Latest market news

Utah power plant takes Illinois basin coal

  • : Coal, Electricity
  • 24/08/06

The Intermountain Power Project (IPP) in Utah further diversified its coal supply earlier this year to offset output declines from coal mines in the state.

The plant took 12,315 short tons (11,351 metric tonnes) of coal from Alliance Resource Partners' Gibson mine in Indiana in April, operating data collected by the US Energy Information Administration (EIA) shows. It also has taken 270,824st of Powder River basin (PRB) coal from Arch Resources' Black Thunder mine in Wyoming, extending a trend started in 2023 as Utah coal supply was in earlier stages of dwindling.

April's delivery of coal from the Gibson mine was the first time since at least 2008 that IPP has taken coal from the Illinois basin. Coal mined east of the Mississippi River typically does not travel west at least partly because of logistics challenges. It takes at least two railroads to take coal from the Illinois basin to Utah, and not all power plants can do that.

According to EIA data, no other power plants in Utah and Colorado took any Indiana-sourced coal in at least ten years.

IPP declined to comment on whether it will continue to take Illinois basin coal. Alliance Resource Partners did not respond to requests for comment.

The coal received from the Gibson mine in April was part of a test burn. It is a higher heat content coal than the PRB supply and closer to what Utah producers produce, but also higher sulfur than coal from the PRB and Utah.

Prior to last year, IPP only took coal from Wyoming, Colorado and Utah.

IPP started receiving PRB coal in March 2023 as Utah coal producers struggled to meet contractual commitments. It also took coal from Colorado in 2023.

Utah coal producers still are not supplying what they had previously agreed to, according to people familiar with the situation. This has forced IPP to idle one of its two generating units during non-peak seasons and to look further afield for fuel supply.

Output from the Uinta basin dropped to a 38-year low in the second quarter partly because American Consolidated Natural Resources' Lila Canyon mine, which incurred a fire in September 2022, was closed in January. Wolverine Fuel's Skyline #3 - the largest active mine in Utah – decreased output by 71pc to 244,377st in the second quarter because of the longwall move.

The delivery from the Gibson mine in April represents a fraction of that mine's output. In the first half of this year, the mine produced 2.89mn st, up from 2.67mn st a year earlier, MSHA data show.

IPP's demand for PRB and Illinois basin coals may be short-lived. The power plant's owners expect to switch to natural gas in mid-2025, after operator Intermountain Power Agency (IPA) completes construction of an 840MW gas unit in 2025. IPP's largest customer, the Los Angeles Department of Water and Power, is required by the state law to stop using coal-fired generation by 2026. IPA declined to comment on fuel purchasing.

In the first five months of 2024, IPP took 888,378st of coal from Colorado and Utah coal mines, according to EIA. That is up from 766,705st IPP has taken from the states' mines during the same five months last year. Shipments of PRB coal also increased compared with January-May 2023, when they had totaled 138,030st.


Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/10/04

Sheinbaum targets $40bn energy transition plan

Sheinbaum targets $40bn energy transition plan

New York, 4 October (Argus) — The ambition of Mexico's new President Claudia Sheunbaum to reach 45pc of renewable generation in the electricity mix by 2030 will include an investment plan of $35bn-40bn, sources familiar with the matter said. Sheinbaum announced a more ambitious goal for renewables and promised to launch an energy transition plan in coming days during her inaugural address on 1 October. The awaited document will include specific strategies and projects to be developed in the first days of her term, Alonso Romero, deputy director of commercial strategy at state utility CFE and one of Sheinbaum's energy advisors during her campaign, told Argus . There will be around $6bn/yr in new investments under Sheinbaum's six-year term to develop a pipeline of 60GW in new capacity, mostly renewable, he added. The new administration will propose several types of contracts to developers that guarantee CFE holds the largest participation in the sector, said Romero. There have been meetings between Sheinbaum's representatives and banks to show the plan's potential, said a source familiar with the topic. But potential investors are still waiting to see if congress passes the bill to reform the energy sector sent by former president Andres Manuel Lopez Obrador. That energy bill is crucial in Sheinbaum's plan, as it will lay the groundwork for further legal modifications, said Romero. It will be easier to attract the private sector into investing in projects if a long-term contract with CFE provides support as the final source of payment in case of a default, said Romero. Under current law, CFE cannot directly buy electricity from a new power plant unless it comes from a long-term auction. Congress would need to approve the bill and then modify the electricity law to lift that prohibition, so lenders would have certainty that CFE can sign long-term contracts with new renewable or thermal power plants without holding a tender, said Romero. The Sheinbaum administration is considering signing Build, Lease and Transfer (BLT) contracts for some projects, said Romero. This way, CFE will have the opportunity to acquire the asset after 10-15 years of being operated by another company. Hopes and fears Sheinbaum's bet on the energy transition could be seen as a hopeful message for the renewables sector, but investors still need clarity on the rules in the electricity market. Market players have been worried that Sheinbaum will continue her predecessor's energy policy that for years openly attacked private-sector renewable companies. "It is clear that Sheinbaum is trying to make the energy transition her own mark," said Jesus Carrillo, energy expert at Mexican think tank Instituto Mexicano para la Competitividad. "However, it is risking her credibility by setting such ambitious goals." In 2023, Mexico generated just 24.3pc of its electricity from clean sources, despite that category holding 32pc of installed capacity, according to energy ministry (Sener) data. Reaching the new target could be possible if Sheinbaum's administration pulled off a clear path to speed up investments in renewable generation, the sector said. "The energy transition path goes much faster when the government leads it," said Romero. Private-sector renewable companies are willing to finally put an end to the impasse during Lopez Obrador's term. But the legislative electricity proposal along with modifications that will overhaul the judicial power in upcoming months create a worrisome business environment in Mexico, sources said. The Sheinbaum administration needs to provide not only a clear but also attractive legal framework so the private sector can provide the funds and capabilities to aid in this energy transition plan, sources said. Mexico's electricity system requires around $130bn in new investments to meet the country's growing demand from 2024-2030, according to a recent analysis from business trade group Coparmex. By Edgar Sigler Mexico’s share of clean electricity % Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

France's wind sector weighs impact of new government


24/10/04
24/10/04

France's wind sector weighs impact of new government

London, 4 October (Argus) — Doubts over government policy on onshore wind competed with optimism over offshore wind at the French wind sector's annual conference in Paris on Wednesday. The event took place a day after the first policy announcements of prime minister Michel Barnier , in which he said his government would "better handle the impacts" of wind energy. No more detail is available on what this will mean exactly, although far-right party Rassemblement National (RN), which props up Barnier's minority government, is strongly opposed to wind energy. And of two of the parties in his coalition, president Emmanuel Macron's EPR and Barnier's own Les Republicans (LR), the former is supportive of wind, while the latter is more sceptical without being downright opposed, one developer told Argus . While junior energy minister Olga Givernet told the conference of her intention to reduce the delays developers face, participants Argus spoke to feared Barnier's evocation of "impacts" could mean an expansion of barriers to building new capacity. "We already take the impacts into account," one developer said, noting that firms perform extensive studies and undertake environmental impact assessments (EIAs). And legal challenges are one of the main obstacles slowing down capacity increases, with one developer calling for better-trained judges to reduce the number of "arbitrary" decisions made in these cases. Delays in receiving grid connection and EIAs were other factors developers cited. But the conference was more upbeat on offshore wind. The government will in the coming weeks announce priority zones for offshore wind, which will allow it to launch tenders for 8-10GW of capacity by the end of the year. These will contribute to the country's goal of reaching 18GW of installed capacity by 2035. At the same time, the increasing occurrence of negative price hours threatens the sector, according to industry body France Renouvelables. Negative prices can pose a threat to grid stability, according to grid operator RTE. Large quantities of renewables can be shut down suddenly at the beginning of negative price hours, leading to a sharp output slope, which the grid operator has little visibility of, RTE said. Negative prices are a problem for operators too, even those under contracts for difference (CfDs) which are not directly exposed, according to Jean-Francois Petit of renewables operator Boralex. Operators typically shut down during negative pricing hours, but receive only partial compensation for lost output, he said, while the requirement that production be completely halted can be difficult operationally. And slow progress on repowering could represent another brake to capacity increases. Repowering is not underpinned by primary legislation, but only by ministerial circulars, one developer said, which offers little certainty to firms that want to undertake it. Meanwhile, height limits imposed for aviation constraints and landscape protection reduce the potential to add taller, more powerful turbines. French turbines are typically much smaller than those in neighbouring countries because of these height limits, which reduces access to higher-quality wind resource. And an open question remains over potential local content requirements in future tenders for CfDs. These requirements, enabled by the European Net Zero industry Act (NZIA) and supported by energy regulator the CRE, could prove a fillip for manufacturers of energy-transition materiel such as wind turbines, hobbled by competition from Chinese manufacturers. But incorporation of these requirements would push up costs, requiring higher strike prices at CfDs and more public subsidy. Energy minister Givernet did not appear to give the conference any hints on which way the government would lean, saying that control over both energy prices and security of supply were absolute priorities. Reaching France's goals by 2028 of 33.2-34.7GW of onshore capacity would require an installation rate of 2.3-2.7 GW/yr, roughly twice rates reached in recent years ( see graph ). By Rhys Talbot France onshore capacity and 2028 goals Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Dockworkers end US port strike


24/10/03
24/10/03

Dockworkers end US port strike

Houston, 3 October (Argus) — US dockworkers have ended a port strike that had shut container terminals from Maine to Texas, after their union late Thursday struck a tentative agreement on wages. The International Longshoremen's Association (ILA) has agreed to extend its contract with the United States Maritime Alliance (USMX) until 15 January to provide time for negotiating the remaining outstanding issues, the ILA said in a statement. The USMX includes containership owners, terminal operators and port associations. "Effective immediately, all current job actions will cease and all work covered by the master contract will resume," the ILA said. The strike, which started on 1 October, had forced containership operators to queue up outside US east coast ports. Major container shipping agencies such as Maersk had initiated surcharges for US east coast and Gulf coast-bound containers later in October. By Jack Kaskey Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Japan to phase out inefficient coal plants by 2030


24/10/03
24/10/03

Japan to phase out inefficient coal plants by 2030

London, 3 October (Argus) — Japan will target a phase-out of inefficient coal plants by 2030, as it continues its energy transition push, although the country is still yet to provide further details on any broader movement away from coal. "By 2030, the inefficient use of coal-fired power will be phased out," Japan's newly appointed environment minister Keiichiro Asao said at a press conference on Wednesday. Asao was appointed after Japan's new prime minister Shigeru Ishiba took office this week. Japan had earlier pledged to phase out "unabated" coal-fired plants by 2035 , or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways". But inefficient, sub-critical coal plants — with below 40pc efficiency — make up only 22pc of Japan's total fleet, while 25pc is supercritical and 53pc is ultra-supercritical. The sub-critical plants probably produce less of Japan's coal-fired electricity, given the generation margins for them will fall below the majority of gas-fired generation in the merit order. This means Japan's overall coal-fired power generation is likely to be less impacted than the overall change to its coal fleet capacity. Japan has been considered a laggard in green energy transition among its G7 counterparts, but the country's coal demand could decline to some extent as a result of global divestment pressure. But coal is still key to the resource-poor country, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence. Japan's new government has recently announced that it will be restarting more of its nuclear reactors to help meet its power demand. Utility Shikoku Electric Power reactivated its sole nuclear reactor at Ikata on 29 September, after closing the unit for turnaround since 19 July. But the utility pushed back the restart of the 890MW Ikata No.3 nuclear reactor on Wednesday because of a technical issue during the process of resuming power generation. Japanese thermal coal imports rose by 10pc to 9.25mn t on the year in August, owing to increased deliveries from Australia. But this was 4pc lower than the past five-year August average of 9.6mn t. By Shreyashi Sanyal Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Colombia coal mining could halt with government decree


24/10/03
24/10/03

Colombia coal mining could halt with government decree

Bogota, 3 October (Argus) — Colombia's coal operations could come to a stop as the government will soon start issuing resolutions that regulate mining areas as temporary environmental reserves, Colombian Mining Association (ACM) director Juan Camilo Narino said. The decree, enacted on 30 January, states the country's environment ministry will identify, delimit and declare through administrative acts reserves of natural resources in areas that require restoration and rehabilitation. Such areas will become environmentally protected zones for five years with the possibility of extending that period for an additional five years. The decree takes away the autonomy and competence of the Regional Autonomous Corporations, which until now grants key licensing to keep coal operations running, but without those licences, coal operations could come to a halt, Narino told Argus on the sidelines of a hydrocarbon summit held in Cartagena. Narino said coal, gold, copper and other types of mining firms are extremely concerned with the potential resolutions due to be issued as they need minor licences granted by the corporations. Such licensing includes environmental licences to pour water into channels, take water from rivers and to pass over rivers. The environment ministry is likely to announce those resolutions at the CBD Cop 16 in Cali, Colombia, on 21 October-2 November. Colombia is set to champion a comprehensive and regionally inclusive approach to biodiversity conservation and climate action at this conference. "The decree clearly states that those corporations could no longer grant permits," Narino said. "As a result, the operating activity of existing licences is unfeasible as you can no longer operate without those minor licences." ACM has filed a lawsuit against the decree, while 11 industry unions, including the regional autonomous corporations, joined in suing the government in a lawsuit submitted on 6 August. They filed the lawsuits with Colombia's state council, the highest administrative court in the country, while requesting precautionary measures including halting the decree. The state council agreed on studying the lawsuit and could annul the ruling, but it could take 6-12 months to examine the case. The state council must listen to the defendants — the environment ministry — lawyer Luis Eduardo Delgado Martinez said. Environmental minister Susana Muhamad was summoned by congress to face a political control debate to explain the scope of the decree, Narino noted. Narino levelled several other criticisms against the decree, including calling the time frame of the temporary environmental reserve designations arbitrary. He also said IT bypasses other legal and constitutional norms. By Diana Delgado 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