Tag Archives: COAPWR

German economy minister rules out keeping nuclear plants running to save gas

German Economy and Climate Action Minister Robert Habeck speaks during a news conference on the future use of liquefied natural gas (LNG), in Berlin, Germany August 16, 2022. REUTERS/Lisi Niesner/File Photo

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  • Economy minister says nuclear plants save minimal gas
  • May have to keep plant running in Bavaria for network stability
  • Scholz says nuclear plant stress test results due within weeks

BERLIN, Aug 21 (Reuters) – German Economy Minister Robert Habeck ruled out on Sunday extending the lifespan of the country’s three remaining nuclear power plants in order to save gas, saying it would save at most 2 percent of gas use.

These savings were not sufficient to be worth reopening the debate about the exit from nuclear energy given the consensus on the topic, he said during a discussion with citizens at the government’s open-door day.

Former Chancellor Angela Merkel initiated legislation to halt the use of nuclear power by the end of this year after the Fukushima nuclear disaster of 2011 with a majority of voters in favour. But attitudes are shifting amid fears of an energy crisis this winter following a decline in Russian gas deliveries – with the three-way coalition itself divided on the matter. read more

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“It is the wrong decision given the little we would save,” said Habeck, a member of the Greens party, which has it roots in the anti-nuclear movement of the 1970s and 80s.

On the other side of the debate, Finance Minister Christian Lindner of the pro-business Free Democrats reiterated his stance that it would be better to extend the lifespans of nuclear plants for a limited time than to bring coal plants back online.

“We shouldn’t be too picky, but reserve all possibilities,” he said, adding that he would be open to an extension of “several years” in the current circumstances.

Separately to the debate over gas savings measures, Habeck said he was open to extending the lifespan of one nuclear power plant in Bavaria if a stress test showed this was necessary to ensure the stability and supply of the electricity network in winter, he said.

Habeck accused the southern state and manufacturing hub, which depends on gas-fired power plants and has few coal-fired plants, of possibly contributing to problems by failing build up wind power production and improve the network.

The fact that Germany is having to supply France with electricity due to a drop in nuclear output is another factor at play.

German Chancellor Olaf Scholz said the result of the stress test should come towards the end of the month, or the beginning of next month – and only then would a decision be made.

The situation in France, where nearly half its reactors are offline because of corrosion problems and maintenance, showed how problematic the technology was though, he said.

New plants were so expensive that they pushed up electricity prices unlike renewable energies, he said.

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Reporting by Markus Wacket and Andreas Rinke; Writing by Sarah Marsh; editing by David Evans

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Russian-occupied Kherson cut off as Ukraine counter-attacks – Britain

  • Ukraine counter-offensive in Kherson gathering momentum – UK
  • Russia in ‘massive redeployment’ in south, Ukraine says
  • Russian-backed forces take over Vuhlehirsk plant
  • Blinken says he plans call with Russia’s Lavrov

July 28 (Reuters) – A Ukrainian counter-offensive has virtually cut off the Russian-occupied southern city of Kherson and left thousands of Russian troops stationed near the Dnipro River “highly vulnerable”, British defence and intelligence officials said on Thursday.

Ukraine has made clear it intends to recapture Kherson, which fell to Russia in the early days of the invasion launched by Russian President Vladimir Putin on Feb 24.

Britain’s Defence Ministry said Ukrainian forces have probably established a bridgehead south of the Ingulets River, and had used new, long-range artillery to damage at least three of the bridges crossing the Dnipro.

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“Russia’s 49th Army, stationed on the west bank of the Dnipro River, now looks highly vulnerable,” it said in a regular intelligence bulletin on Twitter, adding that Kherson was virtually cut off from the other territories occupied by Russia.

“Its loss would severely undermine Russia’s attempts to paint the occupation as a success.”

Oleksiy Danilov, secretary of Ukraine’s National Security and Defence Council, earlier tweeted that Russia was concentrating “the maximum number of troops” in the direction of the Kherson but gave no details.

Oleksiy Arestovych, an adviser to Ukrainian President Volodymyr Zelenskiy, said Russia was conducting a “massive redeployment” of forces from the east to the south in what amounted to a strategic shift from attack to defence.

Zelenskiy said Ukraine would rebuild the Antonivskyi bridge over the Dnipro and other crossings in the region.

“We are doing everything to ensure that the occupying forces do not have any logistical opportunities in our country,” he said in a Wednesday evening address.

Russian officials had earlier said they would turn instead to pontoon bridges and ferries to get forces across the river.

Russian-backed forces on Wednesday said they had captured the Soviet-era coal-fired Vuhlehirsk power plant, Ukraine’s second-largest, in what was Moscow’s first significant gain in more than three weeks. read more

DIPLOMACY

Russia invaded Ukraine on Feb. 24 in what Moscow calls a “special military operation” to demilitarise and “denazify” its neighbour. Ukraine and its allies call the invasion an unprovoked war of aggression.

U.S. Secretary of State Antony Blinken said he planned a phone conversation with Russian Foreign Minister Sergei Lavrov – the first between the two diplomats since before the start of the war.

The call in the coming days would not be “a negotiation about Ukraine,” Blinken said at a news conference, restating Washington’s position that any talks on ending the war must be between Kyiv and Moscow.

Russia has received no formal request from Washington about a phone call between Blinken and Lavrov, TASS news agency reported.

The United States has made “a substantial offer” to Russia for it to release U.S. citizens WNBA star Brittney Griner and former U.S. Marine Paul Whelan, Blinken said, without giving details of what the United States was offering in return. read more

Blinken said he would press Lavrov to respond to the offer.

A source familiar with the situation confirmed a CNN report that Washington was willing to exchange Russian arms trafficker Viktor Bout, who is serving a 25 year-prison sentence in the United States, as part of a deal.

Aside from discussing Americans detained by Russia, Blinken said he would raise with Lavrov the tentative deal on grain exports reached last week between Russia, the United States, Turkey and Ukraine.

Russia reduced gas flows to Europe on Wednesday in an energy stand-off with the European Union. It has blocked grain exports from Ukraine since invading, but on Friday agreed to allow deliveries through the Black Sea to Turkey’s Bosphorus Strait and on to global markets. read more

The deal was almost immediately thrown into doubt when Russia fired cruise missiles at Odesa, Ukraine’s largest port, on Saturday, just 12 hours after the deal was signed.

Before the invasion and subsequent sanctions, Russia and Ukraine accounted for nearly a third of global wheat exports.

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Reporting by Reuters bureaux; Writing by Grant McCool and Stephen Coates; Editing by Cynthia Osterman and Lincoln Feast.

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Ukraine’s ports to reopen under deal to be signed Friday, Turkey says

  • U.N., Turkey worked to broker Ukraine-Russia grains export deal
  • Hopeful sign global food crisis could be eased
  • Ukraine’s Zelenskiy sees potential for battleground gains

July 22 (Reuters) – Russia and Ukraine will sign a deal on Friday to reopen Ukraine’s Black Sea ports to grain exports, Turkey said, raising hopes that an international food crisis caused by Russia’s invasion could be eased.

Ukraine and Russia, both among the world’s biggest exporters of food, did not immediately confirm Thursday’s announcement by the office of the Turkish presidency. But in a late night video address Ukrainian President Volodymyr Zelenskiy hinted his country’s Black Sea ports could soon be unblocked.

The blockade by Russia’s Black Sea fleet has reduced supplies to markets around the world and sent grain prices soaring since Russian President Vladimir Putin ordered troops into neighbouring Ukraine on Feb. 24.

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Full details of the agreement were not immediately released. U.N. Secretary-General Antonio Guterres was going to Turkey, a U.N. spokesperson said. The agreement was due to be signed on Friday at 1330 GMT, Turkish President Tayyip Erdogan’s office said. read more

Zelenskiy, whose address mainly focused on Ukrainian forces’ potential to make gains on the battlefield, said: “And tomorrow we also expect news for our state from Turkey – regarding the unblocking of our ports.”

SANCTIONS

Moscow has denied responsibility for worsening the food crisis, blaming instead a chilling effect from Western sanctions for slowing its own food and fertiliser exports and Ukraine for mining its Black Sea ports.

U.S. State Department spokesperson Ned Price said Washington would focus on holding Moscow accountable for carrying out the agreement.

The United Nations and Turkey have been working for two months to broker what Guterres called a “package” deal – to resume Ukraine’s Black Sea grain exports and facilitate Russian grain and fertiliser shipments.

Russia on Thursday said the latest round of European Union sanctions would have “devastating consequences” for security and parts of the global economy.

Foreign Ministry spokesperson Maria Zakharova said in a statement that the 27-nation bloc proposed to ease some earlier sanctions in a bid to safeguard global food security, and Moscow hoped this would create conditions for the unhindered export of grain and fertilisers.

BATTLEFIELD

Zelenskiy met senior commanders on Thursday to discuss weapons supplies and intensifying attacks on Russians. read more

“(We) agreed that our forces have the strong potential to advance on the battlefield and inflict significant new losses on the occupiers,” Zelenskiy said in his video address.

Ukraine has accused Russia of stepping up missile strikes on cities in recent weeks to terrorise its population. Moscow denies attacking civilians and says all its targets are military.

Kyiv hopes that Western weapons, especially longer-range missiles such as U.S. High Mobility Artillery Rocket System (HIMARS) will allow it to counterattack and recapture territory lost in the invasion.

The main frontlines have been largely frozen since Russian forces seized the last two Ukrainian-held cities in eastern Luhansk province in battles in late June and early July. Russian forces are also focused on neighbouring Donetsk province.

Russia aims to fully capture all of Donetsk and Luhansk on behalf of its separatist proxies.

It claimed control of the southern port city of Mariupol two months ago after a brutal battle that killed thousands and forced hundreds of thousands to flee.

Those who stayed behind now face a new battle: how to survive without functioning water or sewage supplies in the city where about 90% of buildings were destroyed, and where rubbish and human remains rot in the rubble under the summer heat.

“You start a fire, you cook food, breakfast for the children,” one resident told Reuters. “In the afternoon you go find some work or get your dry ration to feed the children dinner. It’s Groundhog Day, as they say: you wake up and it’s always the same.”

Russia called its invasion a “special military operation” to rid Ukraine of fascists, an assertion the Ukrainian government and its Western allies said was a baseless pretext for an unprovoked war.

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Reporting by Reuters bureaux; writing by Grant McCool; Editing by Cynthia Osterman and Stephen Coates

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Russian gas flows to Germany again, Moscow eyes giant Ukrainian power plant

  • Major pipeline carrying Russian gas to Europe restarts
  • It is operating at reduced capacity however
  • Russian missiles strike Ukrainian cities
  • UK says Russia eyeing giant power plant
  • CIA chief says Putin healthy amid huge Russian losses

LONDON/KYIV, July 21 (Reuters) – Russian gas began flowing to Europe via a major pipeline on Thursday after a 10-day pause but fears of broader supply cuts remained and Russian forces in Ukraine were seen eyeing the capture of the country’s second biggest power plant.

Russian troops shelled cities across eastern and southern Ukraine, Ukrainian officials said, and hit two schools as Moscow’s forces carried out limited ground operations in preparation for what is seen as a wider offensive.

Reuters was unable to immediately verify Ukrainian assertions about Russian shelling, which they say has been intense for several weeks, and it was not immediately clear if anyone had been hurt in the strikes on the schools.

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The resumption of gas flows via the Nord Stream 1 pipeline to Germany ended a nerve-jangling 10 days for Europe in which politicians expressed concern Russia might not restart them at a time when alternative energy supplies are tight and prices high. read more

The pipeline has traditionally carried more than one third of Russia’s gas exports to Europe but was operating at only 40% of its capacity after Kremlin-controlled Gazprom cut gas exports in a row over the repair of a turbine.

“In view of the missing 60% (capacity) and the political instability, there is no reason yet to give the all-clear,” Klaus Mueller, president of Germany’s network regulator, wrote on Twitter.

European Union Commission President Ursula von der Leyen has accused Russia of trying to blackmail Europe by using energy as a weapon, something Moscow, which is unable to swiftly redirect all of its gas to other markets, has denied. read more

Moscow has criticised EU and U.S. sanctions on Russia over its Feb. 24 invasion of Ukraine and military help to Kyiv, saying it had to undertake what it calls a “special military operation” to prevent NATO using Ukraine to threaten Russia.

Ukraine says it needs the weapons to defend itself against what it and the West cast as an unprovoked imperial-style war of aggression designed to steal its land and erase its national identity.

INTENSE SHELLING

The Ukrainian military reported heavy and sometimes fatal Russian shelling in the east and south of the country amid what its said were largely failed attempts by Russian ground forces to advance in the eastern Donetsk region.

Donetsk regional governor Pavlo Kyrylenko said Russian missile strikes had destroyed two schools in the cities of Kramatorsk and Kostiantynivka and had also hit the city of Bakhmut but there was no information yet on casualties.

“Russia is intentionally destroying our cities and towns. Do not expose yourself to danger – evacuate,” he wrote on Telegram.

Russia says it does not deliberately target civilians and uses high precision weapons to degrade Ukrainian military targets, but the war has flattened cities, particularly in Russian-speaking areas in the east and southeast of Ukraine.

The mayor of Kharkiv, Igor Terekhov, in his Telegram channel said that one of the most densely populated areas of the city was being shelled and asked people not to leave shelters. Oleh Synehubov, governor of the Kharkiv region, said two people had been killed and 19 wounded, four of them seriously.

Vitaly Kim, governor of the southern Mykolaiv region, said the region had been targeted with seven S-300 missiles. One person had been wounded, he said, and infrastructure, energy facilities and storage facilities damaged.

Multiple blasts were also heard in the Russian-controlled southern region of Kherson overnight and into Thursday, Russian news agency TASS reported.

Reuters could not independently verify the reports.

HEAVY LOSSES

CIA Director William Burns said on Wednesday that the United States estimated that Russian casualties in Ukraine had so far reached around 15,000 killed and perhaps 45,000 wounded and that Ukraine has suffered what he called significant losses too.

Russia classifies military deaths as state secrets even in times of peace and has not updated its official casualty figures frequently during the war. read more

Scotching persistent speculation that Putin may be suffering from health problems, Burns also said that the Kremlin chief was healthy as far as he knew.

British military intelligence said on Thursday that Russian forces were likely closing in on Ukraine’s second biggest power plant at Vuhlehirska, 50 km (31 miles) north-east of Donetsk.

“Russia is prioritising the capture of critical national infrastructure, such as power plants,” the ministry, which supports Ukrainian forces, said in a regular bulletin.

It said taking the power plant, a Soviet-era coal-fired facility, was also probably part of Russia’s attempt to regain momentum as it tried to advance towards the key cities of Kramatorsk and Sloviansk in eastern Ukraine.

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Reporting by Reuters bureaux; Writing by Andrew Osborn; Editing by Philippa Fletcher

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Germany risks recession as Russian gas crisis deepens

Pipes at the landfall facilities of the ‘Nord Stream 1’ gas pipeline are pictured in Lubmin, Germany, March 8, 2022. REUTERS/Hannibal Hanschke/File Photo

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  • More Europeans activate first stage of gas crisis plans
  • Surging gas price adds to policymakers’ inflation headache
  • Slowing flows hinder efforts to refill storage for winter
  • ‘We have a problem’, says German regulator

BERLIN/COPENHAGEN, June 21 (Reuters) – Germany faces certain recession if already faltering Russian gas supplies stop completely, an industry body warned on Tuesday, as Italy said it would consider offering financial backing to help companies refill gas storage to avoid a deeper crisis in winter.

European Union states from the Baltic Sea in the north to the Adriatic in the south have outlined measures to cope with a supply crisis after Russia’s invasion of Ukraine put energy at the heart of an economic battle between Moscow and the West.

The EU relied on Russia for as much as 40% of its gas needs before the war – rising to 55% for Germany – leaving a huge gap to fill in an already tight global gas market. Some countries have temporarily reversed plans to shut coal power plants in response.

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Gas prices have hit record levels, driving a surge in inflation and adding to the challenges for policymakers trying to haul Europe back from an economic precipice.

Germany’s BDI industry association cut its economic growth forecast for 2022 on Tuesday to 1.5%, revising it down from 3.5% expected before the war began on Feb. 24. It said a halt in Russian gas deliveries would make recession in Europe’s largest economy inevitable. read more

Russian gas is still being pumped via Ukraine but at a reduced rate and the Nord Stream 1 pipeline under the Baltic, a vital supply route to Germany, is working at just 40% capacity, which Moscow says is because Western sanctions are hindering repairs. Europe says this is a pretext to reduce flows.

German Economy Minister Robert Habeck said on Tuesday the reduced supplies amounted to an economic attack and were part of Russian President Vladimir Putin’s plan to stir up fear.

“This is a new dimension,” Habeck said. “This strategy cannot be allowed to succeed.”

The slowdown has hampered Europe’s efforts to refill storage facilities, now about 55% full, to meet an EU-wide target of 80% by October and 90% by November, a level that would help see the bloc through winter if supplies were disrupted further.

Italian Ecological Transition Minister Roberto Cingolani said Italy needed to accelerate its refilling efforts and Rome should consider how to help companies fund purchases of gas for storage.

An Italian government source said a state guarantee could be an option to lower the cost of financing.

“Gas currently is so expensive that operators cannot put money into it,” Cingolani said. read more

The benchmark gas price for Europe was trading around 126 euros ($133) per megawatt hour (MWh) on Tuesday, below this year’s peak of 335 euros but still up more than 300% on its level a year ago.

‘WE HAVE A PROBLEM’

Italy, as well as others, such as Austria, Denmark, Germany and the Netherlands, has activated the first early warning stage of its three-stage plan to cope with a gas supply crisis.

As part of Germany’s contingency plans, the Bundesnetzagentur gas regulator outlined details of a new auction system to start in coming weeks, aimed at encouraging manufacturers to consume less gas.

The head of the Bundesnetzagentur questioned whether current gas deliveries would get the country through the winter, although he earlier said it was too soon to declare an all-out emergency, or the third stage of the crisis plan.

“As it stands today, we have a problem,” Bundesnetzagentur President Klaus Mueller said on the sidelines of an industry event in the German city of Essen.

The CEO of Germany’s largest power utility RWE (RWEG.DE) Markus Krebber said Europe had little time to come up with a plan.

“How would we re-distribute the gas if we were fully cut off? There is currently no plan … at European level … as every country is looking at their emergency plan,” he told the same event.

The high European price has attracted more liquefied natural gas (LNG) cargoes, but Europe lacks the infrastructure to meet all of its needs from LNG, a market that was stretched even before the Ukraine war.

Disruptions to a major U.S. producer of LNG that provided shipments to Europe add to the challenge.

Europe is seeking more pipeline supplies from its own producers, such as Norway, and other states, including Azerbaijan, but most producers are already pushing at the limits of output.

As the crisis extends across Europe, even small consumer Sweden has joined European allies in triggering the first stage of its energy crisis plan.

The state energy agency said on Tuesday supplies were still robust but it was signalling “to industry players and gas consumers connected to the western Swedish gas network, that the gas market is strained and a deteriorating gas supply situation may arise”.

Sweden, where gas accounted for 3% of energy consumption in 2020, depends on piped gas supplies from Denmark, where storage facilities are now 75% full. Denmark activated the first stage of its emergency plan on Monday.

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Reporting by Rachel More and Paul Carrel in Berlin, Stine Jacobsen in Copenhagen, Nina Chestney in London, Giuseppe Fonte and Francesca Landini in Rome, Christoph Steitz and Vera Eckert in Frankfurt; Writing by Edmund Blair and Barbara Lewis; Editing by Carmel Crimmins and Mark Potter

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Russians advance, Zelenskiy expects escalation as EU set to welcome Ukraine

  • European Union to decide on Ukraine membership bid
  • Zelenskiy says battle for Donbas to intensify
  • City of Sievierodonetsk focus of Russian attacks
  • NATO’s Stoltenberg says war could last for years

KYIV, June 20 (Reuters) – Russian forces captured territory along a frontline river in eastern Ukraine on Monday, and President Volodymyr Zelenskiy predicted Moscow would escalate attacks ahead of a summit of European leaders expected to welcome Kyiv’s bid to join the EU.

Moscow’s separatist proxies claimed to have captured Toshkivka, a town on the mostly Ukrainian-held western bank of the Siverskyi Donets river, south of Sievierodonetsk, which has become the main battlefield city in recent weeks.

Ukraine acknowledged that Moscow had success in Toshkivka and said the Russians were trying to gain a foothold there to make a breakthrough into the wider, Ukrainian-held pocket of the eastern Donbas region. It also confirmed a Russian claim to have captured Metyolkine on Sievierodonetsk’s eastern outskirts.

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“Obviously, this week we should expect from Russia an intensification of its hostile activities,” Zelenskiy said in a Sunday nightly video address. “We are preparing. We are ready.”

Moscow, for its part, denounced a decision by EU member Lithuania to ban transport of some basic goods to Kaliningrad, a Russian outpost on the Baltic Sea surrounded by EU territory.

The Lithuanian ban, which took effect on Saturday, blocks shipments of coal, metals, construction materials and advanced technology to the outpost. Kremlin spokesperson Dmitry Peskov called the move illegal and unprecedented, and said Moscow would announce a response soon.

EU leaders at a summit later this week are expected to give their blessing to Ukraine becoming an official candidate to join, a decision that will be marked as a triumph in Kyiv.

Though it would take years for Ukraine to enter the EU, for the bloc to reach deep into the heart of the former Soviet Union would bring about one of Europe’s biggest economic and social transformations since the Cold War. Ukraine applied to join just four days after Russian President Vladimir Putin ordered his troops across the border in February. read more

Putin says the “special military operation” is aimed at disarming a neighbour Russia views as a threat and protecting Russian speakers there. Kyiv believes Moscow’s true aim is to restore control over Ukraine and erase its national identity.

In the strongest step yet proposed by Kyiv to enforce a cultural break with Moscow, Ukraine’s parliament passed bills on Sunday that would ban the publication of books or the public broadcast of music by citizens of post-Soviet Russia. read more

The measures, which require Zelenskiy’s signature to become law, “are designed to help Ukrainian authors share quality content with the widest possible audience, which after the Russian invasion do not accept any Russian creative product on a physical level”, said Culture Minister Oleksandr Tkachenko.

TOSHKIVKA FOOTHOLD

Russian forces were defeated in an assault on the capital Kyiv in March, but have since launched a new assault to capture more territory in the east and solidify their hold on the south.

The war has entered a brutal attritional phase in recent weeks, with Russian forces concentrating their overwhelming artillery firepower on a Ukrainian-held pocket of the Donbas, which Moscow claims on behalf of separatists.

Much of the fighting has taken place along the Siverskyi Donets river. Russia’s TASS news agency quoted Vitaly Kiselev, an aide to the interior minister of the self-proclaimed Russian-backed Luhansk People’s Republic separatist administration, as saying on Monday the town of Toshkivka had been “liberated”.

The town is located on the river’s western bank, south of Sievierodonetsk’s twin city Lysychansk, a key Ukrainian bastion.

Luhansk regional governor Serhiy Gaidai, acknowledged that a Russian attack on Toshkivka “had a degree of success”. Russian forces were trying to break through and gain a foothold there and near the small village of Ustinovka further north along the river, he said. The Russians were bringing a huge amount of heavy equipment there including tanks.

He also confirmed Russia’s claim to have captured Metyolkine on Sievierodonetsk’s eastern outskirts. “Unfortunately, we do not control Metyolkine today,” he said.

Sievierodonetsk Mayor Oleksander Stryuk said Russian forces controlled about two-thirds of the city, including most residential areas, and Moscow kept throwing forces at the Ukrainians in an attempt to take over completely.

“I hope that the city will hold and, once it has the advantage in firepower, we will be able to liberate it without leaving it first,” he said.

International concern has focused on trying to restore Ukrainian exports of food, now shut by a de facto Russian blockade. Ukraine is one of the world’s leading sources of grain and food oils, leading to fears of global shortages and hunger.

“We call on Russia to deblockade the ports,” EU foreign policy chief Josep Borrell told reporters. “It is inconceivable, one cannot imagine that millions 4of tonnes of wheat remain blocked in Ukraine while in the rest of the world people are suffering hunger.”

“This is a real war crime, so I cannot imagine that this will last much longer,” he said on arriving to a meeting of EU foreign ministers in Luxembourg.

Russia blames the food crisis on Western sanctions curbing its own exports.

The war has also disrupted global energy markets, including Russian shipments of oil and gas to Europe, still the continent’s main source of energy and Moscow’s primary source of income. Moscow blames EU sanctions for a decline in gas export pipelines, saying the sanctions had prevented it from restoring pumping equipment sent for repairs.

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Reporting by Reuters bureaus, writing by Peter Graff, editing by Mark Heinrich

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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

Our Standards: The Thomson Reuters Trust Principles.

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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

Our Standards: The Thomson Reuters Trust Principles.

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