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Analysis: German coal imports to rise despite green lobbying
September 2, 2010 / 12:52 PM / in 7 years

Analysis: German coal imports to rise despite green lobbying

FRANKFURT/LONDON (Reuters) - Germany’s coal imports look set to increase until at least the middle of the decade, despite carbon pollution concerns and anti-coal lobbying that has succeeded in stopping many new coal-fired projects.

<p>A worker walks through a coal pile at a mining site in Berau at the Indonesia's East Kalimantan province August 12, 2010. REUTERS/Yusuf Ahmad</p>

Coal supplies 42 percent of German power, and as the economy accelerates, steelmakers and utilities are stepping up their use of imported coal.

Some new coal-fired power capacity is still starting up and needs firing over its long lifetime.

“Germany can only maintain its industrial activity in the recovery with competitively priced power,” and coal imports are easily available and do not involve taxpayer subsidies, said Wolfgang Ritschelm the managing director of hard coal importers lobby VdKI.

“For a number of years it looked as if there were no new coal-to-power plants possible, but the fact is that some 8,300 MW are under construction to replace old units,” he added.

The increase in imports to fuel this capacity will come in the form of hard coal, which is already mainly imported.

European Union law demands that subsidized German hard coal mines close by 2018 at the latest.

Meanwhile, the contribution from indigenous brown coal, which accounts for 24 percent of power generation, is fixed and not negotiable, because it is cheap and the local mines create jobs.

FORECASTS

One of the big four utility companies shared its internal projections with Reuters. It estimated German hard coal imports for power generation would go up to 33 million tonnes this year from 31 million in 2009, which was a post-war low as the global financial crisis cut imports by 4 million tonnes from 2008.

The company, which did not wish to be identified, expected imports to rise to 50 million tonnes by 2013 as domestic mine production, which was 13.8 million tonnes in 2009, drops to just 5 million.

French bank Societe Generale supplied to Reuters forecasts from its research team, which showed a similar trend.

It forecast that German thermal coal consumption, which counts both coal types and coal usage in and outside of power generation, would increase to 138 million tonnes by 2015 from 129 million in 2009.

Manufacturers are likely to rev up their power usage in coming years, and power consumption should rise due to expanding requirements for information technology and to big plans for electric cars.

Over the medium term, all these factors outweigh headline-grabbing opposition to coal, which has killed seven projects over the past 18 months.

“Stop new coal projects,” says the Klima-Allianz of Berlin, a caucus tying together 100 anti-coal groups, which argue that coal projects are backwards-looking and climate-harming.

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