Notification 11 days ahead; overall payments of 1.6 billion €

Owner Unit Power

[MW]

Age in

2020

Start of reserve

(shut down

after 4 years)

Particularities

Mibrag /

EPH

Buschhaus 352 35 10 / 2016 Plant was moved into reserve already in

September as the mining site was fully exploited

RWE Frimmersdorf P 284 54 10 / 2017 Last 2 (out of 8) units; facing economic

problems for several years.Frimmersdorf Q 278 50 10 / 2017

Niederaußem E 295 50 10 / 2018 Were already listed in the official list of expected

closures „Kraftwerksliste Bundesnetzagentur

zum erwarteten Zu- und Rückbau 2015 bis

2019“ with the closing date 2019

Niederaußem F 299 49 10 / 2018

Neurath C 292 47 10 / 2019 Similar efficiency factors as other 300 MW units

Vattenfall

/ EPH

Jänschwalde E 465 33 10 / 2018 Most recent units at the site Jänschwalde (start

of operation of the 6 units 1981-1989); it is

sometimes easier to start shutting down the last

units first.

Jänschwalde F 465 31 10 / 2019

Quelle: Eigene Recherchen basierend auf Daten der Bundesregierung, der BNetzA und Webseiten der Unternehmen

- 85 -

Longterm trends of CO2 emissions in Germany until 2035

The results show that the long-term decline of German CO2 emissions (301 Mt in 2014). The

green scenario resembles a faster coal phase-out by additionally restricting the full load

hours of coal power plants (e.g. due to limited coal reserves or an additional climate levy),

while the black scenario is a moderate business-as-usual (BAU) scenario.

The results are also influenced by developments in neighboring states. It is therefore in the

interest of Germany that other neighboring countries also take action and complement the

EU-ETS with national instruments to enable a generation portfolio in line with the European

climate targets (Visions 3 & 4).

127

136

120

110

119

127

115

107

100

105

110

115

120

125

130

135

140

Vision 1 Vision 2 Vision 3 Vision 4

CO

2-E

mis

sio

ns

in

Mt

black

green

- 86 -

The Role of Coal for Power Generation in Europe 2013

So

urc

e: E

ura

co

al(2

01

4)

- 87 -

The Phasing-Out of Coal is Politically Unanymous:

Different additional instruments are under discussion

PROPOSED MEASURE EXPECTED EFFECT POSSIBLE ADVANTAGES POSSIBLE SHORTCOMINGS

Forbidding new lignite

mines

Terminating current plans for new minings

sites in Eastern Germany

No displacements of villagers; no retrofits for

lignite power plants; investment security for

all affected people

No effect for regions with sufficient already

granted mining rights

Closing existing lignite

mines

Reducing mining volumes of active mines

in North-Rhine Westfalia (NRW)

Concentration on one mine (instead of three)

reduces fixed costs and less displacements;

overall volumes insufficient for entire lignite

fleet leading to some clusures

Does not necessarily hit the oldest inefficient

power plants first

EU-ETS reform Price signal through the introduction of

market stability reserve (MSR); additional

measures: 900 mn EUA from backloading

directly in MSR, start of MSR in 2017

instead of 2021

EU-wide instrument; thus, no cross-border

leakage effects

targets several sectors besides electricity

Structural reforms uncertain from today's

perspective; the extent of the impact is

unpredictable due to high surplus of certificates

CO2 floor price CO2 certificates would become more

expensive

Investment security for operators Feasible prices probably too low to result in a

switch from lignite to natural gas in the short term

Minimum efficiency Closure of inefficient power plants More efficient utilization of raw materials Open cycle gas turbines (OCGT) could also be

affected; complex and time-consuming test and

measurement processes

Flexibility requirements Closure or singling out of inflexible power

plants

Better integration of fluctuating renewable

energy sources

Combined cycle gas turbines (CCGT) could also

be affected; complex and time-consuming test

and measurement processes

Coal phase-out law Maximum production [TWh] or emissions

allowances [tCO2] for plants

Fixed coal phase-out plan & schedule

investment security

Outcome of auctioning of allowances would be

difficult to predict

Emissions performance

standard (per unit; for

Restrictions for new plants and retrofits

(without CO2 capture) [< x g/MWh]

Prevention of CO2-intensive (future

stranded) investments

Minor short-term reduction in emissions

- 88 -

Reductionof nuclear

energy

Share of RenewableEnergy

ReductionGHG-

Emissions

Reduction of Energy Demand

Gross final energy

ElectricityProductio

n

Primary Energy

DomesticHeat

Final Energy

Transport

ElectricityDemand

201520172019

-47%-56%-60%

2020 18% 35% -40% -20% -20% -10% -10%

202120222025

-80%-100%

40-45%

20302035

30% 50%55-60%

-55%

2040 45% 65% -70%

2050 60% 80%-80% bis

95%-50% -80% -40% -25%

Basis 2010 - - 1990 2008 2008 2005 2008

Source: Own Depiction based on BReg (2010, 2011, 2013)

„Energy Transformation“ in Germany (Energiewende)

- 89 -

**) CCGT: Combined Cycle Gas Turbine

OCGT: Open Cycle Gas Turbine

Lignite power plants are not flexible enough for an electricity

system with a high share of renewable sources

Lignite CCGT** OCGT**

Change of load[%Pmax

p. minute]1 / 2,5 / 4 2 / 4 / 8 8 / 12 / 15

Hot start-up

(<8h)[h] 6 / 4 / 2 1,5 / 1 / 0,5 < 0,1

Cold start-up(>48h)

[h] 10 / 8 / 6 4 / 3 / 2 < 0,1

Source: Agora Energiewende (2014).

Source: VDE (2012)*

*) Read data as follows : „current power plants / state of the art / optimization potential“

- 90 -

… including a coal phase-out probably until 2040

Germany risks missing the -40% GHG reduction target until 2020 (base: 1990).

This is why additional national instruments, employed alongside the EU ETS, come into play

and are currently discussed by all relevant actors.

Official projections by the Federal Network Agency / Bundesnetzagentur (BNetzA) include a

reduction of lignite capacities from 21,2 GW in 2013 to 12,6 GW in 2025.

Resulting emission targets for the electricity sector are 187 Mt CO2 (2025) and 134 Mt CO2

(2035) compared to 317 Mt CO2 in 2014.

This implies a decarbonization of the electricity sector and a coal phase-out. Barbara

Hendricks (Federal Minister for the Environment) and the German Advisory Council on the

Environment (SRU) target the year 2040.

- 91 -

Planned reserve of lignite capacites

The current proposal includes moving 2,7 GW of lignite capacity into a “lignite reserve”

• three times 0,9 GW in 2017, 2018 and 2019

• each block is shut down completely after four years in the reserve

The reserve of 2,7 GW include

• 1 GW of lignite capacity in Lusatia (2 blocks of Jänschwalde) by Vattenfall and the

• power plant Buschhaus (350 MW) in Central Germany which was recently bought by Mibrag

(owned by EPH)

• 1,5 GW of lignite capacity run by RWE in North Rhine-Westphalia (NRW)

- 92 -

Economic Risks for utilities:

Significantly reduced profitability for old and newer plants

Current Phelix Futures:

2017: EUR 24,05

2018: EUR 23,90

2019: EUR 24,00

2020: EUR 25,20

Development of Phelix Future (Phelix: physical electricity German wholesale power price)

Source: EEX, May 2016

- 93 -

Technical and Environmental Risks:

Iron Ocre: Threat for aquatic life and tourism in the Spreewald

Source: RBB

Source: www.reiseland-brandenburg.de

Source: dapd

- 94 -

Comparing jobs in lignite (BK) & renewables (EE) in affected

regions in Eastern Germany

Source: Own depiction based on Ulrich und Lehr (2013) and Statistik der Kohlewirtschaft (2013).

0

5000

10000

15000

20000

25000

30000

Indirekte Jobs

Jobs

Climate measures lead to additional annual investments of 15 – 30 billion € in Germany. Meeting the

2020 climate targets would result in additional:

• 50.000 – 200.000 new jobs

• economic increase of 20 – 40 billion €.

- 95 -

Kohlelieferungen aus Mitteldeutschland nach Tschechien

2012 sind 160.000 t als

Probelieferung aus dem

Mitteldeutschen Revier nach

Tschechien geliefert worden.

„Das tschechische Kraftwerk hat mit

der mitteldeutschen Kohle

funktioniert.“

Das tschechische Kraftwerk

Opatovice befindet sich 100

Kilometer östlich von Prag und

ist ungefähr 300 km vom

Mitteldeutschen Revier entfernt

Bei einem Interesse aus Tschechien

kündigte Mibrag-Chef Joachim

Geisler an, werde man auch

weitere Kohle zukünftig dorthin

liefern. Dies wären dann deutlich

größere Lieferungen.

In 2015 bestätigte die Mibrag, dass

keine weitere Transporte nach

Tschechien geplant sind.

- 96 -

Es gibt keinen Bedarf für neue Tagebaue in der Lausitz

Darstellungen basierend auf eigenen Berechnungen

0

40

80

120

2013 2030 2042

Jänschwalde

0

100

200

300

400

2013 2030 2042

Welzow-Süd I0

100

200

300

400

2013 2030 2042

Nochten I0

5

10

15

20

2013 2030 2042

Cottbus-Nord

0

100

200

300

400

2013 2030 2042

Reichwalde

- 97 -

Das Braunkohlegebiet in NRW besitzt die größten Reserven

Quelle: Eigene Darstellung

- 98 -

Die Braunkohle aus dem mitteldeutschen Revier wird bis zu 150

km transportiert

0

2

4

6

Profen

0

2

4

6

8

10

12

Ver. Schleenhain

0

1

2

3

4

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

29

20

30

Profen

Schöningen

0

100

200

300

2013 2030 2040

Restmenge Profen [mio. t]

0

100

200

300

2013 2030 2040

Vereinigtes Schleenhain

KW Mumsdorf wurde 2013

nach 45 Jahren abgeschaltet

Belieferung KW Schkopau [mio. t/a]

Belieferung KW Lippendorf [mio. t/a]

Belieferung KW Buschhaus [mio. t/a]

- 99 -

E.ON verkauft das Helmstedter Braunkohlerevier an MIBRAG

Im September 2013 hat E.ON den Verkauf des Helmstedter

Braunkohlereviers bei Braunschweig an die Mibrag angekündigt.

Der Verkauf umfasst den Tagebau Schöningen mit allen

bestehenden Rückbau- und Rekultivierungsverpflichtungen

sowie das Kraftwerk Buschhaus.

Die Veräußerung ist Teil einer Umstrukturierung. E.ON trennt sich

auch von Anteilen des Gazprom-Konzerns, von Regionaltöchtern

und vom Gasnetzbetreiber Open Grid Europe, um zusätzliche

Erlöse zu erzielen.

Das Kraftwerk Buschhaus wurde 1985 in Betrieb genommen und hat

eine Brutto-Leistung von 390 MW. Ursprünglich war die

Stilllegung des Kraftwerkes zum Jahr 2017, gemeinsam mit dem

Auslaufen des Tagebaus, geplant.

Die Mibrag will Buschhaus ab 2014 bis 2030 hauptsächlich mit Kohle

aus dem 150 km entfernten mitteldeutschen Revier aus bereits

genehmigten Braunkohlefeldern weiterbetreiben.

Durch den Aufkauf des Kraftwerks bleiben ca.120 Arbeitsplätze am

Standort Buschhaus in Niedersachsen erhalten.

Es gibt jedoch auch Kritik an einer verstärkten Auskohlung der

Tagebaufelder zu Gunsten niedersächsischer Arbeitsplätze.

- 100 -

Investments in fossil fuels to decline on a global scale

Quelle: Extract from figure SPM.9 of IPCC Working Group III report 2014, p. 30

- 101 -

Carbon Capture, Transport, and Storage (CCTS) stellt auf

absehbare Zeit keine Option für die Dekarbonisierung dar

No EU-funding

through NER-300

Longannet

(UK, 1 bn. £)

No CO2-priority

infrastructure

projects

Mongstad

(Norway)

0 finished,

10 delayed,

9 canceled

projects

19.10.2011

Jänschwalde

(De, Vattenfall)

05.12.201108.12.2010

Hürth

(De, RWE)

"Ob [CCS] in Deutschland

zur Anwendung kommt ist

eher zweifelhaft. [...]“

18.12.2012

14.07.2012

14.10.2013

20.09.2013

Source: Own illustration based on Tagesspiegel (2010), BBC (2011), Märkische Rundschau (2011), Vattenfall (2011),

Bundesregierung (2012), EC (2012), Bellona (2013), EC (2013), GCI (2013), EUWID (2014), BBC (2015); GCCSI (2011, 2015).

27.01.2014

Schleswig-Holstein

(De) forbids CO2-

storage

25.09.2015

Drax pulls out of White

Rose project (UK)

15.12.2015

- 102 -

Lignite power plants are not flexible enough for an electricity

system with a high share of renewable sources (2/2)

Fraunhofer ISE (2013).

- 103 -

A Vision for the Future ??? (Train Station in Welzow, Sep. 2014)

- 104 -

70-90% of coal, 30-60% of gas and 30-60% of oil reserves has to

stay under the ground, even if available

(*) http://www.nature.com/nature/journal/v458/n7242/full/nature08017.html

Potsdam Institute for Climate Impact Research (PIK): 2°C target corresponds to 890 Gt CO2 (*):

Source: IPCC SRREN(2011), fig. 1.7

- 105 -

The CCS-Illusion: Pilot Plant in Jänschwalde cancelled on Dec.

5th 2011

- 106 -

Development of the CCS Projects since 2011

?

??

?

?

???

cancelled.

delayed?

??

Source: Own depiction based on GCI (2011, 2013) and MIT (2014).

- 107 -

Phasing-out Coal is Economically „Efficient“:The social costs of lignite, including externalities, are way above the revenue!

0

2

4

6

8

10

12

Wholesale price (2014) FÖS (2012) AEE (2011) DIW Berlin & Fh-ISI (2010)

Co

sts

/ P

ric

e [

ct/

kW

h]

External costs of lignite according to different studies compared to the current electricity price in Germany

- 108 -

Vattenfall’s hybrid structure: Lignite dominates German business

0

10

20

30

40

50

60

70

80

90

SE FI DK DE NL UK

Pro

du

ced

Ele

ctri

city

in 2

01

3 [

TWh

]

Biomass

Wind

Oil

Hard Coal

Gas

Hydro Power

Nuclear

Lignite

- 109 -

Vattenfall‘s CO2 reduction target

Source: Own depiction based on Vattenfall (2014), Thru.de (2014).

65

4,1 4,18,4 8,4

10,4 10,4

60,3

42,2

0

20

40

60

80

100

VattenfallEmissions

2012

Possiblesolution

2020

Target 2020

Em

iss

ion

s in

Me

ga

ton

s C

O2

pe

r ye

ar

GER lignite

GER non-lignite

NL

DK

Target

„A cornerstone of Vattenfall´s long-term strategy is to reduce negative exposure to rising CO2 prices

by reducing emissions from the Group´s portfolio […]”

(Vattenfall Annual and sustainability Report, 2013)

Jänschwalde 2012:

24.8 Mt CO2

Boxberg 2012:

15.9 Mt CO2

Lippendorf 2012:

5.3Mt CO2 (Share Vattenfall)

Schwarze Pumpe 2012:

12.8 Mt CO2

*

*) Total CO2 emissions 2013 have risen to 88.4 Megatons

- 110 -

How to get rid of 15 Mt of CO2?

Source: Vattenfall Annual and Sustainability Report 2013

- 111 -

Überführung von Braunkohlekraftwerken in die

Sicherheitsbereitschaft / „Kohlereserve“

Quelle: Eigene Recherchen basierend auf Daten der Bundesregierung und der BNetzA

900 MW

350 MW

1.500 MW

Summe: 2.700 MW

0

5

10

15

20

25

30

>0 >5 >10 >15 >20 >25 >30 >35 >40 >45 >50 >55 >60

Kra

ftw

erk

sp

ap

azit

ät

Bra

un

ko

hlk

raft

we

rke [

GW

]

Anlagenalter in Jahren

Lausitzer Revier

Mitteldeutsches Revier

Rheinisches Revier

Buschhaus/MIBRAG (350 MW)

Jänschwalde/Vattenfall (900 MW)

„300-MW-Flotte“

(Frimmersdorf/Niederaußem/Neurath)/

RWE (1.500MW)

- 112 -

„Kohlereserve“: Technische Anforderungen und wer

bekommt/zahlt wieviel

Technische Anforderungen:

Startbereit innerhalb von 10 Tagen

+ 11 Stunden bis zur Mindestteillast

+ 13 Stunden bis zur Nettonennleistung

Kosten:

Jährlich 230 Millionen € für sieben Jahre

1,6 Milliarden € Gesamtkosten

Kraftwerke sind jeweils vier Jahre in Reserve

150 Mil. €/Jahr pro GW = 150.000 €/MW

≈ Erlöse am Strommarkt – Variable Kosten

Kosten werden über eine Erhöhung des Netzentgeltes um 0,05 Cent/kWh umgelegt.

Vom Netzentgelt befreite Akteure sind somit nicht betroffen.

Vereinbarkeit mit EU-Beihilferecht: Es gab Gespräche mit der Europäischen Kommission.

Ergebnis bei einer möglichen Klage unklar.

Quelle: Eigene Recherchen basierend auf Daten der Bundesregierung, der BNetzA und Webseiten der Unternehmen

- 113 -

Fazit zu regulatorischen Ansätzen für eine Dekarbonisierung

der Stromerzeugung

Zur Erreichung des Klimaschutzziels 2020 (-40% weniger THG ggü. 1990) und auch für die

langfristigen Klimaziele sind u.a. zusätzliche Maßnahmen im Stromsektor nötig.

Die „Kohlereserve“ von 2,7 GW Braunkohlekapazitäten (mit anschließender Schließung) ist ein

erster Schritt in Richtung Dekarbonisierung des Stromsektors.

In Bezug auf das Treibhausgas-Minderungsziel 2020 wird der Effekt gering ausfallen, für einen

echten Beitrag ist die Reserve zu klein.

Die Einigung stellt eine teure „Abwrackprämie“ dar, die insb. von den Haushalten finanziert

wird; ein Teil der Anlagen würde in den 2020er Jahren größtenteils ohnehin abgeschaltet.

Überprüfung im Jahr 2018, (wo erst 1 GW in der Reserve ist,) ob durch die Klimareserve die

geplanten 12,5 Mil. t CO2 – im Vergleich zum Basisszenario – eingespart werden.

Möglichkeit des Nachsteuerns, zur Erreichung der Reduktionsziele für 2020.

Die Einführung von anderen diskutierten Optionen wie dem ursprünglichen Klimabeitrag oder

CO2-Grenzwerten wären für eine Dekarbonisierung des Stromsektors besser geeignet.

Über Umweltauflagen sind weitere regulatorische Ansätze zur Dekarbonisierung des

Stromsektors abbildbar. Hierbei sind insb. die Europäische Wasserrahmenrichtlinie bzgl.

Quecksilber und die Umsetzung der IED RL bzgl. der NOx und SO2 Grenzwerte zu nennen.

Die Kosten der technischen Nachrüstungen verteuern die Kohleverstromung und können

im Einzelfall zur Unrentabilität von alten ineffizienten Anlagen führen.

the future of colombian coal exports international steam coal … · 2017. 9. 27. · our research...

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