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EIA raises 2021 coal consumption outlook

  • Market: Coal, Electricity
  • 10/11/20

The US Energy Information Administration (EIA) raised its outlook for coal consumption at US power plants in 2021 as higher natural gas prices are expected to result in fuel switching.

EIA expects the US electric power sector to consume 546mn short tons (495mn metric tonnes) of coal in 2021, up from an expected 443mn st this year, according to the agency's latest Short-Term Energy Outlook.

The agency raised its 2020 and 2021 coal-burn forecasts by 10mn st and 24mn st, respectively, compared with last month's report.

The agency now expects coal power this year to be 780bn kWh. That is 2.3pc greater than EIA projected last month but still down from actual coal generation of 959bn kWh in 2019.

In 2021, coal generation will rise to 963bn kWh, the agency projected today. EIA's forecast last month for 2021 was 917bn kWh.

Coal's share of total generation in the US is expected to climb to 25pc in 2021 from 20pc this year.

Natural gas generation in 2020 is expected to climb to 1,500bn kWh, up from 1,477bn kWh in 2019. EIA expects power plants to cut natural gas generation by 15pc next year to 1,274bn kWh.

Natural gas's share of generation is expected to fall to 33pc in 2021 from 39pc this year.

Renewable generation will total 763bn kWh in 2020 and account for 20pc of the US' generation fuel mix. It will then rise to 840bn kWh, or 22pc of the market, in 2021, still lagging coal. EIA previously projected renewable power would total 755 bn kWh in 2020 and 845bn kWh next year.

EIA expects overall power demand to climb by less than 1pc in 2021 to 3,876bn kWh.

Increased heating demand in early 2021 is expected to be offset by forecasts calling for fewer cooling degree days during the third quarter of next year, EIA said.

Generators will switch away from natural gas in 2021 as prices are expected to average $3.14/mmBtu for the year, up from an average of $2.14/mmBtu this year, EIA said.

To meet the increased power demand, coal production in 2021 is expected to climb to 627mn st, up from an expected 521mn st this year. EIA this month lowered its 2020 coal production forecast by 4mn st and raised its outlook for 2021 by 2mn st.

EIA's latest 2020 production forecast is 26pc lower than last year's coal output.

EIA lowered its outlook for coal exports this month. The agency expects thermal and metallurgical coal exports to total 63.6mn st this year, a 3pc drop from October's projection of 65.4mn st. Exports are expected to climb to 64.7mn st next year, down by 8.5pc from last month's forecast.


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21/02/25

German power industry split on capacity market design

German power industry split on capacity market design

London, 21 February (Argus) — Stakeholders in the German power market are divided on how best to implement a capacity market in Germany, or whether it is needed at all, Argus heard on the sidelines of the E-World conference in Essen last week. Instead of entertaining the "misleading" debate over centralised versus decentralised mechanisms, in which the government tries to "delegate accountability for security of supply", what is really needed is "centralised accountability with decentralised assets", Stefan Joerg-Goebel, senior vice-president for Germany at utility Statkraft, said. "The market should be centrally organised but technologies bidding into the market should include, for example, decentralised demand-side response and batteries," he said. But "only the state can really secure supply". Transmission system operator Amprion prefers a centralised capacity segment with a "local component" over the combined capacity market proposal, according to Peter Lopion, consultant in the firm's international regulation management and market development team. He emphasised the importance of knowing "when and where" power plants will come on line. Amprion also stressed that "incentives for grid-serving behaviour" are needed for batteries in particular . In contrast, a decentralised capacity market — not too dissimilar to that of France — is the "best solution" for Germany, although it would first need to adapt to the "German reality", Davide Orifici, director of public and regulatory affairs at energy exchange Epex, said. Such a system would "better help to integrate flexibility" and "further develop demand response", he said, adding that the impression that a centralised system would be simpler is "false". And a decentralised element is "crucial" to "fully leveraging the potential of the demand side", according to Jan Bruebach, managing director at utility MVV. Nevertheless, the addition of the centralised element would add "long-term security" and thus the German energy ministry BMWK's combined proposal is "fine". And while not specifying a particular design, "something at least similar to a capacity market" is important for security of supply and to "provide incentives to hold capacity on stand-by" during periods of low renewable generation, said Andre Jaeger, senior vice-president of product management at trading and risk management firm Ion Commodities. Kerstin Andreae of energy and water association BDEW agreed at a press conference that Germany "needs" the transition to a capacity market. But Peter Reitz, chief executive of energy exchange EEX, does not see the introduction of a capacity market in Germany as being essential. "The same effect can be achieved much more cheaply by introducing the obligation to deliver into the energy-only market," he said, although a decentralised market would "interfere the least with liquidity". And the introduction of a capacity market in Germany would be "costly", Andy Sommer, head of fundamental analysis and modelling at utility Axpo, said. The costs would probably be absorbed by grid operators and the state, and eventually offloaded on to end-consumers, he said. Energy ministry BMWK in August opened a consultation on the country's future power market system, with four options to finance controllable power capacities: a capacity-hedging mechanism through peak price hedging, a decentralised capacity market, a centralised capacity market, and finally, the ministry's preferred option of a "combined capacity market". Despite the deadline for member states to incorporate the EU-mandated electricity market design having passed on 17 January, the design will "probably" be implemented by the next government, BMWK deputy director Andre Poschmann said at an industry event last month . The capacity market question is likely to draw the most political attention after the federal election on 23 February, Joerg-Goebel said, adding that the successful continuation of the coal phase-out — which is currently an "uncomfortable issue" for market participants — can be "fixed" only with new capacity. And without a capacity mechanism, it will be "very difficult" to invest in new peak generation plants, Bruebach said, with Lopion adding that the coal phase-out is "dependent on" new capacity mechanisms. A bidding zone split would harm liquidity And the decision over whether to split Germany into multiple bidding zones remains a concern, with Argus having heard a general consensus that a bidding zone split would negatively affect liquidity in power trading. Larger price zones acting as a "larger mass" are better for liquidity, according to Reitz, citing the German-Austrian bidding zone split and subsequent reduction in Austrian power liquidity. A split would cause "disruption" to the entire market, owing to regulatory changes and the loss in liquidity, agreed Joachim Bertsch, senior business development manager at utility RWE, while Bruebach said it would "crush" liquidity, disadvantage smaller market participants and drive up costs for industries in the south of the country. While BMWK in August rejected the "reconfiguration" of the single German-Luxembourg bidding zone , the "pressure" to introduce multiple bidding zones will intensify if grid expansion does not, according to Joerg-Goebel, while Parasram said he believes "some form of split" will happen. By Bea Leverett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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US cites 'energy emergency' to expedite water permits


20/02/25
News
20/02/25

US cites 'energy emergency' to expedite water permits

Washington, 20 February (Argus) — President Donald Trump's administration is citing an "energy emergency" as the basis to fast-track nearly 700 water permits, including those tied to a tunnel for Enbridge's Line 5 pipeline, LNG infrastructure projects, solar farms and electric transmission lines. Trump declared a national energy emergency on his first day in office, unlocking permitting powers that are typically used in response to natural disasters. The US Army Corps of Engineers has subsequently reclassified hundreds of permit applications for review under expedited emergency procedures, in a move that environmentalists say they plan to challenge in court based on violations of the Clean Water Act and Endangered Species Act. "The Trump administration is planning to skirt legally-required review processes in order to fast-track permits for dirty energy projects under the guise of an energy ‘emergency'", Sierra Club policy director Mahyar Sorour said. The Corps is responsible for issuing water permits for projects that cross streams, rivers, wetlands and other water bodies. Issuing permits sometimes requires the agency to prepare a detailed environmental review that is open to comment and can take years to finish. The water permits classified for emergency treatment include a repair project for Sabine Pass LNG in Louisiana, dredging for Elba Island LNG in Georgia, temporary construction related to Port Arthur LNG in Texas, solar projects in dozens of states, and pipeline projects ExxonMobil is pursuing in Texas. Enbridge delayed construction of a protective tunnel for its Line 5 pipeline to 2026 because of water permitting delays . But environmentalists say the administration cannot cite an energy emergency — which they say does not exist — as justification to bypass permitting rules prescribed by the US Congress. The Corps has also provided emergency treatment to projects with no apparent connection to energy production, such as a housing project in southern California and a gold mine in Idaho, according to an online database. The Corps did not respond to detailed questions but said it was "in the process of reviewing active permit applications relative to the executive order." Congress is continuing to lay groundwork for a bipartisan permitting bill that supporters say could make it faster and cheaper to build pipelines, power plants, electric transmission lines, renewable energy projects and transportation infrastructure. But Democratic leaders are threatening to vote against such a bill so long as Trump continues to "pause" billions of dollars in funding for clean energy projects provided by the Inflation Reduction Act and other laws. "Until the administration shows it will honor its oath to faithfully and impartially execute the laws, we can have zero confidence that any legislative compromise on permitting reform will be executed lawfully," US senator Sheldon Whitehouse (D-Rhode Island) said at a permitting hearing on 19 February. Oil industry and renewable groups are continuing to push for a comprehensive permitting bill, which they say would bring down project costs and help the US meet surging electricity demand from data centers and manufacturers. Permitting changes are "needed for all technologies, and they are needed to meet our energy demand in the future," Business Council for Sustainable Energy president Lisa Jacobson said. "You can't walk away from those facts or that imperative." By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Low water likely to persist at St Louis into March


19/02/25
News
19/02/25

Low water likely to persist at St Louis into March

Houston, 19 February (Argus) — Low water conditions are expected to persist at St Louis harbor on the Mississippi River through March, causing barge loading issues for both carriers and shippers. Minimal precipitation coupled with increased ice formation along the harbor decreased water levels to -3.3ft on 19 February at St Louis, according to the National Weather Service (NWS). Some terminals at the harbor have been unable to load and unload barges because of the low water. Carriers expect this to become a larger issue when barges carrying northbound products reach St Louis in March. Although low water has been an issue at the harbor since early January, more barge carriers and shippers began to prepare for slipping water levels when grain barge movement picked up later that month. Some barge carriers have reduced the amount of product placed in barges in order to keep drafts from dipping below 9.6ft this week. Low water levels are anticipated to remain through 4 March, which may hinder barge loadings and increase delays at St Louis. St Louis has received less than an inch of rainfall over the past seven days, according to the NWS. There has been even less precipitation upriver in the Northern Plains over the past week. Larger ice formations have appeared in the harbor on account of freezing conditions. The city of St Louis is under winter weather advisory, and is forecast to receive 1-3in of snow between 18-19 February, according to NWS. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Trump asserts power over independent agencies


19/02/25
News
19/02/25

Trump asserts power over independent agencies

Washington, 19 February (Argus) — President Donald Trump has signed an executive order that claims to give him sweeping control over the budgets, policies and regulations of independent US agencies that oversee the energy sector, financial markets, trade and transportation. The order seeks to give the White House unprecedented control over the US Federal Energy Regulatory Commission (FERC), the US Commodity Futures Trading Commission (CFTC), the US Securities and Exchange Commission (SEC) and more than a dozen other independent agencies. Trump's order asserts that "so-called independent agencies" lack sufficient accountability and should be brought under his direct control. "For the federal government to be truly accountable to the American people, officials who wield vast executive power must be supervised and controlled by the people's elected president," according to the executive order, which was signed on Tuesday. FERC, the CFTC and the SEC did not respond to a request for comment. Trump's order would all but end years of attempts by the US Congress to shield agencies that oversee energy markets, trading, finance, maritime trade, railroads, and other businesses from excessive political influence. Congress made those agencies independent — often with a bipartisan board serving years-long terms — to ensure a degree of independence when agencies resolve business disputes, set market rules and issue new regulations. In Trump's first term, FERC's commissioners and Republican chairman rejected the administration's plan to push through market rules to bail out coal and nuclear power plants, based partly on the concerns that doing so would destabilize power markets and cost consumers billions of dollars. It remains unclear if the agency in the future could assert that degree of independence under the order. Trump's order would give the White House the ability to control independent agency budgets and require the appointment of a White House "liaison" in each agency. The order would require agency chairs to align their policies with the White House, subject all significant regulations to review by the administration, and would establish "performance standards" for agency leaders. The order provides an exception for the US Federal Reserve for monetary policy, but the agency's budget and its regulatory actions would come under White House control. Other agencies also covered by the executive order include the US Surface Transportation Board, the US Federal Trade Commission, the US Chemical Safety Board, the US Export-Import Bank, the US Federal Maritime Commission and the US National Transportation Safety Board. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU draft plan seeks to cut energy costs


19/02/25
News
19/02/25

EU draft plan seeks to cut energy costs

Brussels, 19 February (Argus) — The European Commission has set out plans to tackle the cost of energy in the EU, warning in a draft document that Europe risks de-industrialisation because of a growing energy price gap compared to global competitors. High energy prices are undermining "the EU's global standing and international competitiveness", the commission said, in a draft action plan for affordable energy, seen by Argus . The plan is expected to be released next week, alongside a clean industrial deal and other strategy documents. Much of the strategy relies on non-binding recommendations rather than legislation, particularly in energy taxation. Officials cite EU reliance on imported fossil fuels as a main driver of price volatility. And they also highlight network costs and taxation as key factors. For taxation, the commission pledges — non-binding — recommendations that will advise EU states on how to "effectively" lower electricity taxation levels all the way down to "zero" for energy-intensive industries and households. Electricity should be "less taxed" than other energy sources on the bloc's road to decarbonisation, the commission said. It wants to strip non-energy cost components from energy bills. Officials also eye revival of the long-stalled effort to revise the EU's 2003 energy taxation directive. That requires unanimous approval from member states. The commission pledges, for this year, an energy union task force that pushes for a "genuine" energy union with a fully integrated EU energy market. Additional initiatives include an electrification action plan, a roadmap for digitalisation, and a heating and cooling strategy. A white paper will look at deeper electricity market integration in early next year. EU officials promise "guidance" to national governments on removing barriers to consumers switching suppliers and changing contracts, on energy efficiency, and on consumers and communities producing and selling renewable energy. More legislative action will come to decouple retail electricity bills from gas prices and ease restrictions on long-term energy contracts for heavy industries. By 2026, the commission promises guidance on combining power purchase agreements (PPAs) with contracts for difference (CfDs). And officials will push for new rules on forward markets and hedging. There are also plans for a tariff methodology for network charges that could become legally binding. Familiar proposals include fast-tracking energy infrastructure permits, boosting system flexibility via storage and demand response. Legislative overhaul of the EU's energy security framework in 2026 aims to better prepare Europe for supply disruptions, cutting price volatility and levels. Specific figures on expected savings from cutting fossil fuel imports are not given in the draft seen by Argus . But the strategy outlines the expected savings from replacing fossil fuel demand in electricity generation with "clean energy" at 50pc. Improving electrification and energy efficiency will save 30pc and enhancing energy system flexibility will save 20pc, according to the draft. The commission is also exploring long-term supply deals and investments in LNG export terminals to curb prices. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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