Tag Archives: COA

Russian forces pound key cities as West prepares new sanctions

  • U.S., EU set to ban new investment in Russia
  • Zelenskiy says Bucha killings demand punishment
  • Ukraine reports attacks in south and east

LVIV, Ukraine, April 6 (Reuters) – Russian artillery pounded the Ukrainian cities of Mariupol and Kharkiv on Wednesday as the West prepared more sanctions against Moscow in response to civilian killings that Kyiv and its allies have called war crimes.

The besieged southern port of Mariupol has been under almost constant bombardment since the early days of the invasion that began on Feb. 24, trapping tens of thousands of residents without food, water or power.

“The humanitarian situation in the city is worsening,” British military intelligence said on Wednesday.

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“Most of the 160,000 remaining residents have no light, communication, medicine, heat or water. Russian forces have prevented humanitarian access, likely to pressure defenders to surrender.”

Reuters could not immediately verify the report.

Ukraine’s Deputy Prime Minister Iryna Vereshchuk said authorities would try to evacuate trapped civilians through 11 humanitarian corridors on Wednesday, though people trying to leave the besieged city of Mariupol would have to use their own vehicles. read more

Russian forces last week pulled back from positions outside the capital Kyiv and shifted their assault to the south and east, and Ukraine’s general staff said the northeastern city of Kharkiv, the country’s second-largest, also remained under attack.

Authorities in the eastern region of Luhansk on Wednesday urged residents to get out “while it is safe” from an area that Ukraine also expects to be the target of a new offensive. read more

SANCTIONS PUSH

Western sanctions over Russia’s invasion of Ukraine, described as a “special military operation” by Moscow and the biggest assault on a European nation since World War Two, gained new impetus this week after dead civilians shot at close range were found in the northern town of Bucha after it was retaken from Russian forces.

Moscow denied targeting civilians there and called the evidence presented a forgery staged by the West to discredit it. read more

New sanctions set to be unveiled Wednesday are in part a response to Bucha, the White House said.

Coordinated between Washington, the Group of Seven advanced economies and the European Union, the measures will target Russian banks and officials and ban new investment in Russia, the White House said. read more

Proposed EU sanctions would ban buying Russian coal, prevent Russian ships from entering EU ports, and suspend nearly 20 billion euros ($21.77 billion) worth of trade.

EU executive chief Ursula von der Leyen said the bloc was working on banning oil imports as well as part of a plan to end its dependence on Russian energy. read more

Europe obtains about a third of its natural gas from Russia and Ukraine says banning Russian gas is vital to securing a deal to end the war in peace talks.

After an impassioned address to the UN Security Council on Tuesday, Zelenskiy said new sanctions against Russia “must be commensurate with the gravity of the occupiers’ war crimes,” calling it a “crucial moment” for Western leaders.

New Zealand said on Wednesday it would impose a 35% tariff on all imports from Russia and extend export bans on industrial products connected to strategic Russian industries.

“The images and reports emerging of atrocities committed against civilians in Bucha and other regions of Ukraine is abhorrent and reprehensible,” Foreign Minister Nanaia Mahuta said in a statement.

The United States has agreed to provide an additional $100 million in assistance to Ukraine, including Javelin anti-armour systems, the Pentagon said on Tuesday.

U.S. chipmaker Intel Corp (INTC.O) said it had suspended business operations in Russia, joining a growing list of companies leaving the country. read more

BUCHA BURIAL

Ukrainian officials say between 150 and 300 bodies might be in a mass grave by a church in Bucha, north of the capital Kyiv.

Satellite images taken weeks ago show bodies of civilians on a street in the town, a private U.S. company said. read more

Reuters reporters saw at least four victims shot through the head in Bucha, one with their hands tied behind their back.

Residents have recounted cases of several others slain, some shot through their eyes and one apparently beaten to death and mutilated. read more

Since launching an invasion that has uprooted a quarter of Ukraine’s population, Russia has failed to capture a single major city.

($1 = 0.9186 euros)

(This story was refiled to remove parentheses in paragraph 2)

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Additional reporting by Reuters bureaus; Writing by Rami Ayyub, Michael Perry and Tomasz Janowski; Editing by Lincoln Feast and John Stonestreet

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At least 11 dead, dozens trapped in Russian mining accident

MOSCOW, Nov 25 (Reuters) – At least 11 miners died in an accident at a coal mine in Russia’s Siberia on Thursday and an operation to rescue dozens more people underground was suspended due to the risk of an explosion, local authorities and emergency services said.

Coal dust caught fire in a ventilation shaft in the Listvyazhnaya mine in the snowbound Kemerovo region early on Thursday, filling the mine with smoke, the TASS news agency cited local emergency services as saying.

“The search and rescue work has been temporarily suspended due to the threat of an explosion,” an unnamed emergency services spokesperson was quoted by the RIA news agency as saying.

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Eleven people died and 35 others were still underground, Regional Governor Sergei Tsivilev said, according to RIA.

Dozens were being treated in hospital, at least some of them with smoke poisoning. Four were in critical condition.

Rescue workers and ambulances could be seen arriving at the mine’s compound in video footage, with police huddled outside as it snowed in the region roughly 3,500 km (2,175 miles) east of Moscow.

Some 285 people were inside the mine when smoke spread through the ventilation shaft, the emergency ministry said. At least 239 made it above ground, authorities said. They did not say what had caused the smoke.

The Kremlin said it hoped the miners who were still underground would manage to get out and that President Vladimir Putin had ordered the emergencies minister to fly out to the region to help with the operation.

Tsivilev said there was still electricity and ventilation in the mine, but that contact had been lost with some people deep underground.

“For now there is no heavy smoke, so we hope that there is no fire,” Tsivilev said in video comments shared on his Telegram channel. “We have no communication lines with these people, the underground communications system is not working.”

The Investigative Committee law enforcement agency’s regional branch said it had opened a criminal case into negligence that had caused loss of life.

“According to preliminary data, a number of workers suffered from smoke poisoning. The number of victims is being specified,” it said in an earlier statement.

The mine is part of SDS-Holding, owned by the privately held Siberian Business Union. The union had no immediate comment.

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Reporting by Anton Kolodyazhnyy, Alexander Marrow, Anastasia Lyrchikova and Gleb Stolyarov; Writing by Alexander Marrow/Tom Balmforth; Editing by Stephen Coates and Bernadette Baum

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Canada floods cut rail link to Vancouver port; one dead

MERRITT, British Columbia, Nov 16 (Reuters) – Floods and landslides that have killed at least one person have cut all rail access to Canada’s largest port in the city of Vancouver, a spokesperson for the port said on Tuesday.

Two days of torrential rain across the Pacific province of British Columbia touched off major flooding and shut rail routes operated by Canadian Pacific Rail (CP.TO) and Canadian National Railway (CNR.TO), Canada’s two biggest rail companies.

“All rail service coming to and from the Port of Vancouver is halted because of flooding in the British Columbia interior,” port spokesperson Matti Polychronis said.

At least one person was killed when a mudslide swept cars off Highway 99 near Pemberton, some 100 miles (160 km) to the northeast of Vancouver.

Two people were missing and search and rescue crews were combing through the rubble, officials said.

Vancouver’s port moves C$550 million ($440 million) worth of cargo a day, ranging from automobiles and finished goods to essential commodities.

The floods temporarily shut down much of the movement of wheat and canola from Canada, one of the world’s biggest grain exporters, during a busy time for trains to haul grain to the port following the harvest.

Drought has sharply reduced the size of Canada’s crops this year, meaning a rail disruption of a few days may not create a significant backlog, a grain industry source told Reuters.

Del Dosdall, senior export manager at grain handler Parrish & Heimbecker, said he expected some rail services could be restored by the weekend. Another industry source said he expected the shutdown to last weeks.

OIL PIPELINES SHUT DOWN

Floods have also hampered pipelines. Enbridge Inc (ENB.TO) shut a segment of a British Columbia natural gas pipeline as a precaution. read more

Crowds gather along the Trans-Canada highway to view flooding after rainstorms lashed the western Canadian province of British Columbia, triggering landslides and floods and shutting highways, in Abbotsford, British Columbia, Canada November 16, 2021. REUTERS/Jennifer Gauthier

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The storms also forced the closure of the Trans Mountain pipeline, which carries up to 300,000 barrels per day of crude oil from Alberta province to the Pacific coast.

Copper and coal miner Teck Resources Limited (TECKb.TO) said the floods had disrupted movement of its commodities to its export terminals, while potash exporter Canpotex Ltd said it was looking for alternatives to move the crop nutrient overseas.

Directly to the south of British Columbia, in the U.S. state of Washington, heavy rain forced evacuations and cut off electricity for more than 150,000 households on Monday.

The U.S. National Weather Service on Tuesday issued a flash flood in Mount Vernon, Washington, “due to the potential for a levee failure.”

Some areas of British Columbia received 8 inches (20 cm) of rain on Sunday, the amount that usually falls in a month.

Authorities in Merritt, some 120 miles (200 km) northeast of Vancouver, ordered all 8,000 citizens to leave on Monday as river waters rose quickly, but some were still trapped in their homes on Tuesday, said city spokesman Greg Lowis.

Snow blanketed the town on Tuesday and some cars could be seen floating in the flood waters up to 4 feet (1.22 m) deep.

The towns of Chilliwack and Abbotsford ordered partial evacuations.

Abbotsford also issued an emergency warning on Tuesday night, asking all residents to evacuate the Sumas Prairie region immediately as deteriorating conditions posed a significant threat to lives.

Rescuers equipped with diggers and body-sniffing dogs started clearing mounds of debris that have choked highways.

The landslides and floods come less than six months after a wildfires gutted an entire town in British Columbia as temperatures soared during a record-breaking heat dome, raising new worries about climate change. read more

Reporting by Artur Gajda in Merritt and Rod Nickel in Winnipeg; additional reporting by David Ljunggren in Ottawa, Nia Williams in Calgary, Ismail Shakil in Bengaluru, Brad Brooks in Lubbock, Texas and Dan Whitcomb in Los Angeles, Maria Ponnezhath in Bengaluru; editing by Ed Osmond, Jonathan Oatis, Aurora Ellis and Sandra Maler

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The cost of coal in South Africa: dirty skies, sick kids

EMALAHLENI, South Africa, Nov 4 (Reuters) – In 2019, scientists working for South Africa’s government completed a study on the health impacts of pollution from the country’s sprawling coal industry.

The researchers for the state-owned Council for Scientific and Industrial Research had been assured by government authorities that their years-long study would be published, according to three people familiar with the matter.

So far, it has not seen the light of day.

The study, a copy of which was reviewed by Reuters, showed more than 5,000 South Africans die annually in the nation’s coal belt because the government has failed to fully enforce its own air quality standards. It also revealed that nearly a quarter of households in the region, where 3.6 million people live, have children with persistent asthma. That’s double the national rate.

South Africa’s government has since 2015 granted waivers from emissions limits to its indebted state power and fuel companies, Eskom and Sasol, allowing them to save money.

That kind of continuing government support highlights an issue in many coal-dependent nations, from Australia to Indonesia, that is hobbling the transition to cleaner energy. In producing countries, governments, businesses and local residents often see coal as an economic lifeline.

South Africa’s coal industry, the world’s fifth largest, employs 90,000 miners, generates 80% of the country’s electricity, and supplies the feedstock for about a quarter of the country’s liquid fuel for vehicles, all at a time of soaring unemployment and frequent blackouts.

The costs of a mammoth coal industry are also high, and not just for the climate. South Africa’s coal belt is blanketed in smog and coal ash; the stink of sulfur pervades. The area east of Johannesburg is among the world’s most polluted, experts say, rivaling Beijing and New Delhi.

In 2017, British air pollution expert Mike Holland calculated that the health impacts from Eskom’s emissions alone cost South Africa $2.37 billion every year.

Environment Minister Barbara Creecy, whose department commissioned the 2019 coal health study, declined to say why it remains unpublished. She said the government still intends to release it at some point.

“We understand that there are serious health challenges facing communities,” she said, adding that the government considers improving air quality “absolutely imperative.”

But Creecy’s agency – the Department of Fisheries, Forestry and the Environment – has publicly defended its lax enforcement of pollution regulations as an economic necessity in court battles with activists. In a recent filing, it said its main challenge is addressing pollution without hurting “the poor, who are desperate for job opportunities.”

COAL IN THE CROSSHAIRS

As the United Nations’ climate conference, COP26, in Glasgow gets underway this month, coal is in the crosshairs of a global push to replace it with cleaner fuels. read more

South Africa is the world’s 12th largest greenhouse gas emitter, according to the non-profit Global Carbon Atlas. This water-stressed country also stands to be one of the big losers from climate change. Temperatures in southern Africa are rising twice as fast as the global average, according to the International Panel on Climate Change, pushing the region’s northwestern deserts south.

In an effort to secure foreign investment, Eskom is pitching a $10 billion plan to shut most of its coal-fired plants by 2050 and embrace renewables like wind and solar, with financing from wealthy nations. The United States, Britain, France, Germany and the European Union on Tuesday provided that effort a big boost, offering $8.5 billion to help South Africa transition off coal.

Eskom’s green push, however, has put the company in conflict with Energy Minister Gwede Mantashe, who has called ditching coal “economic suicide.” read more

Mantashe represents a powerful constituency within the ruling ANC that includes workers’ unions on whose support the party depends to win elections. Those unions, like Mantashe, are concerned about job losses.

“We should not collapse our economy because they are greedy for green funding,” Matashe told a South Africa mining conference in October. He has previously said switching off the nation’s coal plants would allow South Africans to “breathe fresh air in the darkness.”

Mantashe declined to comment for this story.

Darkness is already a familiar experience in the coal belt. Power cuts are a daily reality for the shanties threaded between the mine shafts and cooling towers of towns like Emalahleni — “The Place of Coal” in the Zulu language.

If people stay, it is for the chance of a job.

‘HER CHEST WAS RASPING’

Mbali Matabule, poses for a photograph while her daughter Asemahle looks on at their home in Emalahleni, in Mpumalanga province, South Africa, June 2, 2021. REUTERS/Siphiwe Sibeko

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Mbali Matabule and her partner were senior high school students when they swapped phone numbers on a dirt track in Vosman, a township outside Emalahleni. After graduation, her partner found work in Sasol’s Secunda plant, which transforms coal into liquid fuel for cars. The following year, Matabule bore their first child, Princess.

His salary allowed them to feed and clothe their daughter and buy trappings of middle-class life: a TV, microwave, fridge and electric cooker to put in their shack at her parents’ compound.

Then, in May 2018, as she approached her fourth birthday, Princess started struggling to breathe. They rushed her to the hospital, where a doctor put a mask on Princess’s face attached to a nebuliser.

“They said she had asthma,” Matabule said. “I was thinking: why? She was not born with asthma.”

Toward the end of that year, they had a second child, Asemahle, who soon also developed breathing problems.

“Her chest was rasping,” Matabule said.

Hospital visits became routine, and the medical costs started to mount. Without health insurance, the couple was spending 2,500 rand ($184.03) a month on medical bills for their kids, nearly half Mbali’s partner’s salary.

AMONG THE WORLD’S WORST

Smog released from burning coal is laced with chemicals like sulphur and nitrogen oxides, mercury and lead, and radioactive elements like uranium and thorium.

“We know air pollution from coal causes lung problems, cardiac diseases. It impairs cognitive development of children,” said Mohammed Tayob, a doctor in Middleberg, one of the worst affected towns in the coal belt.

The 2019 CSIR study obtained by Reuters concluded that 5,125 lives could be saved every year in the coal belt by enforcing national air quality standards on soot, otherwise known as particulate matter.

The air in Emalahleni, it said, contains around 20% more particulate matter than the nation’s limit of 40 micrograms per cubic meter, and more than three times more than recommended by the World Health Organization.

The region’s sulphur dioxide levels, meanwhile, are off the charts. The non-profit Centre for Research on Energy and Clean Air this month found Eskom alone emits more SO2 than the entire power sector of the United States and China combined.

Clearing up the air would require a crackdown on polluting industries.

Eskom environmental manager Deidre Herbst told Reuters the government waivers allowing his company to exceed pollution limits were an economic necessity: it would cost 300 billion rand ($20 billion) and take 10-15 years to fully meet national SO2 standards, leading to prolonged outages in the meantime.

“It’s impossible for us to become immediately compliant,” she said, and South Africa can’t simply switch off all its coal plants.

Sasol spokesperson Matebelo Motloung said the company’s emissions were permitted under its operating licenses and that the company hoped to embrace cleaner technologies in the future.

‘PEOPLE WERE SICK AND DYING’

Matabule had not imagined the haze in her neighborhood was behind her childrens’ illness until she attended a local meeting about air pollution and heard the stories of neighbors.

“I became so angry because nobody was doing anything, and people were sick and dying,” Matabule said.

But, like her husband who relies on coal for a paycheck, many in her community are wary of a transition to cleaner energy.

Vosman resident Valentia Msiza, 33, said her family has done well since her husband got his job in the coal mines. They worry a transition could leave them behind.

They, too, have a child with respiratory problems – and they can’t pay for his care without the husband’s salary and health insurance. The family is seeking a medical specialist to treat their toddler’s lung disease.

“That’s our last hope now,” Valentia said.

Editing by Richard Valdmanis and Brian Thevenot

Our Standards: The Thomson Reuters Trust Principles.

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EXCLUSIVE China looks to lock in U.S. LNG as energy crunch raises concerns

SINGAPORE/NEW YORK, Oct 15 (Reuters) – Major Chinese energy companies are in advanced talks with U.S. exporters to secure long-term liquefied natural gas (LNG)supplies, as soaring gas prices and domestic power shortages heighten concerns about the country’s fuel security, several sources said.

At least five Chinese firms, including state major Sinopec Corp and China National Offshore Oil Company (CNOOC) and local government-backed energy distributors like Zhejiang Energy, are in discussions with U.S. exporters, mainly Cheniere Energy (LNG.A) and Venture Global, the sources told Reuters.

The discussions could lead to deals worth tens of billions of dollars that would mark a surge in China’s LNG imports from the United States in coming years. At the height of a Sino-U.S. trade war in 2019, gas trade briefly came to a standstill. LNG export facilities can take years to build, and there are several projects in North America in the works that are not expected to start exporting until the middle of the decade.

Talks with U.S. suppliers began early this year but speeded up in recent months amid one of the biggest power-generating, heating fuel crunch in decades. Natural gas prices in Asia have jumped more than fivefold this year, sparking fears of power shortages in the winter.

“Companies faced a supply gap (for winter) and surging prices. Talks really picked up since August when spot prices touched $15/mmbtu”, said a Beijing-based senior industry source briefed on the talks.

Another Beijing-based source said: “After experiencing the recent massive market volatility, some buyers were regretting that they didn’t sign enough long-term supplies.”

Imports for winter of 2021 are capped as soaring global prices hurt demand

Sources expected fresh deals to be announced over the coming few months, after privately controlled ENN Natural Gas Co, (600803.SS), headed by the ex-LNG chief of China’s largest buyer, CNOOC, announced a 13-year deal with Cheniere on Monday. read more

It was the first major U.S.-China LNG deal since 2018.

The new purchases will also cement China’s position as the world’s top LNG buyer, taking over from Japan this year.

“As state-owned enterprises, companies are all under pressure to keep security of supply and the recent price trend has deeply changed the image of long-term supplies in the mind of leadership,” said the first Beijing-based trader.

“People may have taken the spot (market) as the key in the past, but are now realizing that long-term cargoes are the backbone.”

CHEAPER U.S. GAS

The sources declined to be named as the negotiations are private.

Sinopec declined comment. CNOOC and Zhejiang Energy did not immediately respond to requests for comment.

Venture Global declined comment. Cheniere did not immediately respond to a request for comment.

“We expect more deals to be signed before year-end. It’s primarily driven by the global energy crunch and prices we’re seeing now… U.S. supplies now stand out as attractive,” said a third Beijing source briefed on the talks.

U.S. cargoes used to be expensive versus oil-linked supplies from Qatar and Australia for example, but are cheaper now.

A deal at $2.50 + 115% of Henry Hub futures , similar to ENN’s deal according to traders, would be roughly about $9-$10 per million British thermal units (mmBtu) on a delivered basis into Northeast Asia. This includes an average shipping cost of $2 per mmBtu for the U.S.-China route.

Jason Feer, global head of business intelligence with consultancy Poten & Partners said Chinese companies are heavily exposed to Brent-related pricing for LNG and the U.S. purchases give some diversity to the pricing.

Asian spot gas prices are currently trading at above $37 per mmBtu after reaching a record high of over $56 earlier this month. read more

Traders expect prices to go higher in winter when demand typically surges.

Chinese buyers are scouting for both near-term shipments to cover demand this winter and long-term imports as demand for gas, seen by Beijing a key bridge fuel before reaching its 2060 carbon-neutral goal, is set for steady growth through 2035.

China’s H1 2021 imports surged 28% on yr in counter-seasonal spike, but H2 imports seen capped by high prices

It’s hard to estimate a total volume of the deals being discussed, sources said, but Sinopec alone could be eyeing 4 million tonnes annually as the company is most exposed to the spot market versus domestic rivals PetroChina and CNOOC, said a third source.

Traders said Sinopec is in final talks with 3 to 4 companies to buy 1 million tonnes a year for 10 years, starting from 2023, and is looking for U.S. volumes as part of the requirement.

Delays in LNG export projects in Canada, in which PetroChina owns a stake, and Mozambique, where both PetroChina and CNOOC have invested, also made U.S. supplies attractive, sources added.

North American LNG exporters have been adding to capacity because of demand in major Asian economies.

Cheniere, the largest exporter out of the United States, said in late September it expects to announce “a number of other transactions” that will support their going forward with the Corpus Stage 3 expansion next year.

Venture Global is building or developing over 50 million tonnes per annum (MTPA) of LNG production capacity in Louisiana, including the 10-MTPA Calcasieu, which is expected to cost around $4.5 billion and start producing LNG in test mode in late 2021. read more

However, some buyers remained cautious.

“There is a lot of hype in the market and nobody knows for sure how long this supply crunch would last. For companies that do not have fresh demand in the next year or two, it’s better to wait,” said a separate Chinese importer.

Reporting by Chen Aizhu, Jessica Jaganathan in Singapore and Scott Disavino in New York; additional reporting by Gary McWilliams in Houston; editing by Raju Gopalakrishnan and Jason Neely

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China coal prices hit record highs, early winter chill adds to energy woes

Fishermen sail a boat past a power plant of the State Development and Investment Corporation (SDIC) outside Tianjin, China, October 14, 2021. REUTERS/Thomas Peter

  • China thermal coal prices hit record high
  • Power reform comes into effect
  • Cold winds from north sweeps central and east China
  • China’s Met Office forecasts sharp drops in temperatures

BEIJING, Oct 15 (Reuters) – China’s energy crisis deepened on Friday as cold weather swept into much of the country and power plants scrambled to stock up on coal, sending prices of the fuel to record highs.

Electricity demand to heat homes and offices is expected to soar this week as strong cold winds move down from northern China. Forecasters predict average temperatures in some central and eastern regions could fall by as much as 16 degrees Celsius in the next 2-3 days.

Shortages of coal, high fuel prices and booming post-pandemic industrial demand have sparked widespread power shortages in the world’s second-largest economy. Rationing has already been in place in at least 17 of mainland China’s more than 30 regions
since September, forcing some factories to suspend production and disrupting supply chains.

The most-active January Zhengzhou thermal coal futures hit a record high of 1,669.40 yuan ($259.42) per tonne early on Friday. The contract has risen more than 200% year to date.

The three northeastern provinces of Jilin, Heilongjiang and Liaoning – among the worst hit by the power shortages last month – and several regions in northern China including Inner Mongolia and Gansu have started winter heating, which is mainly fuelled by coal, to cope with the colder-than-normal weather.

Beijing has taken a slew of measures to contain coal price rises including raising domestic coal output and cutting power to power-hungry industries and some factories during periods of peak demand. It has repeatedly assured users that energy supplies will be secured for the winter heating season. B9N2QE019 read more

But power shortages are expected to continue into early next year, with analysts and traders forecasting a 12% drop in industrial power consumption in the fourth quarter as coal supplies fall short and local governments give priority to residential users.

Reuters Graphics

Earlier this week, China in its boldest step in a decades-long power sector reform said it would allow coal-fired power prices to fluctuate by up to 20% from base levels from Oct. 15, enabling power plants to pass on more of the high costs of generation to commercial and industrial end-users. read more

Steel, aluminium, cement and chemical producers are expected to face higher and more volatile power costs under the new policy, pressuring profit margins. Data on Thursday showed factory-gate inflation in September hit a record high. read more

Temperatures in northern China dip below normal, boosting heating demand amid power pinch

China aims to be “carbon neutral” by 2060 and Beijing has been trying to reduce its reliance on polluting coal power in favour of cleaner wind, solar and hydro. But coal is expected to provide the bulk of its electricity needs for some time.

China is not the only nation struggling with power supplies, which has led to fuel shortages and blackouts in some countries. The crisis has highlighted the difficulty in cutting the global economy’s dependency on fossil fuels as world leaders seek to revive efforts to tackle climate change at talks next month in Glasgow.

China will strive to achieve carbon peaks by 2030, Vice Premier Han Zheng said in a video message at the Russian Energy Week International Forum, according to state-run news agency Xinhua late on Thursday.

He also said that China and Russia are important forces leading the energy transition and they should cooperate and ensure smooth progress of major oil and gas pipeline and nuclear power projects.

($1 = 6.4351 Chinese yuan renminbi)

Reporting Shivani Singh in Beijing; additional reporting by Aizhu Chen, Muyu Xu and Beijing newsroom; Editing by Kim Coghill

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China rust-belt province warns of more shortages in energy crisis

A chimney of a China Energy coal-fired power plant is pictured in Shenyang, Liaoning province, China September 29, 2021. REUTERS/Tingshu Wang

BEIJING, Oct 11 (Reuters) – The largest provincial economy in China’s northeast rust belt on Monday warned of worsening power shortages despite government efforts to boost coal supply and manage electricity use in a post-pandemic energy crisis hitting multiple countries.

The energy crisis gripping the world’s second largest-economy and top exporter is expected to last through to the end of the year, with analysts and traders forecasting a 12% drop in industrial power consumption in the fourth quarter because coal supply is expected to fall short this winter.

Liaoning province issued its second-highest alert level for power shortages for the fifth time in two weeks on Monday, warning that the shortfall could reach nearly 5 gigawatts (GW).

The biggest economy and largest consumer of power among the three provinces making up China’s rust-belt industrial region, Liaoning has been hit by widespread power cuts since mid-September. A level-two alert indicates a power shortage equivalent to 10-20% of total demand for power.

The rebound in global economic activity as coronavirus restrictions are lifted has exposed shortages of fuels used for power generation in China and other countries, leaving industries and governments scrambling as the northern hemisphere heads into winter. read more

“The biggest power shortage could reach 4.74 gigawatts (GW) on Oct. 11,” said a notice issued by the department responsible for industry in the province.

An order to curb power use had been put in place from 6 a.m. (2200 GMT on Sunday), it said.

The province also issued level-two alerts for each of the last three days of September, when the daily power shortage reached as much as 5.4 GW, leaving hundreds of thousands of households without electricity and forcing industrial plants to suspend production.

The drop in output from power plants followed tightening supply and soaring prices for coal, which is used to generate more than 70% of electricity in the region.

Wind farms have also been idled because of slow wind speeds, a province-backed newspaper reported. Wind power made up 8.2% of Liaoning’s power generation in 2020, National Statistics Bureau data shows.

COAL SHORTAGE

The energy crisis, which has led to fuel shortages and blackouts in some countries, has highlighted the difficulty in cutting the global economy’s dependency on fossil fuels as world leaders seek to revive efforts to tackle climate change at talks next month in Glasgow. read more

China will “strictly control” coal-fired power generation projects and “strictly limit” the increase in coal consumption over the 14th Five-Year plan period from 2021-2025 while making a phased reduction in consumption in the next five-year plan, Vice Premier Han Zheng said in a joint statement issued on Monday after environment and climate dialogue between China and the European Union.

China is taking steps to try to alleviate tightness in the domestic coal market by pushing local mines to increase output, ING analysts said in a note to clients on Monday.

Shanxi province and the Inner Mongolia region, two of China’s biggest coal producers, ordered more than 200 of their mines to expand production capacity and prioritise coal supply to power plants in northeastern provinces, including Liaoning. read more

However, about 60 coal mines in China’s largest coal-mining province, Shanxi, have been closed and several railway lines disrupted since Friday after heavy rain caused flooding. The Shanxi government has not disclosed how much production capacity those closed mines represent.

Meanwhile, high coal costs continue to pressure utilities. China’s thermal coal futures rose 8% to hit a daily upper trading limit shortly after trade started on Monday.

More than 70% of China’s coal-fired power plants are loss-making because of high coal costs, Citi analysts said in a note on Friday.

A report by Moody’s Investors Service said: “China’s electricity cuts will add to economic stresses, weighing on GDP growth for 2022. And the risks to GDP forecasts could be larger as disruptions to production and supply chains feed through.”

The National Development and Reform Commission (NDRC), China’s state planner, on Monday said it has been urging power companies to boost coal inventories. It will hold a news briefing on Tuesday at 10:30 a.m. (0230 GMT) on tariffs for coal-fired power.

Last week China said it would allow coal-fired power prices to fluctuate by up to 20% from base levels, instead of 10-15% previously. read more

Reporting by Muyu Xu and Shivani Singh
Additional reporting by David Stanway
Editing by Tom Hogue, Simon Cameron-Moore and David Goodman

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Delhi chief minister warns of power crisis due to coal shortage

Workers drill at an open cast coal field at Dhanbad district in the eastern Indian state of Jharkhand September 18, 2012. REUTERS/Ahmad Masood

NEW DELHI, Oct 9 (Reuters) – Delhi Chief Minister Arvind Kejriwal on Saturday warned of a power crisis in the Indian capital due to a coal shortage, which has already triggered electricity cuts in some of the country’s eastern and northern states.

“Delhi could face a power crisis,” Kejriwal said in a tweet in which he also shared a copy of a letter to Prime Minister Narendra Modi flagging a shortage of fuel in power plants in and around Delhi.

Kejriwal urged the federal government to divert supplies of coal and gas to utilities supplying the capital, saying the city housed strategic centres of national importance and supply was critical to hospitals and coronavirus vaccination centres.

A crippling coal shortage has caused a supply shortage in states such as Bihar, Rajasthan and Jharkhand, with residents in the regions experiencing power cuts stretching to up to 14 hours a day.

India said on Saturday it will facilitate gas supplies to enable two power plants in Delhi to operate. State-run NTPC Ltd (NTPC.NS) has also been directed to increase coal stocks to coal-fired plants from neighbouring Uttar Pradesh state to ensure supply. read more

A power supply shortage in Uttar Pradesh, which faces elections in early 2022, had surged to 5.6% on Friday, the highest in recent days, federal government data showed.

In India, over half of 135 coal-fired power plants, which supply around 70% of the country’s electricity, have fuel stocks to last less than three days, Reuters reported on Friday.

Demand for industrial power has surged in India after the second wave of the coronavirus pandemic, with increased economic activity driving up coal consumption in the world’s second largest consumer of the commodity.

Additional reporting by Devjyot Ghoshal
Editing by Clelia Oziel, William Maclean

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Fossil fuel demand shakes off pandemic in blow to climate fight

LONDON, Oct 4 (Reuters) – Demand for coal and natural gas has exceeded pre-COVID-19 highs with oil not far behind, dealing a setback to hopes the pandemic would spur a faster transition to clean energy from fossil fuels.

Global natural gas shortages, record gas and coal prices, a power crunch in China and a three-year high on oil prices all tell one story – demand for energy has roared back and the world still needs fossil fuels to meet most of those energy needs.

“The demand fall during the pandemic was entirely linked to governments’ decision to restrict movements and had nothing to do with the energy transition,” Cuneyt Kazokoglu, head of oil demand analysis at FGE told Reuters.

“The energy transition and decarbonisation are decade-long strategies and do not happen overnight.”

Over three-quarters of global energy demand is still met by fossil fuels with less than a fifth by non-nuclear renewables, according to energy watchdog the International Energy Agency.

Energy transition policies have come under fire for the run up in energy prices. In some places, they are having an impact, such as in Europe where high carbon prices aimed at reducing emissions have made utilities reluctant to switch on coal-fired plants to alleviate the shortage.

In China, policies to reduce emissions have contributed to the government’s decision to ration energy to heavy industry.

But much of the rise in energy prices is simply because producers took enormous amounts of capacity offline last year when the pandemic led to an unprecedented fall in demand.

Several factors mean temporary shortages may not last.

They could abate with a decision by OPEC to open taps to unleash supply it reined in during the first onslaught of COVID, likely new liquid natural gas (LNG) output coming online after a price slump in the last decade and a Chinese government climb-down on price setting which has undercut coal power production.

RENEWABLES A “SOLUTION, NOT A CAUSE”

Producers of gas, coal, and to a lesser extent oil have been caught flat-footed by the economic recovery, much of it sparked by government stimulus spending in energy-intensive industries.

National policies have also played a role in the power supply problems. In China, state mandated power prices mean utilities simply cannot afford to burn coal and sell the power, because the cost of coal is too high to make a profit.

Chinese utilities are producing below capacity to avoid losing money, not because they cannot produce more.

Meanwhile, most gas projects take several years to design and build, so the shortage now reflects investment decisions taken pre-pandemic – and before the energy transition gathered political momentum.

The chief of the Paris-based IEA said energy transition policies were not to blame for the crisis.

“Well-managed clean energy transitions are a solution to the issues that we are seeing in gas and electricity markets today – not the cause of them,” Fatih Birol said in a statement.

2020 LOSSES ERASED

Still, the IEA’s data show global demand for coal, the single largest source of CO2 emissions, surpassed pre-pandemic levels late last year.

Global coal supplies are tight because China, responsible for around half of global output, has tightened safety regulations at mines after a spate of accidents, sapping supply.

That has left China importing more coal from Indonesia, in turn leaving less for other importers such as India.

Global coal demand is set for with a 4.5% increase this year, pushing beyond 2019 levels.

IEA coal consumption

Global natural gas demand fell 1.9% last year, a smaller drop than other energy sources as utilities cranked up power production to meet heating needs during winter.

But the IEA projects gas demand will rise 3.2% in 2021 to over 4 trillion cubic metres, erasing 2020 losses, and pushing demand above 2019 levels.

Rystad LNG demand
Natural gas McKinsey

Cold weather patterns in the northern hemisphere, Oslo-based consultancy Rystad Energy said, “caused a rise in demand for coal, liquefied natural gas (LNG), electricity and even a bit of oil (that) is here to stay”.

LNG accounts for just over 10% of the global supply but is more readily traded globally so can be deployed more easily to cover short-term supply crunches.

“Eye-popping price spikes and their spread between summer and winter will widen, especially for gas, both natural and liquefied,” Rystad added, as prices are higher amid cold winter weather than in summer.

SUPPLY GAPS, SHORT-TERM RALLIES

Last to catch up, oil demand is set to rebound toward pre-pandemic levels above 100 million barrels per day sometime next year, according to four of the major tracking groups.

High prices on oil markets are because OPEC and allied producers still have millions of barrels per day of oil production offline after they made record cuts to supply during the pandemic to match plummeting demand for transport fuel.

Producer club OPEC offers the most robust prediction for a demand rebound, putting the recovery date at the second quarter of 2022.

Oil use rises above 100 million barrels per day in 2022
FGE Oil Demand

In the more distant future, with most forecasters predicting a peak in fossil fuel demand within the next two decades and the IEA recommending against new projects to ensure net zero emissions, broader supply gaps could fuel more price shocks.

McKinsey fossil fuel peak

“Prices for fossil fuels will remain volatile”, said Nikos Tsafos, senior fellow at the Center for Strategic and International Studies (CSIS).

“The risk of a supply-demand imbalance is greater in a market that is shrinking where the case for further investment is weak, which could produce short-term rallies.”

Writing by Noah Browning; editing by David Evans and Ed Osmond

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China power crunch slams factories as coal lobby warns woes could stay until winter

SHENYANG, China, Sept 30 (Reuters) – Small firms caught in China’s prolonged energy crunch are turning to diesel generators, or simply shutting shop, as coal industry officials voiced fears about stockpiles ahead of winter and manufacturing shrank in the world’s no. 2 economy.

Beijing is scrambling to deliver more coal to utilities to restore supply as the northeast grapples with its worst power outages in years, particularly the three provinces of Liaoning, Heilongjiang and Jilin, home to nearly 100 million people.

Gao Lai, who runs an industrial laundry service in Shenyang, the capital of Liaoning, said he was losing money after the power crunch forced him to hire a diesel generator.

“We can afford it for just four days, but if it’s for longer, then the costs are too much, so we can’t survive,” he told Reuters.

“We are willing to make it work because the country needs it, but if (power curbs continue) in the long run, we have to think of a way out.”

The curbs were triggered by shortages of coal, which fuels about two-thirds of China’s power generation.

Thermal coal futures closed Thursday up 4.2% on the Zhengzhou Commodity Exchange after hitting an all-time high of 1,408 yuan ($218) per tonne.

The contract surged 96% in the July to September period on tight supplies and strong demand, its biggest quarterly jump since the first quarter of 2017, spurring the exchange to adopt trading limits.

Official data separately showed China’s factory activity contracted in September for the first time since February 2020. read more

Since last week, more than 100 companies from electronic component manufacturers to gold miners have notified stock markets of production suspensions. Some have said they resumed production in the last two days, however.

The strain comes as the China Coal Industry Association warned it was “not optimistic” about supplies ahead of winter, the peak season for demand, and added that power plant inventories were now “obviously low”.

It urged companies to “spare no effort” to boost supply and focus on sales to smaller, high-energy consumers who have not signed long-term supply contracts.

Although coal production hit a record in August, analysts with Chinese investment bank CICC said a recent spate of mine accidents had made regulators more cautious about approving expansions in output.

They said imports, down 10.3% on the year in the January to August period, were unlikely to rise significantly over the rest of 2021 and more local production had to be “freed”.

SWITCH TO DIESEL

In Shenyang, staff at a steel parts factory that has been shut for the last few days said they had not yet rented a generator but might do so if rationing continued.

Zhai Junwang, manager of a company that rents standalone diesel-fired generators, said brisk business in recent days had led to a doubling in rates.

“There’s very limited stock,” he said, but added that he did not expect the situation to last, as most small factories using his generators were losing money.

The government has said its priority will be to guarantee household power and heating supplies over the winter, as state-run energy firm Sinopec pledged to boost imports of liquefied natural gas. read more

But Citi analysts said in a note they expected power shortages to persist in the peak winter season for heating, most of it coal-fired.

Experts are pressing for fundamental reforms to China’s energy system.

The crisis was caused not by supply shortages but an inflexible grid system, said Zhang Boting of industry research group the China Society for Hydropower Engineering.

“The solution … isn’t simply relying on increasing power generating capacity, but boosting the ability of the grid to adjust peaks and solve the serious mismatches between energy loads and energy supplies,” he said on the group’s website.

($1=6.46107 Chinese yuan renminbi)

Reporting by Gabriel Crossley in Shenyang and Shivani Singh in Beijing; Additional reporting by Min Zhang in Beijing, Brenda Goh and David Stanway in Shanghai, Aizhu Chen in Singapore and Tom Daly; Editing by Clarence Fernandez

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