Energy crisis boosts coal demand and production

Soaring natural gas prices and international fuel demand have boosted a request for thermal coal for power generation this year as supplies from Russia have been partially cut off and many countries are looking for replacements and cheaper alternatives.

There are countries reopening suspended coal-fired plants to get through the winter, while others are ramping up production to profit from exports.

In Austria, for example, back in the summer, the government agreed with the utility company Verbund to convert a gas-fired power plant to coal in case of an energy emergency.

At that time, back in the spring of this year, both Bosnia and Herzegovina approved a plan to extend the life of the Tuzla-4 and Kakan-5 coal-fired thermal power plants by the end of 2023.

The Danish company Orsted continued the operation of several oil and coal-fired power plants.

Also, Finnish energy company Fortum intends to add 560 megawatts (MW) of Nordic electricity capacity after October by starting a shutdown coal-fired power plant on the west coast.

Meanwhile, the French coal-fired power plant Emile Huchet began operation in early October, half a year after closing.

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And in Germany, two decrees were adopted to extend the operation of large coal-fired power plants.

Greece’s DESFA reported last month that the country’s energy crisis will keep seven coal-fired power plants operating longer than previously planned.

In the Netherlands, the energy minister said in June that the country would lift production cuts at coal-fired power plants to save gas.

North Macedonia has postponed the closure of its coal-fired power plants and aims to open two new coal mines to supply power plants.

The British National Grid has agreed contracts with electricity producers Drax Group and EDF Energy, part of EDF, to extend the life of four coal-fired power units at two power plants.

Amid the energy crisis, European countries trying to find an alternative to Russian coal imported 40% more coal from South Africa in half a year than in all of 2021.

Tanzania expects coal exports to double this year to around 696,773 tons, with production up 50% to around 1.365 million tons.

Also, Australia’s resource and energy export earnings are projected to grow by 7% to A$450 billion ($290 billion) this fiscal year. Since mid-2022, Australian coal has been heading more towards Europe rather than India.

Indonesia, one of the world’s largest coal exporters, said it could increase production to meet countries’ demand.