South Korean coal burn slips again in April
Capacity restrictions cut South Korean coal-fired generation on the year for the 12th consecutive month in April, but an increasingly wide nuclear shortfall early this summer and the start-up of new coal-fired units could support output in the near term.
National power generation grew by 1.9GW on the year to 60.6GW in April while nuclear output fell by 1.6GW to 17.4GW, as unplanned outages at the Kori 2, Hanul 1 and Hanul 2 reactors cut availability by around 1.4GW compared with previous expectations.
This increased South Korea's reliance on fossil fuels, but coal-fired generation still fell because of greater capacity restrictions, driving a particularly sharp rise in gas-fired generation.
State-owned Kepco's available coal-fired capacity fell by 3.7GW on the year in April, according to Argus analysis, with output declining by around 3.2GW as a result. This was partly offset by a rise in coal-fired generation among private-sector utilities, which limited the overall drop in coal burn to 2.6GW.
The government has asked Kepco utilities to voluntarily reduce their coal-fired generation in 2021 to reduce overall emissions. In April, 1.6GW of the 3.7GW year-on-year increase in restrictions was down to voluntary suspensions.
With coal constrained, the country's gas-fired generation rose strongly by 5.8GW on the year to 18.7GW to meet electricity demand.
Kepco coal-fired availability has remained below 2020 levels since April, but overall coal burn is likely to still have been broadly in line with last year in May-June because of a shortfall in nuclear availability and the commissioning of new coal-fired units.
Nuclear schedules suggest that generation may have fallen by around 3.2GW on the year in May, while the continuing outage at Shin Kori 4 looks likely to take 1.4GW of capacity out for the whole of June and depress output by 3.5GW compared with a year earlier.
At the same time, national power demand has recovered from last year's pandemic-induced lows with total generation needing to grow by around 2.9GW on the year in May and 800MW in June, according to Argus analysis.
State-owned gas supplier Kogas' sales to the power sector grew by nearly 80pc on the year in May, which suggests continued growth in gas-fired generation, with coal burn likely to be broadly flat with last year in May-June as new private-sector coal-fired units offset the impact of greater restrictions across the Kepco fleet.
The 1.04GW Goseong 1 coal-fired unit is understood to have begun operations in May, with the 1GW Shin Seocheon 1 and 1.04GW Goseong 2 scheduled to start up in June and October, respectively.
Coal-fired generation may begin to climb on the year in July and August, as recent nuclear maintenance extensions could increase the market's reliance on fossil fuels during the peak cooling period.
A long-term outage at Hanbit 5 has been extended by around two months to 28 September, while the end of maintenance at the Shin Wolsong 1 reactor was pushed back by a month to 26 July, according to operator Korea Hydro and Nuclear Power. Nuclear availability is now expected to average 17.3GW in July and 18.5GW in August.
But nuclear availability is still scheduled to grow strongly on the year in September-December to an average of around 20.7GW, which could weigh on generation from fossil fuels later in the year. This could be particularly weak for power-sector gas demand, as rising oil-linked LNG term contracts support domestic gas prices and potentially help to extend coal's cost advantage for power, which was largely wiped out during the pandemic.
Related news posts
Barge delays at Algiers lock near New Orleans
Barge delays at Algiers lock near New Orleans
Houston, 24 April (Argus) — Barges are facing lengthy delays at the Algiers lock near New Orleans as vessels reroute around closures at the Port Allen lock and the Algiers Canal. Delays at the Algiers Lock —at the interconnection of the Mississippi River and the Gulf Intracoastal Waterway— have reached around 37 hours in the past day, according to the US Army Corps of Engineers' lock report. Around 50 vessels are waiting to cross the Algiers lock. Another 70 vessels were waiting at the nearby Harvey lock with a six-hour wait in the past day. The closure at Port Allen lock has spurred the delays, causing vessels to reroute through the Algiers lock. The Port Allen lock is expected to reopen on 28 April, which should relieve pressure on the Algiers lock. Some traffic has been rerouted through the nearby Harvey lock since the Algiers Canal was closed by a collapsed powerline, the US Coast Guard said. The powerline fell on two barges, but no injuries or damages were reported. The wire is being removed by energy company Entergy. The canal is anticipated to reopen at midnight on 25 April. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Baltimore to temporarily open 4th shipping channel
Baltimore to temporarily open 4th shipping channel
Cheyenne, 24 April (Argus) — The Port of Baltimore is preparing to open another, deeper temporary shipping channel this week so at least some of the vessels that have been stranded at the port can depart. The new 35-ft deep Fort McHenry Limited Access Channel is scheduled to be open to commercially essential vessels from 25 April until 6am ET on 29 April or 30 April "if weather adversely impacts vessel transits," according to a US Coast Guard Marine Safety Information Bulletin. The channel will then be closed again until 10 May. The channel also will have a 300-ft horizontal clearance and 214-ft vertical clearance. This will be the fourth and largest channel opened since the 26 March collapse of the Francis Scott Key Bridge. The Unified Command has said that the new limited access channel should allow passage of about 75pc of the types of vessels that typically move through the waterway. Vessels that have greater than 60,000 long tons (60,963 metric tonnes) of displacement will likely not be able to move through the channel and those between 50,000-60,000 long tons of displacement "will be closely evaluated" for transit. There were seven vessels blocked from exiting the port as of 27 March, including three dry bulk carriers, one vehicle carrier and one tanker, according to the US Department of Transportation. Two of the bulk carriers at berth in Baltimore are Kamsarmax-sized coal vessels, data from analytics firm Kpler show. The US Army Corps of Engineers still expects to reopen the Port of Baltimore's permanent 700-foot wide, 50-foot deep channel by the end of May. The Key Bridge collapsed into the water late last month when the 116,851dwt container ship Dali lost power and crashed into a bridge support column. Salvage teams have been working to remove debris from the water and containers from the ship in order to clear the main channel. By Courtney Schlisserman Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EU adopts sustainability due diligence rules
EU adopts sustainability due diligence rules
Brussels, 24 April (Argus) — The European parliament has formally approved a Corporate Sustainability Due Diligence Directive (CSDDD), which will require large EU companies to make "best efforts" for climate change mitigation. The law will mean that relevant companies will have to adopt a transition plan to make their business model compatible with the 1.5°C temperature limit set by the Paris climate agreement. It will apply to EU firms with over 1,000 employees and turnover above €450mn ($481mn). It will also apply to some companies with franchising or licensing agreements in the EU. The directive requires transposition into different EU national laws. It obliges member states to ensure relevant firms adopt and put into effect a transition plan for climate change mitigation. Transition plans must aim to "ensure, through best efforts" that business models and company strategies are compatible with transition to a sustainable economy, limiting global warming to 1.5°C and achieving climate neutrality by 2050. Where "relevant", the plans should limit "exposure of the company to coal-, oil- and gas-related activities". Despite a provisional agreement, EU states initially failed to formally approve the provisional agreement reached with parliament in December, after some member states blocked the deal. Parliament's adoption — at its last session before breaking for EU elections — paves the way for entry into force later in the year. Industry has obtained clarification, in the non-legal introduction, that the directive's requirements are an "obligation of means and not of results" with "due account" being given to progress that firms make as well as the "complexity and evolving" nature of climate transitioning. Still, firms' climate transition plans need to contain "time-bound" targets for 2030 and in five-year intervals until 2050 based on "conclusive scientific" evidence and, where appropriate, absolute reduction targets for greenhouse gas (GHG) for direct scope 1 emissions as well as scope 2 and scope 3 emissions. Scope 1 refers to emissions directly stemming from an organisation's activity, while scope 2 refers to indirect emissions from purchased energy. Scope 3 refers to end-use emissions. "It is alarming to see how member states weakened the law in the final negotiations. And the law lacks an effective mechanism to force companies to reduce their climate emissions," said Paul de Clerck, campaigner at non-governmental organisation Friends of the Earth Europe, pointing to "gaping" loopholes in the adopted text. By Dafydd ab Iago Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Ayala’s South Luzon coal plant eligible for retirement
Ayala’s South Luzon coal plant eligible for retirement
Manila, 24 April (Argus) — Early decommissioning of coal-fired power plants in the Philippines has advanced with utility Ayala Energy's 246MW South Luzon Thermal Energy eligible for the US-based Rockefeller Foundation's coal to clean credit initiative (CCCI). The Rockefeller Foundation is a non-profit philanthropic group that creates and implements programmes in partnership with the private sector across different industries aimed at reversing climate change. Ayala has been working with the foundation to further shorten South Luzon's operating life from an original decommissioning date of 2040 to 2030. Doing so could result in the reduction of up to 19mn t of carbon emissions, Ayala said. An assessment by the Rocky Mountain Institute, the technical partner of the foundation for its energy-related projects, found that an early retirement date of 2030 instead of the original retirement date of 2040 could yield positive financial, social and climate outcomes. But decommissioning by this date will require carbon finance. Carbon financing will need to cover costs associated with the early retirement of the power plant's power supply contract, costs associated with 100pc clean replacement of the plant's power generation, plant decommissioning and transition support for workers affected by the plant's early closure, Ayala said. Ayala's listed arm ACEN welcomed the plant's eligibility for the CCCI programme, as its retirement is part of the company's goal to have its power generation portfolio composed solely of 100pc renewable sources by 2025. The Philippines' Department of Energy (DOE) said if successful, the pilot programme could serve as a basis for the development of other early retirement efforts as part of the country's plan to reduce carbon emissions. The DOE is seeking the early decommissioning of coal-fired power plants older than 20 years with a combined total capacity of 3.8GW by 2050, as part of the Philippines' transition to clean energy. By Antonio delos Reyes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more