Several snippets of good news arrived as we were wrapping up the final edition of Coal Age for 2019. The International Energy Agency (IEA) released Coal 2019. In it, the agency seemed reluctant to report that a rebound in global coal demand continued through 2018, driven by growth in coal power generation, which reached an all-time high. While we haven’t had a chance to read the entire report, the executive summary said that, while coal power generation was expected to decline in 2019, “this appears to have resulted from particular circumstances in some specific regions and is unlikely to be the start of a lasting trend.” That’s their way of telling the climate change crowd that 2019 was an anomaly.
Speaking of climate change, the 25th Conference of the Parties to the UN Framework Convention on Climate Change (COP-25), which took place recently in Madrid, failed to establish rules for an international greenhouse gas emissions trading market. COP-25 negotiators met for two additional days, but still couldn’t reach an agreement. More importantly the decision regarding who and how much they will pay for reducing greenhouse gas emissions (developed vs. developing nations) remains unanswered.
The US Federal Energy Regulatory Commission (FERC) directed PJM Interconnection, which supplies power to 13 states, to address state-subsidized electric generation resources in its pricing for power (See News, p. 6). FERC had said that subsidies for renewable energy threatened the competitiveness of power markets and that PJM failed to address the price-distorting impact of resources receiving out-of-market support.
As this edition was going to press, a spending package to fund the US federal government through the end of fiscal year 2020 (October 1, 2020) renewed the wind production tax credit for only one year. A long list of other handouts to special interest groups that were included in the draft bill were reportedly removed due to strong opposition from White House negotiators. The credits that were eliminated included an extension of the electric vehicle tax credit, extension of the solar tax credit, and other credits for offshore wind, energy storage, and carbon capture and sequestration.
This year has been a difficult year for coal operators worldwide. Global trade tension reduced the growth rate for China, which impacted coal consumption and cause a dramatic slide in thermal export pricing. It appears at this point that the US and China are working toward a positive outcome. Growing the world’s economic engine substantially would be a great way to start 2020. From all of us to all of you, have a safe and prosperous 2020.