German coal imports could fall 12% in 2018, trumped by green power

reuters.com Import & Export,  International 2018-07-20 17:51:00

Germany's hard coal imports may fall for the third year in a row this year and by 12% from 2017 levels, importers group VDKi forecast on July 19, citing competition from renewable energy.


The group forecasts imports of 45 million tonnes in 2018. Total imports of 51.2 million tonnes in 2017 were already down 10.2% from a year earlier, and well below a full-year prediction for 2017 of 54.6 million made by VDKi a year ago.


The fall came due to preferential access to networks for weather-driven solar and wind power, whose capacity is growing.


Some 70% of the coal imported in Europe's biggest economy goes to power utilities, a quarter to steelmakers and the remainder to heat providers, influencing global coal trade flows and prices at landing ports.


"There will be further bad months for power generation in 2018 so that we see a 6 million tonnes decline," said VDKi managing director Franz-Josef Wodopia at a news conference.


"We do expect a further positive trend for coal usage in the steel industry, but there is uncertainty surrounding the trade conflict with the U.S. in that sector," he added.


Power generation based on coal declined 20.9% year on year in the first four months of 2018, he said, as renewables again benefitted from favorable wind and sunshine patterns, which boosted yields.


Consequently, just-in-time coal imports monitored by some 70 VDKi members dropped by 19.2% year on year in that period, and losses in May could even have amounted to 30%.


Data from Germany's utility lobby BDEW showed renewables accounted for 36.3% of Germany's total generation volume in Jan-June, hard coal for 12.6%, and brown coal from domestic mines for 22.5%.


Coal-to-power is still a backbone for the energy system because it provides supply when intermittent renewables do not produce, a task that will become more urgent once Germany exits stable nuclear power generation by 2022.


Like BDEW, the coal group complained that climate policies by the Berlin government threaten the carbon-polluting industry unilaterally, in order to seek emissions savings, while the transport and heat sectors have made far fewer savings, or even raised CO2 output.


A committee launched by Berlin to study the timetable for a coal exit would eye further power station closures although anti-coal policies had already resulted in a halving of coal-fired capacity between 1990 and 2018, Wodopia said.


Coal suppliers to Germany, including Russia, the United States, Colombia, South Africa and Australia, stand to lose.


(Writing by Becky Du  Editing by Tammy Yang)
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