NEMA commends FERC on DR ruling

Indonesia Coal Production Cuts reflect weaker China demand, COVID-19 impacts, falling HBA reference prices, and DMO sales to PLN, pressuring thermal coal output, miner budgets, and investment plans under the 2020 RKAB.

Key Points

Planned 2020 coal output reductions from China demand slump, lower HBA prices, and DMO constraints impacting miners.

✅ China demand drop reduces exports and thermal coal shipments.

✅ HBA reference price decline pressures margins and cash flow.

✅ DMO sales to PLN limit revenue; investment plans may slow.

The Energy and Mineral Resources (ESDM) Ministry is considering lowering the coal production target this year as demand from China has shown a significant decline, with China power demand drops reported, since the start of the outbreak of the novel coronavirus in the country late last year, a senior ministry official has said.

The ministry’s coal and mineral director general Bambang Gatot Ariyono said in Jakarta on March 12 that the decline in the demand had also caused a sharp drop in coal prices on the world market, and China's plan to reduce coal power has further weighed on sentiment, which could cause the country’s miners to reduce their production.

The 2020 minerals and coal mining program and budget (RKAB) has set a current production goal of 550 million tons of coal, a 10 percent increase from last year’s target. As of March 6, 94.7 million tons of coal had been mined in the country in the year.

“With the existing demand, revision to this year’s production is almost certain,” he said, adding that the drop in demand had also caused a decline in coal prices.

Indonesia’s thermal coal reference price (HBA) fell by 26 percent year-on-year to US$67.08 per metric ton in March, according to a Standards & Poor press release on March 5.  At home, the coal price is also unattractive for local producers. Under the domestic market obligation (DMO) policy, miners are required to sell a quarter of their production to state-owned electricity company PLN at a government-set price, even as imported coal volumes rise in some markets. This year’s coal reference price is $70 per metric ton, far below the internal prices before the coronavirus outbreak hit China.

The ministry’s expert staff member Irwandy Arif said China had reduced its coal demand by 200,000 tons so far, as six of its coal-fired power plants had suspended operation due to the significant drop in electricity demand. Many factories in the country were closed as the government tried to halt the spread of the new coronavirus, which caused the decline in energy demand and created electric power woes for international supply chains.

“At present, all mines in Indonesia are still operating normally, while India is rationing coal supplies amid surging electricity demand. But we have to see what will happen in June,” he said.

The ministry predicted that the low demand would also result in a decline in coal mining investment, as clean energy investment has slipped across many developing nations.

The ministry set a $7.6 billion investment target for the mining sector this year, up from $6.17 billion last year, even as Israel reduces coal use in its power sector, which may influence regional demand. The year’s total investment realization was $192 million as of March 6, or around 2.5 percent of the annual target. 

Related News

• Electricity Forum News

• Power Generation News

China Power Demand-Emissions Gap highlights surging grid demand outpacing renewables, with coal filling shortages despite record solar, wind, EV charging, and hydrogen growth, threatening decarbonization targets and net-zero pathways through 2030.

Key Points

China's power demand outpaces renewables, keeping coal dominant and raising emissions risk through the 2020s.

✅ Record solar and wind still lag fast grid demand growth

✅ Coal fills gaps as EV charging and hydrogen loads rise

✅ Forecasts diverge: CEC bullish vs IEA, BNEF conservative

Here’s a new obstacle that could prevent the world finally turning the corner on climate change: Imagine that over the coming decade a whole new economy the size of Russia were to pop up out of nowhere. With the world’s fourth-largest electricity sector and largest burden of power plant emissions after China, the U.S. and India, this new economy on its own would be enough to throw out efforts to halt global warming — especially if it keeps on growing through the 2030s.

That’s the risk inherent in China’s seemingly insatiable appetite for grid power, as surging electricity demand is putting systems under strain worldwide.

From the cracking pace of renewable build-out last year, you might think the country had broken the back of its carbon addiction. A record 55 gigawatts of solar power and 48 gigawatts of wind were connected — comparable to installing the generation capacity of Mexico in less than 12 months. This year will see an even faster pace, with 93 GW of solar and 50 GW of wind added, according to a report last week from the China Electricity Council, an industry association.

That progress could in theory see the country’s power sector emissions peak within months, rather than the late-2020s date the government has hinted at. Combined with a smaller quantity of hydro and nuclear, low-emissions sources will probably add about 310 terawatt-hours to zero-carbon generation this year. That 3.8% increase would be sufficient to power the U.K.

Countries that have reached China’s levels of per-capita electricity consumption (already on a par with most of Europe) typically see growth rates at less than half that level, even as global power demand has surged past pre-pandemic levels in recent years. Grid supply could grow at a faster pace than Brazil, Iran, South Korea or Thailand managed over the past decade without adding a ton of additional carbon to the atmosphere.

There’s a problem with that picture, however. If electricity demand grows at an even more headlong pace, there simply won’t be enough renewables to supply the grid. Fossil fuels, overwhelmingly coal, will fill the gap, a reminder of the iron law of climate dynamics in energy transitions.

Such an outcome looks distinctly possible. Electricity consumption in 2021 grew at an extraordinary rate of 10%, and will increase again by between 5% and 6% this year, according to the CEC. That suggests the country is on pace to match the CEC’s forecasts of bullish grid demand over the coming decade, with generation hitting 11,300 terawatt-hours in 2030. External analysts, such as the International Energy Agency and BloombergNEF, envisage a more modest growth to around 10,000 TWh. 

The difference between those two outlooks is vast — equivalent to all the electricity produced by Russia or Japan. If the CEC is right and the IEA and BloombergNEF are wrong, even the furious rate of renewable installations we’re seeing now won’t be enough to rein in China’s power-sector emissions.

Who’s correct? On one hand, it’s fair to say that power planners usually err on the side of overestimation. If your forecast for electricity demand is too high, state-owned generators will be less profitable than they otherwise would have been — but if it’s too low, you’ll see power cuts and shutdowns like China witnessed last autumn, with resulting power woes affecting supply chains beyond its borders.

On the other hand, the decarbonization of China’s economy itself should drive electricity demand well above what we’ve seen in the past, with some projections such as electricity meeting 60% of energy use by 2060 pointing to a profound shift. Some 3.3 million electric vehicles were sold in 2021 and BloombergNEF estimates a further 5.7 million will be bought in 2022. Every million EVs will likely add in the region of 2 TWh of load to the grid. Those sums quickly mounts up in a country where electric drivetrains are taking over a market that shifts more than 25 million new cars a year.

Decarbonizing industry, a key element on China’s road to zero emissions, could also change the picture. The IEA sees the country building 25 GW of electolysers to produce hydrogen by 2030, enough to consume some 200 TWh on their own if run close to full-time.

That’s still not enough to justify the scale of demand being forecast, though. China is already one of the least efficient countries in the world when it comes to translating energy into economic growth, and despite official pressure on the most wasteful, so called “dual-high” industries such as steel, oil refining, glass and cement, its targets for more thrifty energy usage remain pedestrian.

The countries that have decarbonized fastest are those, such as Germany, the U.K and the U.S., where Americans are using less electricity, that have seen power demand plateau or even decline, giving new renewable power a chance to swap out fossil-fired generators without chasing an ever-increasing burden on the grid. China’s inability to do this as its population peaks and energy consumption hits developed-country levels isn’t a sign of strength.

Instead, it’s a sign of a country that’s chronically unable to make the transition away from polluting heavy industry and toward the common prosperity and ecological civilization that its president keeps promising. Until China reins in that credit-fueled development model, the risks to its economy and the global climate will only increase.

Related News

• Electricity Forum News

• Power Generation News

BNEF 2019 New Energy Outlook projects surging renewable energy demand, aggressive decarbonization, wind and solar cost declines, battery storage growth, coal phase-out, and power market reform to meet Paris Agreement targets through 2050.

Key Points

Bloomberg's NEO 2019 forecasts power demand, renewables growth, and decarbonization pathways through 2050.

✅ Predicts wind/solar to ~50% of global electricity by 2050

✅ Foresees coal decline; Asia transitions slower than Europe

✅ Calls for power market reform and battery integration

In a report that examines the ways in which renewable energy demand is expected to increase, Bloomberg New Energy Finance (BNEF) finds that “aggressive decarbonization” will be required beyond 2030 to meet the temperature goals of the Paris Agreement on climate change.

Focusing on electricity, BNEF’s 2019 New Energy Outlook (NEO) predicts a 62% increase in global power demand, leading to global generating capacity tripling between now and 2050, when wind and solar are expected to make up almost 50% of world electricity, as wind and solar gains indicate, due to decreasing costs.

The report concludes that coal will collapse everywhere except Asia, and, by 2032, there will be more wind and solar electricity than coal-fired electricity. It forecasts that coal’s role in the global power mix will decrease from 37% today, as renewables surpass 30% globally, to 12% by 2050 with the virtual elimination of oil as a power-generating source.

Highlighting regional differences, the report finds that:

Western European economies are already on a strong decarbonization path due to carbon pricing and strong policy support, with offshore wind costs dropping bolstering progress;

by 2040, renewables will comprise 90% of the electricity mix in Europe, with wind and solar accounting for 80%;

the US, with low-priced natural gas, and China, with its coal-fired plants, will transition more slowly even as 30% from wind and solar becomes feasible; and

China’s power sector emissions will peak in 2026 and then fall by more than half over the next 20 years, as solar PV growth accelerates, with wind and solar increasing from 8% to 48% of total electricity generation by 2050.

Power markets must be reformed to ensure wind, solar and batteries are properly remunerated for their contributions to the grid.

The 2019 report finds that wind and solar now represent the cheapest option for adding new power-generating capacity in much of the world, amid record-setting momentum, which is expected to attract USD 13.3 trillion in new investment. While solar, wind, batteries and other renewables are expected to attract USD 10 trillion in investment by 2050, the report warns that curbing emissions will require other technologies as well.

Speaking about the report, Matthias Kimmel, NEO 2019 lead analyst, said solar photovoltaic modules, wind turbines and lithium-ion batteries are set to continue on aggressive cost reduction curves of 28%, 14% and 18%, respectively, for every doubling in global installed capacity. He explained that by 2030, energy generated or stored and dispatched by these technologies will undercut electricity generated by existing coal and gas plants.

To achieve this level of transition and decarbonization, the report stresses, power markets must be reformed to ensure wind, solar and batteries are “properly remunerated for their contributions to the grid.”

Additionally, the 2019 NEO includes a number of updates such as:

• new scenarios on global warming of 2°C above preindustrial levels, electrified heat and road transport, and an updated coal phase-out scenario;
• new sections on coal and gas power technology, the future grid, energy access, and costs related to decarbonization technology such as carbon capture and storage (CCS), biogas, hydrogen fuel cells, nuclear and solar thermal;
• sub-national results for China;
• the addition of commercial electric vehicles;
• an expanded air-conditioning analysis; and
• modeling of Brazil, Mexico, Chile, Turkey and Southeast Asia in greater detail.

Every year, the NEO compares the costs of competing energy technologies, informing projections like US renewables at one-fourth in the near term. The 2019 report brought together 65 market and technology experts from 12 countries to provide their views on how the market might evolve.

Related News

• Electricity Forum News

• Renewable Energy News

Rolls-Royce and Exelon UKSMR Partnership accelerates factory-built small modular reactors, nuclear power, clean energy, 440MW units, advanced manufacturing, fleet deployment, net zero goals, and resilient, low-cost baseload generation in the UK and globally.

Key Points

A partnership to deploy factory-built SMR stations, providing 440MW low-carbon baseload for the UK and export markets.

✅ 440MW factory-built SMR units with rapid modular assembly

✅ Exelon to operate and enhance high capacity factors

✅ Supports UK net zero, jobs, and export-led manufacturing

Rolls-Royce and Exelon Generation have signed a Memorandum of Understanding to pursue the potential for Exelon Generation to operate compact nuclear power stations both in the UK and internationally, including markets such as Canada where New Brunswick SMR questions are prompting public debate today.

Exelon Generation will be using their operational experience to assist Rolls Royce in the development and deployment of the UKSMR.

Rolls-Royce is leading a consortium that is designing a low-cost factory built nuclear power station, known as a small modular reactor (SMR), with UK mini-reactor approval anticipated as development progresses. Its standardised, factory-made components and advanced manufacturing processes push costs down, while the rapid assembly of the modules and components inside a weatherproof canopy on the power station site itself avoid costly schedule disruptions.

The consortium is working with its partners and UK Government to secure a commitment for a fleet of factory built nuclear power stations, each providing 440MW of electricity, to be operational within a decade, helping the UK meet its net zero obligations in line with the green industrial revolution policy set out by government. A fleet deployment in the UK will lead to the creation of new factories that will make the components and modules which will help the economy recover from the Covid-19 pandemic and pave the way for significant export opportunities as well.

The consortium members feature the best of nuclear engineering, construction and infrastructure expertise in Assystem, Atkins, BAM Nuttall, Jacobs, Laing O'Rourke, National Nuclear Laboratory, Nuclear Advanced Manufacturing Research Centre, Rolls-Royce and TWI. Exelon will add valuable operational experience to the team.

Tom Samson, interim Chief Executive Officer of the UKSMR consortium, said: 'Nuclear power is central to tackling climate change and economic recovery, but it must be affordable, reliable and investable and the way we manufacture and assemble our power station brings its cost down to be comparable with offshore wind.

'It's a compelling proposition that could draw new players into the UK's power generation landscape, improving choice for consumers and providing uninterrupted low carbon energy to homes and businesses.

'The opportunity to partner with Exelon is a very exciting prospect for our program, complementing our existing Consortium partnerships with one of the world's largest nuclear operator adds an important dimension to our growth ambitions, embodies the strength of the UK and USA alliance on nuclear matters and reflects wider international moves, such as a Canadian premiers' SMR initiative to accelerate technology development, and offers our future customers the ability to achieve the highest performance standards associated with Exelon's outstanding operational track record.'

The power stations will be built by the UKSMR consortium, before being handed over to be operated by power generation companies. Exelon Generation will work closely with the consortium during the pre-operation period. Exelon Nuclear operates 21 nuclear reactors in America, and U.S. regulators recently issued a final safety evaluation for a NuScale SMR that underscores momentum in the sector. The Exelon nuclear fleet is an integral part of the U.S. clean power mix; it produces more than 158 million megawatt-hours of clean electricity every year.

Bryan Hanson, EVP and COO of Exelon Generation said: 'We believe that SMRs are a crucial part of the world's clean energy mix, as projects like Darlington SMRs advance in Ontario. With our experience both in the US and internationally, Exelon is confident that we can help Rolls Royce ensure SMRs play a key role in the UK's energy future. We've had a very strong record of performance for 20 consecutive years, with a 2019 capacity factor of 95.7 percent. We will leverage this experience to achieve sustainably high capacity factors for the UKSMRs.'

Ralph Hunter, Managing Director of Exelon Nuclear Partners, who runs Exelon's international clean energy business, said: 'We have a strong track record of success to be the operator of choice for the UKSMR. We will help develop operational capability, training and human capacity development in the UK, as utilities such as Ontario Power Generation commit to SMRs abroad, ensuring localisation of skills and a strong culture of safety, performance and efficiency.'

By 2050 a full UK programme of a fleet of factory built nuclear power stations in the UK could create:

Up to 40,000 jobs GBP52BN of value to the UK economy GBP250BN of exports

The current phase of the programme has been jointly funded by all consortium members and UK Research and Innovation.

Related News

• Electricity Forum News

• Power Generation News

SaskPower 2019-20 Annual Report highlights $205M net income, grid capacity upgrades, emissions reduction progress, Chinook Power Station natural gas baseload, and wind and solar renewable energy to support Saskatchewan's Growth Plan and Prairie Resilience.

Key Points

SaskPower's 2019-20 results: $205M income, grid upgrades, emissions cuts, and new gas baseload with wind and solar.

✅ $205M net income, up $8M year-over-year

✅ Chinook Power Station adds stable natural gas baseload

✅ Increased grid capacity enables more wind and solar

SaskPower presented its annual report on Monday, with a net income of $205 million in 2019-20, even as Manitoba Hydro's financial pressures highlight regional market dynamics.

This figure shows an increase of $8 million from 2018-19, despite record provincial power demand that tested the grid.

“Reliable, sustainable and cost-effective electricity is crucial to achieving the economic goals laid out in the Government of Saskatchewan’s Growth Plan and the emissions reductions targets outlined in Prairie Resilience, our made-in-Saskatchewan climate change strategy,” Minister Responsible for SaskPower Dustin Duncan said.

In the last year, SaskPower has repaired and upgraded old infrastructure, invested in growth projects and increased grid capacity, including plans to buy more electricity from Manitoba Hydro to support reliability and benefiting from new turbine investments across the region.

The utility is also exploring procurement partnerships, including a plan to purchase power from Flying Dust First Nation to diversify supply.

“During the past year, we continued to move toward our target to reduce carbon dioxide emissions 40 per cent from 2005 levels by 2030, as part of efforts to double renewable electricity by 2030 across Saskatchewan,” SaskPower President and CEO Mike Marsh said. “The newly commissioned natural gas-fired Chinook Power Station will provide a stable source of baseload power while enabling the ongoing addition of intermittent renewable generation capacity, and exploring geothermal power alongside wind and solar generation.”

Related News

• Electricity Forum News

• Power Generation News

Champlain Hudson Power Express connects Hydro-Québec hydropower to the New York grid via a 1.25 GW high voltage transmission line, enabling renewable energy imports, grid decarbonization, storage synergy, and reduced fossil fuel generation.

Key Points

A 1.25 GW cross-border transmission project delivering Hydro-Québec hydropower to New York City to displace fossil power.

✅ 1.25 GW buried HV line from Quebec to Astoria, Queens

✅ Supports renewable imports and grid decarbonization in NYC

✅ Enables two-way trade and reservoir storage synergy

Last week, Quebec Premier François Legault took to Twitter to celebrate after New York State authorities tentatively approved the first new transmission line in three decades, the Champlain Hudson Power Express, that would connect Quebec’s vast hydroelectric network to the northeastern U.S. grid.

“C’est une immense nouvelle pour l’environnement. De l’énergie fossile sera remplacée par de l’énergie renouvelable,” he tweeted, or translated to English: “This is huge news for the environment. Fossil fuels will be replaced by renewable energy.”

The proposed construction of a 1.25 gigawatt transmission line from southern Quebec to Astoria, Queens, known as the Champlain Hudson Power Express, ties into a longer term strategy by Hydro Québec: in the coming decade, as cities such as New York and Boston look to transition away from fossil fuel-generated electricity and decarbonize their grids, Hydro-Québec sees opportunities to supply them with energy from its vast network of 61 hydroelectric generating stations and other renewable power, as Quebec has closed the door on nuclear power in recent years.

Already, the provincial utility is one of North America’s largest energy producers, generating $2.3 billion in net income in 2020, and planning to increase hydropower capacity over the near term. Hydro-Quebec has said it intends to increase exports and had set a goal of reaching $5.2 billion in net income by 2030, though its forecasts are currently under review.

But just as oil and gas companies have encountered opposition to nearly every new pipeline, Hydro-Québec is finding resistance as it seeks to expand its pathways into major export markets, which are all in the U.S. northeast. Indeed, some fossil fuel companies that would be displaced by Hydro-Québec are fighting to block the construction of its new transmission lines.

“Linear projects — be it a transmission line or a pipeline or highway or whatever — there’s always a certain amount of public opposition,” Gary Sutherland, director of strategic affairs and stakeholder relations for Hydro-Québec, told the Financial Post, “which is a good thing because it makes the project developer ask the right questions.”

While Sutherland said he isn’t expecting opposition to the line into New York, he acknowledged Hydro-Québec also didn’t fully anticipate the opposition encountered with the New England Clean Energy Connect, a 1.2 gigawatt transmission line that would cost an estimated US$950 million and run from Quebec through Maine, eventually connecting to Massachusetts’ grid.

In Maine, natural gas and nuclear energy companies, which stand to lose market share, and also environmentalists, who oppose logging through sensitive habitat, both oppose the project.

In August, Maine’s highest court invalidated a lease for the land where the lines were slated to be built, throwing permits into question. Meanwhile, Calpine Corporation and Vistra Energy Corp., both Texas-based companies that operate natural gas plants in Maine, formed a political action committee called Mainers for Local Power. It has raised nearly US$8 million to fight the transmission line, according to filings with the Maine Ethics Commission.

Neither Calpine nor Vistra could be reached for comment by the time of publication.

“It’s been 30 years since we built a transmission line into the U.S. northeast,” said Sutherland. “In that time we have increased our exports significantly … but we haven’t been able to build out the corresponding transmission to get that energy from point A to point B.”

Indeed, since 2003, Hydro-Québec’s exports outside the province have grown from roughly two terrawatts per year to more than 30 terrawatts, including recent deals with NB Power to move more electricity into New Brunswick. The provincial utility produces around 210 terrawatts annually, but uses less than 178 terrawatts in Quebec.

Linear projects — be it a transmission line or a pipeline or highway or whatever — there’s always a certain amount of public opposition

In Massachusetts, it has signed contracts to supply 9.4 terrawatts annually — an amount roughly equivalent to 8 per cent of the New England region’s total consumption. Meanwhile, in New York, Hydro-Québec is in the final stages of negotiating a 25-year contract to sell 10.4 terawatts — about 20 per cent of New York City’s annual consumption.

In his tweets, Legault described the New York contract as being worth more than $20 billion over 25 years, although Hydro Québec declined to comment on the value because the contract is still under negotiation and needs approval by New York’s Public Services Commission — expected by mid-December.

Both regions are planning to build out solar and wind power to meet their growing clean energy needs and reach ambitious 2030 decarbonization targets. New York has legislated a goal of 70 per cent renewable power by that time, while Massachusetts has called for a 50 per cent reduction in emissions in the same period.

Hydro-Quebec signage is displayed on a manhole cover in Montreal. PHOTO BY BRENT LEWIN/BLOOMBERG FILES
According to a 2020 paper titled “Two Way Trade in Green Electrons,” written by three researchers at the Center for Energy and Environmental Policy Research at the Massachusetts’ Institute for Technology, Quebec’s hydropower, which like fossil fuels can be dispatched, will help cheaply and efficiently decarbonize these grids.

“Today transmission capacity is used to deliver energy south, from Quebec to the northeast,” the researchers wrote, adding, “…in a future low-carbon grid, it is economically optimal to use the transmission to send energy in both directions.”

That is, once new transmission lines and wind and solar power are built, New York and Massachusetts could send excess energy into Quebec where it could be stored in hydroelectric reservoirs until needed.

“This is the future of this northeast region, as New York state and New England are decarbonizing,” said Sutherland. “The only renewable energies they can put on the grid are intermittent, so they’re going to need this backup and right to the north of them, they’ve got Hydro-Québec as backup.”

Hydro-Québec already sells roughly 7 terrawatts of electricity per year into New York on the spot market, but Sutherland says it is constrained by transmission constraints that limit additional deliveries.

And because transmission lines can cost billions of dollars to build, he said Hydro-Québec needs the security of long-term contracts that ensure it will be paid back over time, aligning with its broader $185-billion transition strategy to reduce reliance on fossil fuels.

Sutherland expressed confidence that the Champlain Hudson Power Express project would be constructed by 2025. He noted its partners, Blackstone-backed Transmission Developers, have been working on the project for more than a decade, and have already won support from labour unions, some environmental groups and industry.

The project calls for a barge to move through Lake Champlain and the Hudson River, and dig a trench while unspooling and burying two high voltage cables, each about 10-12 centimetres in diameter. In certain sections of the Hudson River, known to have high concentrations of PCP pollutants, the cable would be buried underground alongside the river.

Related News

• Electricity Forum News

• Grid Technologies News