S Korea to convert half of existing coal fleet to gas

: Coal, Electricity
20/05/11

The closure or conversion of ageing South Korean coal-fired power plants could cut power sector consumption by 19mn-28mn t/yr by 2034, although the decline may be slowed in the near term by the start-up of new plants in the next five years.

South Korea plans to shut a total of 15.3GW of coal-fired capacity by 2034, according to a draft of the country's ninth basic electricity plan released on 7 May, of which 12.7GW will be switched to run on LNG. South Korean state-owned Kepco utilities currently operate 33.7GW of coal capacity across 56 units.

Some 30 of those coal units that reach 30 years of service by 2034 will be retired, 24 of which will be converted to run on natural gas, according to the draft. The exact units to be converted were not specified, but are likely to comprise power plants earmarked for conversion by the five individual state-owned utilities.

The existing eighth electricity plan already includes the conversion of the 500MW Dangjin 1 and 2 units to run on gas in 2029, with the 560MW Samcheonpo 3 and 4 units to be retired in March 2023 and the 500MW Taean 1 and 2 units scheduled to close in 2025.

In addition, Korea East-West Power has proposed the conversion of its 500MW Dangjin 3 and 4 in 2030, according to board meeting notes published on its website.

Fellow state-owned utility Korea South East Power (Koen) has proposed converting its 500MW Samcheonpo units 5 and 6 in July 2027 and January 2028, respectively, and its 800MW Youngheung units 1 and 2 in June 2034 and December 2034. Koen's 560MW Samcheonpo units 1 and 2 are already scheduled to retire as part of the eighth plan.

Korea Southern Power (Kospo) plans to convert a total of 3GW of ageing coal capacity across six units in 2026-31. Kospo's meeting notes do not specify the exact units to be converted, but the 500MW Hadong units 1-6 are the oldest in its fleet. Kospo is already scheduled to retire its 250MW Honam units 1 and 2 in January 2021.

Korea Western Power's (Kowepo) 500MW Taean units 3 and 4 have been proposed for conversion to LNG in December 2032 and Korea Midland Power's (Komipo) 500MW Boryeong units 5 and 6 in December 2024 and December 2025, respectively. The 500MW Boryeong units 1 and 2 are scheduled to close in December this year as part of the eighth plan, but Komipo has decided to convert the units to run on LNG in December 2026, according to board meeting minutes.

But despite the swathe of plant retirements and fuel conversions, seven new coal units are currently under construction with a combined capacity of 7.26GW. This means that South Korea's installed coal capacity will likely peak around 2024-25, potentially slowing the decline in coal burn until later this decade.

State-owned utilities consumed 83.3mn t of coal (with an unspecified calorific value) to generate 226.8TWh in 2019, according to Kepco data. This represented a 71pc utilisation rate of the country's state-owned fleet, down from 75pc in 2018. Coal-fired load factors may remain under pressure in the coming years, as the government has pledged to restrict the use of coal plants to improve air quality during the peak winter heating season each year. Increasingly competitive gas prices and rising nuclear and renewable capacity may also stem the use of coal plants.

If the use of South Korea's installed state-owned coal capacity ranges between 60pc and 70pc, annual coal consumption for power could drop to as low as 53mn-62mn t/yr in 2034, according to Argus analysis. But annual power sector demand is set to average around 80mn t/yr in the next five years, assuming a 70pc average load each year, as new capacity additions will outpace retirements in the near term. But the record 89.3mn t of consumption recorded in 2018 may be unlikely to be repeated.

Ninth plan targets renewables growth

The government — recently strengthened by the success of President Moon Jae-in's party in last month's national assembly elections — is targeting a 62.3GW increase in renewable capacity by 2034, in line with a previous target set out in the third energy plan.

This would bring total renewable capacity to around 79GW, which the government expects to represent around 40pc of the country's installed capacity, compared with 15pc now. The ninth plan sees coal, nuclear and gas-fired capacity accounting for 14.9pc, 9.9pc and 31pc, respectively, by 2034.

The increase in renewable generation would offset declines in coal, gas and nuclear generation and cater for growth in overall power demand. The eighth plan targeted a 24 percentage point increase in renewables' share of power generation to 33.7pc by 2030, with coal, gas and nuclear shares falling by around nine, five and seven percentage points. The targets in the ninth plan — to be confirmed in the second half of the year — may now be even tougher on coal.

By Evelyn Lee and Jake Horslen

Change in Korean generation mix 2019-34 GW

South Korean coal burn vs installed capacity mn t, GW

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25/03/25

Energy security tops Rubio's Caribbean visit agenda

Houston, 25 March (Argus) — Energy security is the "big opportunity holistically" of US secretary of state Marco Rubio's planned visit this week to Jamaica, Guyana and Suriname, US special envoy for Latin America Mauricio Claver-Carone said. The island nations that are net importers of crude and other energy products have a chance to "turn the page" to improve energy security and reduce prices, the envoy said today in a state department briefing to press. The trip comes after the US said this week it would impose a 25pc discretionary tariff on imports from countries that buy Venezuelan crude. Several nations in the past received crude from their South American neighbor through its PetroCaribe aid program which is largely defunct, other than shipments to Cuba. Trinidad has also sought to develop cross-border natural gas fields with Venezuela to boost its flagging production, but the US announcement further complicates this plan. "Along with a lot of the challenges posed with Venezuela, we're deeply committed to working with Trinidad to figuring out how to re-energize ... those natural gas opportunities," Claver-Carone said. Booming oil producer Guyana in turn has faced a border dispute with Venezuela, and the US hopes to discuss "binding security cooperation" to solve this problem during Rubio's visit. Along with Guyana's neighbor Suriname, which hopes to launch offshore crude production by 2028, the outlook for the region to increase energy production could end its "huge Achilles' heel to its economic development and security," Claver-Carone added. Rubio will also discuss security, including improving conditions in Haiti, illegal migration and arms and drug trafficking during his visits on Wednesday and Thursday. By Carla Bass Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Lula visits Japan to talk ethanol, Cop 30, beef

25/03/25

Lula visits Japan to talk ethanol, Cop 30, beef

Sao Paulo, 25 March (Argus) — Brazilian president Luiz Inacio Lula da Silva traveled to Japan on Tuesday in search of energy transition agreements and new market opportunities to improve trade relations between the countries. Bilateral Japan-Brazil trade fell to around $11bn in 2024, down from $17bn in 2011, the Brazilian government said. Brazil exported $730mn in goods to Japan in January-February, while importing $995mn from the Asian country in the period, according to Brazil trade ministry data. Exports dropped by almost 13.5pc from a year before in the two-month period, while imports grew by nearly 25pc. "Firstly, we have [a shortfall] to turn around," Lula said. Brazil will also ask Japan to join its growth acceleration plan . He is accompanied by 11 ministers and four members of congress, including senate president Davi Alcolumbre and lower house president Hugo Motta. Ethanol market Brazil aims to sell more ethanol to Japan, as the Asian country expects to increase its ethanol blend to 10pc from 3pc by 2030. "If Japan blends 10pc of ethanol into gasoline, it will be an extraordinary step not only for us to export to them but for them to be able to produce in Brazil," Lula said. Japan received 3.4pc of Brazil's ethanol exports, according to Brazil's development and trade ministry. Cop 30 and energy transition Lula's visit also seeks to attract investment in renewable energy, forest revamps and new donations to the Amazon Fund, as well as a "strong commitment" from Japan at the Cop 30 summit, to be held in Brazil later this year. Brazil aims to export clean fuels to generate power to Japan, as power imports account for more than 80pc of all Japanese power demand and "a large share of it comes from fossil sources," according to the Brazilian foreign relations ministry's Asia and Pacific secretary Eduardo Saboia. Brazilian and Japanese companies announced earlier this year plans to produce biomethane in Brazil . The renewable fuel would supply both countries. Brazil and Japan should also sign a deal to help recover the Cerrado biome, which is the second largest biome in Brazil and the second most endangered. It comprises of savanah grasslands and forest and makes up about 25pc of the nation's territory. The Cerrado lost 9.7mn hectares to wildfires in 2024, up by almost 92pc from 2023, according to environmental network MapBiomas' fire monitor researching program. Deforestation is one of Brazil's flagship issues for Cop 30 this year. The country has been pushing for forest protection and recovery initiatives as most of Brazil's past Cop pledges cannot be met with only its remaining forests. Japan and Brazil should talk about the Amazon Fund as well because Brazil "wants more", Saboia said. Japan was the first Asian country to donate to the fund with $14mn, which Saboia said was "too little." Where's the beef? Lula is also targeting opening Japan's beef market to Brazilian exports, as the Asian country imports over 70pc of all its beef. Lula met with members of the beef exporters association Abiec in his first day in Japan to discuss the matter. The bulk of Japan's beef imports — 80pc — come from the US, the Brazilian government said. Brazil does not currently export beef to Japan. "Brazil has the logistic capacity to increase exports and double beef exports every four years," transport ministry Renan Filho said. Brazil has been trying to enter Japan's beef market for over two decades. This time, Lula expects to achieve a technical visit from Japan to inspect Brazil's beef producing conditions as a first step toward accessing the Japanese market. Lula will depart to Vietnam on 28 March to debate a plan to turn the country into one of Brazil's strategic partners. Only Indonesia is considered a Brazil strategic partner in southeast Asia. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Low snowpack could support Italian summer gas burn

25/03/25

Low snowpack could support Italian summer gas burn

London, 25 March (Argus) — Low snowpack and hydro reserves in Italy may increase demand for gas-fired plants this summer, in turn driving up power-sector gas burn on days when renewable output is weakest. Italian thermal-fired plants — mostly gas fired — accounted for 51pc of the country's generation mix in the summers of 2020-24, while run-of-river installations, pumped-storage plants and hydroelectric dams accounted for 19pc and solar, wind and other sources provided 31pc. Italian power-sector gas demand averaged 61.5mn m³/d. Italian gas-fired plants compete directly against programmable hydroelectric dams for both the day-ahead and ancillary power markets, so if overall electricity demand this summer remains steady on the year, gas-fired plants stand to gain a greater share of the generation mix than in years when hydro output was stronger. Unseasonably hot weather driving unusually high use of electric-powered air conditioning this summer would further increase scope for Italy's gas-fired plants to run. The estimated water content of snow on Italian mountains as of 8 March — the latest available data — was the lowest for that date since at least 2011 and was almost 57pc below the 2011-23 average for that time of year, according to Italian meteorological association Cima. Snowpack last year also dipped below the 2011-23 average in January-March before late-season precipitation pushed levels back above median levels in April-July. At the same time, water reserves at Italian hydroelectric dams have been well below historical averages this year. Reserves equal to 2.08TWh of power generation as of 17 March — the latest available data — were the third lowest for that date since 2015 and a full 10pc below the 10-year average for that time of year. Looking ahead, following months of predominantly dry weather punctuated by occasional bouts of heavy showers, long-term weather forecasts this week predicted slightly above-average rainfall over the rest of March and throughout April in Milan, around which much of the country's hydro capacity is located. And during that time, at least some rain was forecast to fall on all but one day, which would provide a far steadier influx of water into rivers. That said, Italian renewable generation capacity — particularly solar — is poised to continue rising in the coming months, likely boosting output from those technologies on the year in April-September and restricting demand for dispatchable gas-fired and hydroelectric dams alike. Total Italian PV solar capacity of 37.9GW at the start of March was 20pc higher on the year, suggesting potential for a proportional increase in generation of that type in April-September compared with summer 2024. Italian PV solar panels and on-site renewable installations at homes and businesses, the vast majority of which are solar-based, generated an average of 8GW each day in summer 2024, covering 26pc of all generation nationwide. By Ilenia Reale and Jeff Kuntz Gas and hydro output, hydro reserves GW, TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Cerrejon to cut coal production by 5-10mn t in 2025

25/03/25

Cerrejon to cut coal production by 5-10mn t in 2025

Bogota, 25 March (Argus) — Colombia's second-largest coal producer Cerrejon will cut thermal coal production by 5-10mn t with immediate effect. This brings its full-year estimate to 11-16mn t for 2025, the Glencore-owned firm said today. The main reason for the reduction is "unsustainable prices for thermal coal transported by sea". Cerrejon produced 19mn t of steam coal in 2024, which means output could fall by 18.75-42pc on the year. Cerrejon has implemented numerous initiatives to respond to the current challenging market conditions, but said the decision to reduce production will help ensure the sustainability of operations and its ability to continue generating revenue for the region and the country. Thermal coal demand has become increasingly focused on Asian markets, including South Korea, India, Japan and China, and freight costs for Colombian coal to reach those markets of around $37/t are considerably higher than the $16-17/t to reach Colombia's traditional markets, such as Europe and Turkey. At the same time, international coal prices have dropped, further reducing Colombian coal's margins, Cerrejon president Claudia Bejarano said last week in Cartagena at the Colombia Genera conference. "We are losing our competitiveness completely," Bejarano said, adding that coal demand in natural markets for Colombia such as Europe is dwindling Argus ' fob Puerto Bolivar NAR 6,000 kcal/kg thermal coal assessment, which forms part of the Colombian API 10 benchmark, was assessed at $85.20/t at the end of last week, down from $93/t at the start of the year — it was as high as $102/t as recently as November. The drop in production will be followed by a reduction in the workforce, a source familiar with the matter said. The company said production cuts will not affect Cerrejon's current social or environmental commitments. The president of Colombian mining agency Alvaro Pardo told Argus that Colombia's thermal coal exports increased by 8.8pc in 2024, but revenues at the country's largest producers declined by 25pc, reflecting the difficult market conditions amid low coal prices and tight margins, Pardo said. Pardo said market conditions will be a factor in ending coal production over the long term, not the government. The government is concerned about falling international thermal coal prices because the operators of the country's large open-pit mines, including Drummond and Cerrejon, may hand back the coal titles to the government, as Glencore did with its Prodeco mine titles in 2021. By Diana Delgado Colombian coal loaded vs landing prices $/t Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US venue case crucial for future clean air fights

25/03/24

US venue case crucial for future clean air fights

New York, 24 March (Argus) — The US Supreme Court on Tuesday will hear arguments about the proper court venue for Clean Air Act lawsuits, which could be pivotal for future enforcement of federal air pollution rules. The court is considering both a case involving the Environmental Protection Agency's (EPA) rejections of small refiners' requests for hardship exemptions from a biofuel blend mandate and the agency's separate denials of state plans for addressing ozone-forming NOx emissions. Judges are not expected to decide the legality of EPA's decisions, just the proper courts for settling the disputes. But the cases are still significant: legal uncertainty to date has affected both EPA programs implicated by the Supreme Court's review and could upend enforcement of future rules if the court does not provide sufficient clarity. Federal ozone season NOx allowance prices essentially flatlined last year as participants were hesitant to trade due to risks from so many court cases. And small refinery exemptions are crucial for biofuel demand, so biofuel producers are wary of empowering more lower courts to reconsider denied exemption requests. The Clean Air Act says that EPA actions that are "nationally applicable" or otherwise based on "nationwide scope or effect" should proceed before the US Court of Appeals for the District of Columbia Circuit, while "locally or regionally applicable" actions head to regional circuit courts instead. But judges have disagreed about how to apply those criteria, since many EPA rules have far-reaching effects but on their face target individual states or facilities. Regulated industry fears that EPA could say a broad set of regulations have nationwide scope, centralizing review in the DC Circuit, which is seen as friendlier to federal regulators and where a majority of judges are Democratic appointees. Local conditions — such as a small refinery in Indiana serving local farmers that cannot handle higher biodiesel blends — get short-changed when various companies' concerns are assembled together, they argue. But EPA under the prior administration and Democratic-led states argue that sending these cases to the DC Circuit, which is more experienced with the complexities of federal rulemaking, makes more sense than letting industry seek out favorable jurisdictions. And they highlight the possibility of courts leaving emitters in one part of the country with laxer rules. "The fundamental risk is that you'll end up with decisions on the same point of law coming out differently in different places — and not an expedient way to resolve that," said Brian Bunger, a Holland & Knight partner and the former chief counsel at the Bay Area Air Quality Management District. For instance, both the DC Circuit and the conservative-leaning 5th Circuit agreed that EPA erred when it denied some refiners exemptions from biofuel blend mandates — but they said so for slightly distinct reasons. The 5th Circuit, for instance, went further by saying refiners reasonably relied on past EPA practice and thus the agency incorporating new analysis into its review of waiver requests was unfair. As a result, EPA recently used different criteria when weighing a waiver request from one refiner in the 5th Circuit's jurisdiction than it used for another refiner, according to partially redacted decisions obtained by Argus through a Freedom of Information Act request. The agency said it could not consider at all whether CVR Energy's 75,000 b/d refinery in Wynnewood, Oklahoma, is able to pass on the costs of program compliance to consumers because of the 5th Circuit decision but could weigh such information when deciding a similar petition from Calumet's 15,000 b/d refinery in Great Falls, Montana. The agency issued those decisions in the waning days of former-president Joe Biden's term. While President Donald Trump has pledged a vastly different approach to environmental regulation, his administration for now has not signaled a different stance than the Biden administration on whether these types of disputes should proceed before the DC Circuit. Schrodinger's case It is still unclear whether the judges view the cases as a tricky technical dispute or part of a broader trend of federal agencies overstepping their authority. Tuesday's hearing could provide clues. Of the court's nine justices, four previously served on the DC Circuit and could see value in sending more complex regulatory cases to the expert court, Bunger said. But the court's conservative majority could also be wary of giving EPA too much authority to set venue. Refiners argue that the agency repackaged dozens of individual exemption denials into two larger regulatory actions as a strategy to get the cases before a friendlier court. The Supreme Court has looked skeptically at other EPA rulings and last year overturned a decades-old legal principle that gave agencies leeway when interpreting ambiguous laws. Final Supreme Court decisions usually arrive by late June. However the court rules, businesses say that it should provide a clear enough explanation to prevent similar venue disputes from reemerging. The US Chamber of Commerce told the court it takes no position beyond urging the court to "adopt an interpretation that provides clarity and predictability to all stakeholders." By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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