---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
European Nations Must Be Careful on Carbon Goals, Hungary Says
2011-01-06 20:17:29.8 GMT
By Ewa Krukowska
Jan. 6 (Bloomberg) -- European Union member states must be
"very careful" when deciding whether to adopt stricter
emissions-reduction targets, Hungary's National Development
Minister Tamas Fellegi said.
The EU's 27 nations need to "very thoroughly" discuss
whether the bloc's current goal of cutting greenhouse gases by
20 percent by 2020 compared with 1990 levels should be deepened,
Fellegi said. His country holds the EU's rotating presidency for
the first half of this year.
"We have to seriously consider financial and development
conditions and consequences of such decisions," Fellegi told
reporters during a press conference in Budapest. "My policy
would be to make sure that every target that we set can be met
by a country."
The EU, which is on track to meet its internal emissions-
reduction target, has said it's ready to move to a stricter goal
of a 30 percent cut should other nations, including the U.S. and
China, follow suit.
Member states remain at odds on whether the bloc should
increase its ambitions, and they have asked the European
Commission, the EU's regulatory branch, to prepare a detailed
analysis on costs of increasing targets at national levels.
Hungary plans to dedicate an informal meeting of climate
ministers in March to the EU "2050 carbon road map," he added.
The bloc aims to reduce greenhouse gases by 80 percent to 95
percent in 2050.
For Related News and Information:
Emission market news: NI ENVMARKET <GO>
Today's top energy stories: ETOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Kevin Costelloe, Christine Spolar
To contact the reporter on this story:
Ewa Krukowska in Budapest at +32-474-620-243 or
ekrukowska@bloomberg.net;
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
2011/01/06
Fwd: + GOP Bills Would Curb EPA on Global Warming Battle
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
GOP Bills Would Curb EPA on Global Warming Battle
2011-01-07 01:28:22.970 GMT
By DINA CAPPIELLO
Washington (AP) -- House Republicans wasted no time
Thursday in trying to block the Obama administration from
acting to stem global warming. On their second day in power,
GOP lawmakers introduced several bills that would hamstring the
Environmental Protection Agency from moving forward with
regulations to reduce heat-trapping pollution from factories
and other sources that they say contributes to global warming.
The bills are part of an effort by House Republicans to
reverse what they consider job-killing policies of the
administration. The bills introduced by Rep. Ted Poe of Texas,
Rep. Marsha Blackburn of Tennessee and Rep. Shelley Moore
Capito of West Virginia would stymie the EPA in different
ways.
Poe's measure would prohibit the EPA from using any money
to implement or enforce regulations to impose a limit on global
warming gases. Blackburn's bill would change the Clean Air Act
so the EPA could no longer use the law to control greenhouse
gases.
A 2007 Supreme Court decision said the EPA had the
authority to regulate carbon dioxide and other global warming
gases under the statute.
Capito's measure would delay for two years any effort by
the EPA to regulate carbon dioxide under the Clean Air Act.
In a statement, Capito called the EPA's actions a power
grab that would have devastating effects on the economy.
"Without congressional action to say otherwise, the EPA
will continue to dismantle energy and manufacturing industries
through regulation," she said.
Meanwhile, a top Democrat in the Senate on environmental
issues, Sen. Barbara Boxer of California, said Thursday she
would use every tool to block the Republicans efforts and
ensure that the EPA was allowed to follow the law.
-0- Jan/07/2011 01:28 GMT
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
GOP Bills Would Curb EPA on Global Warming Battle
2011-01-07 01:28:22.970 GMT
By DINA CAPPIELLO
Washington (AP) -- House Republicans wasted no time
Thursday in trying to block the Obama administration from
acting to stem global warming. On their second day in power,
GOP lawmakers introduced several bills that would hamstring the
Environmental Protection Agency from moving forward with
regulations to reduce heat-trapping pollution from factories
and other sources that they say contributes to global warming.
The bills are part of an effort by House Republicans to
reverse what they consider job-killing policies of the
administration. The bills introduced by Rep. Ted Poe of Texas,
Rep. Marsha Blackburn of Tennessee and Rep. Shelley Moore
Capito of West Virginia would stymie the EPA in different
ways.
Poe's measure would prohibit the EPA from using any money
to implement or enforce regulations to impose a limit on global
warming gases. Blackburn's bill would change the Clean Air Act
so the EPA could no longer use the law to control greenhouse
gases.
A 2007 Supreme Court decision said the EPA had the
authority to regulate carbon dioxide and other global warming
gases under the statute.
Capito's measure would delay for two years any effort by
the EPA to regulate carbon dioxide under the Clean Air Act.
In a statement, Capito called the EPA's actions a power
grab that would have devastating effects on the economy.
"Without congressional action to say otherwise, the EPA
will continue to dismantle energy and manufacturing industries
through regulation," she said.
Meanwhile, a top Democrat in the Senate on environmental
issues, Sen. Barbara Boxer of California, said Thursday she
would use every tool to block the Republicans efforts and
ensure that the EPA was allowed to follow the law.
-0- Jan/07/2011 01:28 GMT
Fwd: The Texas Tribune: Carbon Dioxide, the Bane of Environmentalists, Is in Demand in the Oil Industry
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
The Texas Tribune: Carbon Dioxide, the Bane of Environmentalists, Is in Demand in the Oil Industry
2011-01-07 04:04:53.44 GMT
The Texas Tribune: Carbon Dioxide, the Bane of Environmentalists,
Is in Demand in the Oil Industry
By KATE GALBRAITH
(New York Times) -- The Obama administration views carbon
dioxide as a pollutant that warms the earth, and it imposed new
regulations at the beginning of the year to begin to control CO2
emissions. But to Texas oilmen, carbon dioxide is a useful — and
scarce — commodity that is vital to extracting hard-to-reach oil
reserves.
In Texas, the nation's largest oil-producing state, the
demand for CO2 is soaring — because carbon dioxide can help
squeeze oil out of formations deep underground — and new carbon
dioxide-producing plants are in the works.
Last month, Texas air-quality regulators approved crucial
permits for two coal-fired power plants that will capture their
carbon dioxide emissions and sell them for use in nearby oil
fields. Also in December, a major new pipeline operated by
Denbury Resources of Plano began ferrying carbon dioxide from
Mississippi to oil fields near Houston.
"The demand for carbon dioxide is very, very large," said
Steve Melzer, president of the Texas Carbon Capture and Storage
Association.
Some oil-extraction projects have been delayed, Mr. Melzer
said, because they cannot buy enough carbon dioxide.
The idea of capturing carbon dioxide and pumping it
underground is gaining traction in the power sector. It sounds
like an exercise in environmental idealism: Take the
heat-trapping gas — belched profusely from coal plants, which
generate 45 percent of the nation's electricity — and bury it,
benefiting the atmosphere and combating global climate change. Of
course, it is something of an environmental paradox that stowing
the greenhouse gas can also help to produce more fossil fuels.
Carbon dioxide is a "fantastic solvent," said Susan Hovorka,
a scientist with the Gulf Coast Carbon Center at the Jackson
School of Geosciences at the University of Texas. In a nearly
liquid form, it can mix with the underground oil, making the oil
more fluid and easier to extract. Water is pumped in before the
carbon dioxide; when carbon dioxide is unavailable, water
suffices, but it is not as effective.
Some of the carbon dioxide comes back out with the oil, but
that gets separated and reused in the wells. When the project has
finished producing oil, the vast majority of the carbon dioxide
stays underground and will not leak out of the tiny pores it is
wedged into, said Ms. Hovorka, whose team has monitored two oil
fields in the state and verified that the gas did not escape.
Capturing carbon dioxide can increase a coal plant's capital
cost by about 30 percent — a key reason no major power plant with
that capability has been built in the United States. One pilot
project, slated to expand, has been operating in West Virginia
since 2009, and another plant that may capture and store carbon
dioxide is under construction in Indiana. In addition to the two
proposed Texas plants, projects are in the planning phases in
California, Illinois, Kentucky and Mississippi, said Julio
Friedmann, director of the carbon management program at Lawrence
Livermore National Laboratory.
Texas, however, has a major advantage over most other
states: it can put the carbon dioxide to use. The West Virginia
plant pumps carbon dioxide underground just to keep it out of the
air, but Texas plants can sell it to oil companies.
Texas has been using carbon dioxide to help extract oil
since the early 1970s. Much of the state's supply is piped in
from New Mexico and Colorado, where dome formations yield
abundant CO2. In recent years — due to high, though fluctuating,
oil prices that motivate oil producers to expand operations —
demand for carbon dioxide has far outstripped supply in the
Permian Basin. Prices there for carbon dioxide for new projects
have more than doubled in the past five years and are now close
to half the wellhead price of natural gas, measured by volume,
Mr. Melzer said.
It seems odd that Texas, which because of its heavy industry
discharges more carbon dioxide into the air than any other state,
would need to import it. But this could begin to change, in a
modest way, with the construction of the two coal plants that
received air permits last month. One is a $3.5 billion to $4
billion plant called the Tenaska Trailblazer Energy Center near
Sweetwater; the other is a $2.2 billion plant near Odessa built
by Summit Power.
Neither power plant is being built yet, but they plan to
capture 85 percent or more of their carbon dioxide emissions and
sell them to oil companies. Laura Miller, Summit Power's director
of projects in Texas, said the Odessa plant would get one-third
of its revenue from selling power, one-third from selling
fertilizer — a byproduct of a coal-gasification process to be
used by the plant — and one-third from selling carbon dioxide.
Some environmentalists — in effect acknowledging that the
country cannot quickly wean itself off coal, the dirtiest fossil
fuel — have tepidly endorsed the concept of capturing carbon
dioxide from coal plants and storing it underground. James D.
Marston, the Texas head of the Environmental Defense Fund, which
received a written commitment from Tenaska to using
carbon-capture technologies, noted that the state's planned
plants would help show that the technology works..
Whether Texas' plants actually get built remains to be seen.
Around the country, some similar projects have folded or stalled
due to cost. The failure last year of federal legislation that
would have in effect put a price on emissions of heat-trapping
gases hurt the economics of the plants, which will sell power at
market prices in Texas.
But federal and state help have pushed the Texas projects
along. Both Texas and the federal Environmental Protection Agency
have recently issued new rules governing carbon-capture projects
designed to provide clarity for the industry — and have also
provided financial help.
The Summit Power plant received $450 million in federal
incentives, and is eligible for state incentives, including a tax
credit, approved in the last legislative session, worth up to
$100 million.
Some Texans are already looking far ahead, to when carbon
dioxide, because of its heat-trapping properties, gets buried for
its own sake — not just in oil fields.
The Gulf Coast Carbon Center recently received $10 million
from the federal stimulus package and Texas' General Land Office
to study the possibility of storing carbon dioxide emissions
below the Gulf of Mexico — "not that anyone is going to want to
do it tomorrow," Ms. Hovorka said.
kgalbraith@texastribune.org
Copyright 2011 The New York Times Company
-0- Jan/07/2011 04:04 GMT
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
The Texas Tribune: Carbon Dioxide, the Bane of Environmentalists, Is in Demand in the Oil Industry
2011-01-07 04:04:53.44 GMT
The Texas Tribune: Carbon Dioxide, the Bane of Environmentalists,
Is in Demand in the Oil Industry
By KATE GALBRAITH
(New York Times) -- The Obama administration views carbon
dioxide as a pollutant that warms the earth, and it imposed new
regulations at the beginning of the year to begin to control CO2
emissions. But to Texas oilmen, carbon dioxide is a useful — and
scarce — commodity that is vital to extracting hard-to-reach oil
reserves.
In Texas, the nation's largest oil-producing state, the
demand for CO2 is soaring — because carbon dioxide can help
squeeze oil out of formations deep underground — and new carbon
dioxide-producing plants are in the works.
Last month, Texas air-quality regulators approved crucial
permits for two coal-fired power plants that will capture their
carbon dioxide emissions and sell them for use in nearby oil
fields. Also in December, a major new pipeline operated by
Denbury Resources of Plano began ferrying carbon dioxide from
Mississippi to oil fields near Houston.
"The demand for carbon dioxide is very, very large," said
Steve Melzer, president of the Texas Carbon Capture and Storage
Association.
Some oil-extraction projects have been delayed, Mr. Melzer
said, because they cannot buy enough carbon dioxide.
The idea of capturing carbon dioxide and pumping it
underground is gaining traction in the power sector. It sounds
like an exercise in environmental idealism: Take the
heat-trapping gas — belched profusely from coal plants, which
generate 45 percent of the nation's electricity — and bury it,
benefiting the atmosphere and combating global climate change. Of
course, it is something of an environmental paradox that stowing
the greenhouse gas can also help to produce more fossil fuels.
Carbon dioxide is a "fantastic solvent," said Susan Hovorka,
a scientist with the Gulf Coast Carbon Center at the Jackson
School of Geosciences at the University of Texas. In a nearly
liquid form, it can mix with the underground oil, making the oil
more fluid and easier to extract. Water is pumped in before the
carbon dioxide; when carbon dioxide is unavailable, water
suffices, but it is not as effective.
Some of the carbon dioxide comes back out with the oil, but
that gets separated and reused in the wells. When the project has
finished producing oil, the vast majority of the carbon dioxide
stays underground and will not leak out of the tiny pores it is
wedged into, said Ms. Hovorka, whose team has monitored two oil
fields in the state and verified that the gas did not escape.
Capturing carbon dioxide can increase a coal plant's capital
cost by about 30 percent — a key reason no major power plant with
that capability has been built in the United States. One pilot
project, slated to expand, has been operating in West Virginia
since 2009, and another plant that may capture and store carbon
dioxide is under construction in Indiana. In addition to the two
proposed Texas plants, projects are in the planning phases in
California, Illinois, Kentucky and Mississippi, said Julio
Friedmann, director of the carbon management program at Lawrence
Livermore National Laboratory.
Texas, however, has a major advantage over most other
states: it can put the carbon dioxide to use. The West Virginia
plant pumps carbon dioxide underground just to keep it out of the
air, but Texas plants can sell it to oil companies.
Texas has been using carbon dioxide to help extract oil
since the early 1970s. Much of the state's supply is piped in
from New Mexico and Colorado, where dome formations yield
abundant CO2. In recent years — due to high, though fluctuating,
oil prices that motivate oil producers to expand operations —
demand for carbon dioxide has far outstripped supply in the
Permian Basin. Prices there for carbon dioxide for new projects
have more than doubled in the past five years and are now close
to half the wellhead price of natural gas, measured by volume,
Mr. Melzer said.
It seems odd that Texas, which because of its heavy industry
discharges more carbon dioxide into the air than any other state,
would need to import it. But this could begin to change, in a
modest way, with the construction of the two coal plants that
received air permits last month. One is a $3.5 billion to $4
billion plant called the Tenaska Trailblazer Energy Center near
Sweetwater; the other is a $2.2 billion plant near Odessa built
by Summit Power.
Neither power plant is being built yet, but they plan to
capture 85 percent or more of their carbon dioxide emissions and
sell them to oil companies. Laura Miller, Summit Power's director
of projects in Texas, said the Odessa plant would get one-third
of its revenue from selling power, one-third from selling
fertilizer — a byproduct of a coal-gasification process to be
used by the plant — and one-third from selling carbon dioxide.
Some environmentalists — in effect acknowledging that the
country cannot quickly wean itself off coal, the dirtiest fossil
fuel — have tepidly endorsed the concept of capturing carbon
dioxide from coal plants and storing it underground. James D.
Marston, the Texas head of the Environmental Defense Fund, which
received a written commitment from Tenaska to using
carbon-capture technologies, noted that the state's planned
plants would help show that the technology works..
Whether Texas' plants actually get built remains to be seen.
Around the country, some similar projects have folded or stalled
due to cost. The failure last year of federal legislation that
would have in effect put a price on emissions of heat-trapping
gases hurt the economics of the plants, which will sell power at
market prices in Texas.
But federal and state help have pushed the Texas projects
along. Both Texas and the federal Environmental Protection Agency
have recently issued new rules governing carbon-capture projects
designed to provide clarity for the industry — and have also
provided financial help.
The Summit Power plant received $450 million in federal
incentives, and is eligible for state incentives, including a tax
credit, approved in the last legislative session, worth up to
$100 million.
Some Texans are already looking far ahead, to when carbon
dioxide, because of its heat-trapping properties, gets buried for
its own sake — not just in oil fields.
The Gulf Coast Carbon Center recently received $10 million
from the federal stimulus package and Texas' General Land Office
to study the possibility of storing carbon dioxide emissions
below the Gulf of Mexico — "not that anyone is going to want to
do it tomorrow," Ms. Hovorka said.
kgalbraith@texastribune.org
Copyright 2011 The New York Times Company
-0- Jan/07/2011 04:04 GMT
Fwd: Entergy, Xcel Defy U.S. Nuclear Slump by Upgrading Their Plants
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Entergy, Xcel Defy U.S. Nuclear Slump by Upgrading Their Plants
2011-01-07 05:00:02.0 GMT
By Simon Lomax
Jan. 7 (Bloomberg) -- The U.S. hasn't approved a new
nuclear plant for more than 30 years. Yet it may add the
capacity of three reactors that would cost $18 billion in the
next five years.
The reason: Reactor owners such as Xcel Energy Inc. and
Entergy Corp. plan to tune up their existing nuclear plants.
The industry's hopes for a renaissance in construction have
given way to a "wait-and-see mode," which favors ramping up
production as much as possible at existing plants, James
Joosten, a senior analyst at the U.S. Energy Information
Administration, said in a telephone interview.
"The near-term renaissance will probably take the form of
uprates," as the upgrades are known, Joosten said.
The 3,422 megawatts in proposed uprates through 2015
approach the 3,600 megawatts approved by the Nuclear Regulatory
Commission from 2001 to 2010, according to the agency.
Regulators started approving small capacity increases at
existing plants in the late 1970s. There is an "accelerating
trend" because utility companies are "moving on to the larger,
more complex uprates," Scott Burnell, an NRC spokesman, said in
a telephone interview.
Existing plants are being revamped as some power companies
struggle to build reactors profitably, even with aid from the
Obama administration. While Southern Co. and Scana Corp. are
moving ahead with proposed facilities in Georgia and South
Carolina, Entergy, Constellation Energy Group Inc. and Exelon
Corp. have put their plans for new reactors on hold.
The NRC hasn't issued a construction permit for a nuclear
reactor since 1978, according to the agency's annual information
digest.
Transformers, Rotors
New transformers, bigger turbine rotors and higher-capacity
water pumps are among the changes being proposed at existing
nuclear plants to get more electricity from the same reactors.
The biggest upgrades add as much as 20 percent to a nuclear
reactor's generation capacity and "involve loading the core
with more fresh fuel than had been the case in the past,"
Burnell said.
Usually, the changes yield no more than 200 megawatts per
plant, compared with the 1,000 megawatts or more that can be
added by a single new reactor, said Matt Bennett, a vice
president at Third Way, a Washington-based research and advocacy
organization that supports nuclear power. One megawatt can power
about 800 average U.S. homes.
"Squeezing more megawatts" out of an existing nuclear
plant is an attractive option because it costs "several hundred
million dollars" compared with about $8 billion to build a
reactor, Bennett, who was a deputy assistant to former President
Bill Clinton, said in a telephone interview.
"It's a cheap way of the utilities being more efficient
with the power they're producing," he said.
Operating Safely
To boost the capacity of an existing nuclear plant, a
company must prove to the NRC "they can continue to operate
safely while generating more power," Burnell said.
Some of the reactors being upgraded were built in the 1960s
and 1970s with 40-year operating licenses. Since 2000, 60
reactors have won permission to operate for an additional 20
years, Burnell said. NRC officials are taking more time to
review certain uprate applications to be sure the higher output
doesn't harm reactor components such as relief valves and
emergency core-cooling systems, the agency said in a report last
year.
"Our basic and unchanging requirement is that the plants
have to operate safely," Burnell said.
Risks are nonetheless increased, according to the Union of
Concerned Scientists, an advocacy group based in Cambridge,
Massachusetts.
Safety Margins
The NRC is "allowing owners to increase the power levels
of their reactors knowing that safety margins are being reduced,
if not eliminated," David Lochbaum, nuclear safety director of
the group, said in an e-mail.
The regulatory agency is reviewing uprate applications for
13 nuclear reactors which, if approved, would boost their
combined capacity by 1,461 megawatts. Applications for an
additional 1,961 megawatts of capacity may be submitted by 2015,
according to the NRC.
To add that much nuclear capacity by building plants would
cost $18.3 billion, based on the Energy Information
Administration's estimate of $5.3 million per megawatt for
reactor construction.
Uprates can boost the capacity of an existing nuclear plant
for about $1.2 million to $1.5 million per megawatt, according
to the the information agency's review of nuclear regulatory
filings and reports to the shareholders of companies that own
nuclear plants, Joosten said.
A power plant fueled by natural gas can be built for about
$1 million a megawatt, and new coal generation costs more than
$2.8 million a megawatt, according to the information agency.
Entergy's Plant
A "laundry list" of planned improvements, including new
transformers, should increase capacity at Entergy's Grand Gulf
nuclear plant in Port Gibson, Mississippi, by about 11 percent,
Suzanne Anderson, a spokeswoman for the New Orleans-based
company, said in a telephone interview.
Proposed changes at Constellation's Nine Mile Point nuclear
plant in Scriba, New York, north of Syracuse, include installing
a high-pressure turbine rotor that can handle more steam "and
thus generate more electricity," Jill Lyon, a company
spokeswoman, said in an e-mail. The upgrade should boost the
capacity of the plant's second nuclear reactor by 15 percent,
according to NRC data.
Xcel Pipes, Pumps
Plans at Xcel Energy's plant near Monticello, Minnesota,
include expanding the capacity of pipes and pumps that move
water and steam between the reactor and the turbine, Charles
Bomberger, the Minneapolis-based company's vice president for
nuclear projects, said in a telephone interview. The change
should increase the plant's capacity by almost 13 percent,
according to NRC data.
"Getting more steam through that system is really where
you're going to get more power," Bomberger said in a telephone
interview.
Nuclear power has won backing from the Obama administration
and some lawmakers as a clean-energy source. That hasn't stopped
some power companies from being cautious about the financial
risks of new reactors.
U.S. companies sent 17 applications to the NRC seeking
permission to build reactors from 2007 to 2009, according to the
agency's website. Of those, only Southern, Scana and NRG Energy
Inc. are likely to start construction immediately if they are
awarded a license, NRC Chairman Gregory Jaczko said in a Dec. 3
interview at Bloomberg headquarters in New York.
Natural Gas
The reluctance to build reactors may stem from the decline
in energy demand amid the recession and falling prices for
natural gas, a power-plant fuel that competes with nuclear,
Jaczko said. Since July 2008, natural-gas futures have tumbled
from $13 per million British thermal units to about $4.50 per
million Btu.
"We're not planning on building new nuclear with $4 gas,"
John Herron, president and chief executive officer of Entergy's
nuclear operations, said at a Dec. 7 forum hosted by Third Way.
The case for building nuclear reactors also was set back
when cap-and-trade legislation, in which power-plant operators
pay for the right to emit carbon dioxide, died in Congress last
year, Energy Secretary Steven Chu said at the same forum. Unlike
power plants that run on fossil fuels such as coal and natural
gas, nuclear plants don't release carbon dioxide when generating
electricity and would have benefited from the cap-and-trade law.
President Barack Obama also wanted to encourage reactor
construction by expanding a U.S. program that guarantees loans
for new plants against default. The existing program can
guarantee as much as $18.5 billion in loans, and Obama called
for an expansion to $54.5 billion.
Stop-gap legislation funding the federal government into
March omitted Obama's request.
Two New Reactors
A group led by Atlanta-based Southern Co. has won the only
nuclear-loan guarantee awarded by the Energy Department so far.
It will cover about $8.3 billion of the estimated $14 billion
needed to build two reactors at the existing Vogtle nuclear
plant near Waynesboro, Georgia.
While the industry has succeeded in boosting the output of
existing plants, new reactors are needed to keep pace with the
30 percent growth in U.S. electricity demand that the Energy
Information Administration projects by 2035, Mitchell Singer, a
spokesman for the Nuclear Energy Institute, a Washington-based
trade group, said in a telephone interview.
"Uprates alone are not going to handle it," Singer said.
For Related News and Information:
U.S. reactor status: NRCR <GO>
Top power news: PTOP <GO>
Environmental stories: GREEN <GO>
--With assistance from Tina Davis in New York. Editors:
Larry Liebert, Steve Geimann
To contact the reporter on this story:
Simon Lomax in Washington at +1-202-654-4305 or
slomax@bloomberg.net
To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or LLiebert@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Entergy, Xcel Defy U.S. Nuclear Slump by Upgrading Their Plants
2011-01-07 05:00:02.0 GMT
By Simon Lomax
Jan. 7 (Bloomberg) -- The U.S. hasn't approved a new
nuclear plant for more than 30 years. Yet it may add the
capacity of three reactors that would cost $18 billion in the
next five years.
The reason: Reactor owners such as Xcel Energy Inc. and
Entergy Corp. plan to tune up their existing nuclear plants.
The industry's hopes for a renaissance in construction have
given way to a "wait-and-see mode," which favors ramping up
production as much as possible at existing plants, James
Joosten, a senior analyst at the U.S. Energy Information
Administration, said in a telephone interview.
"The near-term renaissance will probably take the form of
uprates," as the upgrades are known, Joosten said.
The 3,422 megawatts in proposed uprates through 2015
approach the 3,600 megawatts approved by the Nuclear Regulatory
Commission from 2001 to 2010, according to the agency.
Regulators started approving small capacity increases at
existing plants in the late 1970s. There is an "accelerating
trend" because utility companies are "moving on to the larger,
more complex uprates," Scott Burnell, an NRC spokesman, said in
a telephone interview.
Existing plants are being revamped as some power companies
struggle to build reactors profitably, even with aid from the
Obama administration. While Southern Co. and Scana Corp. are
moving ahead with proposed facilities in Georgia and South
Carolina, Entergy, Constellation Energy Group Inc. and Exelon
Corp. have put their plans for new reactors on hold.
The NRC hasn't issued a construction permit for a nuclear
reactor since 1978, according to the agency's annual information
digest.
Transformers, Rotors
New transformers, bigger turbine rotors and higher-capacity
water pumps are among the changes being proposed at existing
nuclear plants to get more electricity from the same reactors.
The biggest upgrades add as much as 20 percent to a nuclear
reactor's generation capacity and "involve loading the core
with more fresh fuel than had been the case in the past,"
Burnell said.
Usually, the changes yield no more than 200 megawatts per
plant, compared with the 1,000 megawatts or more that can be
added by a single new reactor, said Matt Bennett, a vice
president at Third Way, a Washington-based research and advocacy
organization that supports nuclear power. One megawatt can power
about 800 average U.S. homes.
"Squeezing more megawatts" out of an existing nuclear
plant is an attractive option because it costs "several hundred
million dollars" compared with about $8 billion to build a
reactor, Bennett, who was a deputy assistant to former President
Bill Clinton, said in a telephone interview.
"It's a cheap way of the utilities being more efficient
with the power they're producing," he said.
Operating Safely
To boost the capacity of an existing nuclear plant, a
company must prove to the NRC "they can continue to operate
safely while generating more power," Burnell said.
Some of the reactors being upgraded were built in the 1960s
and 1970s with 40-year operating licenses. Since 2000, 60
reactors have won permission to operate for an additional 20
years, Burnell said. NRC officials are taking more time to
review certain uprate applications to be sure the higher output
doesn't harm reactor components such as relief valves and
emergency core-cooling systems, the agency said in a report last
year.
"Our basic and unchanging requirement is that the plants
have to operate safely," Burnell said.
Risks are nonetheless increased, according to the Union of
Concerned Scientists, an advocacy group based in Cambridge,
Massachusetts.
Safety Margins
The NRC is "allowing owners to increase the power levels
of their reactors knowing that safety margins are being reduced,
if not eliminated," David Lochbaum, nuclear safety director of
the group, said in an e-mail.
The regulatory agency is reviewing uprate applications for
13 nuclear reactors which, if approved, would boost their
combined capacity by 1,461 megawatts. Applications for an
additional 1,961 megawatts of capacity may be submitted by 2015,
according to the NRC.
To add that much nuclear capacity by building plants would
cost $18.3 billion, based on the Energy Information
Administration's estimate of $5.3 million per megawatt for
reactor construction.
Uprates can boost the capacity of an existing nuclear plant
for about $1.2 million to $1.5 million per megawatt, according
to the the information agency's review of nuclear regulatory
filings and reports to the shareholders of companies that own
nuclear plants, Joosten said.
A power plant fueled by natural gas can be built for about
$1 million a megawatt, and new coal generation costs more than
$2.8 million a megawatt, according to the information agency.
Entergy's Plant
A "laundry list" of planned improvements, including new
transformers, should increase capacity at Entergy's Grand Gulf
nuclear plant in Port Gibson, Mississippi, by about 11 percent,
Suzanne Anderson, a spokeswoman for the New Orleans-based
company, said in a telephone interview.
Proposed changes at Constellation's Nine Mile Point nuclear
plant in Scriba, New York, north of Syracuse, include installing
a high-pressure turbine rotor that can handle more steam "and
thus generate more electricity," Jill Lyon, a company
spokeswoman, said in an e-mail. The upgrade should boost the
capacity of the plant's second nuclear reactor by 15 percent,
according to NRC data.
Xcel Pipes, Pumps
Plans at Xcel Energy's plant near Monticello, Minnesota,
include expanding the capacity of pipes and pumps that move
water and steam between the reactor and the turbine, Charles
Bomberger, the Minneapolis-based company's vice president for
nuclear projects, said in a telephone interview. The change
should increase the plant's capacity by almost 13 percent,
according to NRC data.
"Getting more steam through that system is really where
you're going to get more power," Bomberger said in a telephone
interview.
Nuclear power has won backing from the Obama administration
and some lawmakers as a clean-energy source. That hasn't stopped
some power companies from being cautious about the financial
risks of new reactors.
U.S. companies sent 17 applications to the NRC seeking
permission to build reactors from 2007 to 2009, according to the
agency's website. Of those, only Southern, Scana and NRG Energy
Inc. are likely to start construction immediately if they are
awarded a license, NRC Chairman Gregory Jaczko said in a Dec. 3
interview at Bloomberg headquarters in New York.
Natural Gas
The reluctance to build reactors may stem from the decline
in energy demand amid the recession and falling prices for
natural gas, a power-plant fuel that competes with nuclear,
Jaczko said. Since July 2008, natural-gas futures have tumbled
from $13 per million British thermal units to about $4.50 per
million Btu.
"We're not planning on building new nuclear with $4 gas,"
John Herron, president and chief executive officer of Entergy's
nuclear operations, said at a Dec. 7 forum hosted by Third Way.
The case for building nuclear reactors also was set back
when cap-and-trade legislation, in which power-plant operators
pay for the right to emit carbon dioxide, died in Congress last
year, Energy Secretary Steven Chu said at the same forum. Unlike
power plants that run on fossil fuels such as coal and natural
gas, nuclear plants don't release carbon dioxide when generating
electricity and would have benefited from the cap-and-trade law.
President Barack Obama also wanted to encourage reactor
construction by expanding a U.S. program that guarantees loans
for new plants against default. The existing program can
guarantee as much as $18.5 billion in loans, and Obama called
for an expansion to $54.5 billion.
Stop-gap legislation funding the federal government into
March omitted Obama's request.
Two New Reactors
A group led by Atlanta-based Southern Co. has won the only
nuclear-loan guarantee awarded by the Energy Department so far.
It will cover about $8.3 billion of the estimated $14 billion
needed to build two reactors at the existing Vogtle nuclear
plant near Waynesboro, Georgia.
While the industry has succeeded in boosting the output of
existing plants, new reactors are needed to keep pace with the
30 percent growth in U.S. electricity demand that the Energy
Information Administration projects by 2035, Mitchell Singer, a
spokesman for the Nuclear Energy Institute, a Washington-based
trade group, said in a telephone interview.
"Uprates alone are not going to handle it," Singer said.
For Related News and Information:
U.S. reactor status: NRCR <GO>
Top power news: PTOP <GO>
Environmental stories: GREEN <GO>
--With assistance from Tina Davis in New York. Editors:
Larry Liebert, Steve Geimann
To contact the reporter on this story:
Simon Lomax in Washington at +1-202-654-4305 or
slomax@bloomberg.net
To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or LLiebert@bloomberg.net.
Fwd: U.K. Solar Installations Hit Record in 2010 on Higher Incentives
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
U.K. Solar Installations Hit Record in 2010 on Higher Incentives
2011-01-07 00:00:00.0 GMT
By Alex Morales
Jan. 7 (Bloomberg) -- The U.K., which had its 12th coldest
year on record in 2010, installed more solar power than in any
other year, data from the energy regulator Ofgem show.
Solar panels with the capacity to generate more than 42
megawatts of electricity were registered to receive above-market
power prices last year, according to data e-mailed from the
regulator Ofgem. The facilities were spurred starting in April
by a government program offering as much as 12 times the market
rate for power from renewable sources.
The installations covered more than 16,000 homes and
commercial properties. The new rules included in a "feed-in
tariff" are aimed at expanding the clean energy industry and
led to a 10-fold expansion in solar power in the U.K.
"The feed-in tariffs sparked investment in an economic
downturn," Andrew Lee, head of Sharp Corp., an Osaka-based
electronics maker's U.K. solar unit, said in a telephone
interview. "They've been a birth for the solar industry and
we've responded by creating jobs."
A total of 4 megawatts of solar power facilities were
installed in the U.K. in 2009 and 4.4 megawatts in 2008,
according to Bloomberg New Energy Finance. Sharp says it's
working to double production at its solar cell factory in Wales,
the biggest in Britain, and Lee said the company has added about
300 new jobs at its expanded plant.
The impact on small-scale renewables has been
"tremendous," Dave Sowden, Chief Executive of the Micropower
Council, an industry group, said in a telephone interview.
'Game-Changer'
"They've been a complete game-changer in the market,"
Sowden said. "We've seen more than a threefold increase in the
number of companies registered as installers. It started 2010 at
about 600, and ended at over 2000."
Larger companies from the German utility E.ON AG to Tesco
Plc, the biggest U.K. supermarket are tapping the market,
offering homeowners help to buy and install panels, and tap the
tariffs, which apply only to small-scale installations of
renewable energy.
The Ofgem figures, which are dated Jan. 5, also showed 10.8
megawatts of wind power and 4.3 megawatts of hydro-power were
registered to benefit from the tariffs from their introduction
in April through December.
The guaranteed prices were introduced by the Labour
government, which in May lost a general election, ceding power
to a coalition of Conservatives and Liberal Democrats. The new
government, in an October review of spending across all
departments, said it would maintain the tariffs for now.
The tariffs are guaranteed for 25 years and vary according
to capacity and whether panels are fitted to old buildings or
new ones. They're as high as 41.3 pence per kilowatt-hour, about
eight times the current day-ahead U.K. power price and 12 times
the power price on April 1 when the system began.
Investor Certainty
The tariffs are "positive for investors in renewable
technologies because it gives much more certainty on the price
they can achieve," Steve Jennings, who leads the utilities
consulting practice at PricewaterhouseCoopers in London said in
a telephone interview. "Investment decisions need certainty in
order for developers to invest in these installations."
The U.K. Met Office said yesterday that U.K. temperatures
averaged 8 degrees Celsius (46 degrees Fahrenheit) in 2010,
making it the 12th-coldest year in a series dating back a
century. Solar panels can still generate power in cold
temperatures and overcast conditions.
While last year's 42.5 megawatts of installations mark a
record for the U.K., more than doubling the total installed
solar power base from 32 megawatts at the end of 2009, it's
still a fraction of activity in world leader Germany, where BSW
Solar, the German Solar Industry Association, estimates 2010
installations will range from 7 gigawatts to 8 gigawatts. A
gigawatt is a thousand megawatts.
In the spending review, the government said changes to the
tariffs will be made "at the next formal review." When the
previous government introduced the subsidy in April, it said any
changes to the system would come in April 2013. The energy
department says it may review the tariffs earlier if
installations exceed forecasts.
"We're concerned the government might curtail growth by
putting a cap on installations next year," Sharp's Lee said.
"We hope to work with them to maximize the job and industry
growth potential for UK Plc."
For Related News and Information:
Climate-change news: NI CLIMATE <GO>
Top environment stories: GREEN <GO>
Most-read environmental news: MNI ENV <GO>
Renewable Energy Stories: NI ALTNRG <GO>
--With assistance from Marc Roca in London. Editors: Reed
Landberg, Mike Anderson
To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
U.K. Solar Installations Hit Record in 2010 on Higher Incentives
2011-01-07 00:00:00.0 GMT
By Alex Morales
Jan. 7 (Bloomberg) -- The U.K., which had its 12th coldest
year on record in 2010, installed more solar power than in any
other year, data from the energy regulator Ofgem show.
Solar panels with the capacity to generate more than 42
megawatts of electricity were registered to receive above-market
power prices last year, according to data e-mailed from the
regulator Ofgem. The facilities were spurred starting in April
by a government program offering as much as 12 times the market
rate for power from renewable sources.
The installations covered more than 16,000 homes and
commercial properties. The new rules included in a "feed-in
tariff" are aimed at expanding the clean energy industry and
led to a 10-fold expansion in solar power in the U.K.
"The feed-in tariffs sparked investment in an economic
downturn," Andrew Lee, head of Sharp Corp., an Osaka-based
electronics maker's U.K. solar unit, said in a telephone
interview. "They've been a birth for the solar industry and
we've responded by creating jobs."
A total of 4 megawatts of solar power facilities were
installed in the U.K. in 2009 and 4.4 megawatts in 2008,
according to Bloomberg New Energy Finance. Sharp says it's
working to double production at its solar cell factory in Wales,
the biggest in Britain, and Lee said the company has added about
300 new jobs at its expanded plant.
The impact on small-scale renewables has been
"tremendous," Dave Sowden, Chief Executive of the Micropower
Council, an industry group, said in a telephone interview.
'Game-Changer'
"They've been a complete game-changer in the market,"
Sowden said. "We've seen more than a threefold increase in the
number of companies registered as installers. It started 2010 at
about 600, and ended at over 2000."
Larger companies from the German utility E.ON AG to Tesco
Plc, the biggest U.K. supermarket are tapping the market,
offering homeowners help to buy and install panels, and tap the
tariffs, which apply only to small-scale installations of
renewable energy.
The Ofgem figures, which are dated Jan. 5, also showed 10.8
megawatts of wind power and 4.3 megawatts of hydro-power were
registered to benefit from the tariffs from their introduction
in April through December.
The guaranteed prices were introduced by the Labour
government, which in May lost a general election, ceding power
to a coalition of Conservatives and Liberal Democrats. The new
government, in an October review of spending across all
departments, said it would maintain the tariffs for now.
The tariffs are guaranteed for 25 years and vary according
to capacity and whether panels are fitted to old buildings or
new ones. They're as high as 41.3 pence per kilowatt-hour, about
eight times the current day-ahead U.K. power price and 12 times
the power price on April 1 when the system began.
Investor Certainty
The tariffs are "positive for investors in renewable
technologies because it gives much more certainty on the price
they can achieve," Steve Jennings, who leads the utilities
consulting practice at PricewaterhouseCoopers in London said in
a telephone interview. "Investment decisions need certainty in
order for developers to invest in these installations."
The U.K. Met Office said yesterday that U.K. temperatures
averaged 8 degrees Celsius (46 degrees Fahrenheit) in 2010,
making it the 12th-coldest year in a series dating back a
century. Solar panels can still generate power in cold
temperatures and overcast conditions.
While last year's 42.5 megawatts of installations mark a
record for the U.K., more than doubling the total installed
solar power base from 32 megawatts at the end of 2009, it's
still a fraction of activity in world leader Germany, where BSW
Solar, the German Solar Industry Association, estimates 2010
installations will range from 7 gigawatts to 8 gigawatts. A
gigawatt is a thousand megawatts.
In the spending review, the government said changes to the
tariffs will be made "at the next formal review." When the
previous government introduced the subsidy in April, it said any
changes to the system would come in April 2013. The energy
department says it may review the tariffs earlier if
installations exceed forecasts.
"We're concerned the government might curtail growth by
putting a cap on installations next year," Sharp's Lee said.
"We hope to work with them to maximize the job and industry
growth potential for UK Plc."
For Related News and Information:
Climate-change news: NI CLIMATE <GO>
Top environment stories: GREEN <GO>
Most-read environmental news: MNI ENV <GO>
Renewable Energy Stories: NI ALTNRG <GO>
--With assistance from Marc Roca in London. Editors: Reed
Landberg, Mike Anderson
To contact the reporter on this story:
Alex Morales in London at +44-20-7330-7718 or
amorales2@bloomberg.net.
To contact the editor responsible for this story:
Reed Landberg at +44-20-7330-7862 or
landberg@bloomberg.net.
Fwd: + UN Cuts Emissions Request Backlog to 30 Days From 90 (Update1)
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
UN Cuts Emissions Request Backlog to 30 Days From 90 (Update1)
2011-01-05 17:56:39.476 GMT
(Updates with UN comment on targets in sixth paragraph.)
By Mathew Carr
Jan. 5 (Bloomberg) -- The regulator of the United Nations
emissions market said it reduced a backlog of pending requests
for project registration and new credits to 30 days from a
"stubborn high of about 90 days."
The work included shifting about 27 officials into the unit
that handles the requests, the Bonn-based UN Framework
Convention on Climate Change said today in an e-mailed note.
"The backlog was a burden and a great source of
frustration for everyone," said Clifford Mahlung, chairman of
the Clean Development Mechanism executive board. "It's very
satisfying that it has now been tamed."
The UN market forecast Nov. 25 it could achieve an 80
percent decline by Jan. 1 in the backlog of pending submissions
from projects seeking tradable credits and said it may allow
developers to bundle requests. Credits from the market can be
used for compliance by companies in the European Union carbon
market, the world's largest.
Pending applications for issuance would drop to 62 at the
beginning of this month from 312 as of Oct. 22, according to the
November figures published on a UN website.
David Abbass, a CDM spokesman based in Bonn, said today
that pending cases numbered 91 on Jan. 1. The regulator missed
its target because there were higher-than-expected requests in
the final two months of the year, including a record 164 in
December alone, Abbass said by e-mail.
UN credits for December fell 0.7 percent today to 11.23
euros ($14.81) a metric ton today on the ICE Futures Europe
exchange in London, their lowest close in a week.
Backlog History
The backlog of pending requests to issue emission credits
in the UN greenhouse gas market worsened in the five months
through November, while pending project registrations improved.
The bottleneck for issuance of emission credits rose 17
percent to 239 submissions as of mid-November from 204 in mid-
June, according to the data. The backlog for registration fell
70 percent to 94 submissions from 315 in the same period.
The UN has said an expected surge in issuance may test
project managers' "faith" in the market, according to the
website. "The current system of assessments is not designed to
facilitate the processing of the expected volume of
submissions," it said. The UN said it may consider allowing
similar project activities to be "bundled into one issuance
request."
More work would be required, Mahlung said today. "We've
managed to move a mountain that many considered immovable, but
we'll have to stay vigilant throughout the year."
For Related News and Information:
Top renewable energy, power stories: GREEN<GO>, PTOP<GO>
Bloomberg glossary of emissions terminology: IDOC 2059757 <GO>
Emissions menu, prices: EMIS<GO>, EMIT<GO>
--Editors: Rob Verdonck, Alex Devine
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
UN Cuts Emissions Request Backlog to 30 Days From 90 (Update1)
2011-01-05 17:56:39.476 GMT
(Updates with UN comment on targets in sixth paragraph.)
By Mathew Carr
Jan. 5 (Bloomberg) -- The regulator of the United Nations
emissions market said it reduced a backlog of pending requests
for project registration and new credits to 30 days from a
"stubborn high of about 90 days."
The work included shifting about 27 officials into the unit
that handles the requests, the Bonn-based UN Framework
Convention on Climate Change said today in an e-mailed note.
"The backlog was a burden and a great source of
frustration for everyone," said Clifford Mahlung, chairman of
the Clean Development Mechanism executive board. "It's very
satisfying that it has now been tamed."
The UN market forecast Nov. 25 it could achieve an 80
percent decline by Jan. 1 in the backlog of pending submissions
from projects seeking tradable credits and said it may allow
developers to bundle requests. Credits from the market can be
used for compliance by companies in the European Union carbon
market, the world's largest.
Pending applications for issuance would drop to 62 at the
beginning of this month from 312 as of Oct. 22, according to the
November figures published on a UN website.
David Abbass, a CDM spokesman based in Bonn, said today
that pending cases numbered 91 on Jan. 1. The regulator missed
its target because there were higher-than-expected requests in
the final two months of the year, including a record 164 in
December alone, Abbass said by e-mail.
UN credits for December fell 0.7 percent today to 11.23
euros ($14.81) a metric ton today on the ICE Futures Europe
exchange in London, their lowest close in a week.
Backlog History
The backlog of pending requests to issue emission credits
in the UN greenhouse gas market worsened in the five months
through November, while pending project registrations improved.
The bottleneck for issuance of emission credits rose 17
percent to 239 submissions as of mid-November from 204 in mid-
June, according to the data. The backlog for registration fell
70 percent to 94 submissions from 315 in the same period.
The UN has said an expected surge in issuance may test
project managers' "faith" in the market, according to the
website. "The current system of assessments is not designed to
facilitate the processing of the expected volume of
submissions," it said. The UN said it may consider allowing
similar project activities to be "bundled into one issuance
request."
More work would be required, Mahlung said today. "We've
managed to move a mountain that many considered immovable, but
we'll have to stay vigilant throughout the year."
For Related News and Information:
Top renewable energy, power stories: GREEN<GO>, PTOP<GO>
Bloomberg glossary of emissions terminology: IDOC 2059757 <GO>
Emissions menu, prices: EMIS<GO>, EMIT<GO>
--Editors: Rob Verdonck, Alex Devine
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
2011/01/05
(BN) German Next-year Power Falls to Two-Week Low as Coal Slides
+------------------------------------------------------------------------------+
German Next-year Power Falls to Two-Week Low as Coal Slides
2011-01-05 11:31:26.320 GMT
By Lars Paulsson
Jan. 5 (Bloomberg) -- German electricity for delivery next
year fell as coal prices slid from near their highest level in
two years, potentially making electricity generation cheaper.
Baseload power for 2011 dropped as much as 55 cents, or 1.1
percent, to 51.90 euros ($68.58) a megawatt-hour, its lowest
price since Dec. 21, according to broker data compiled by
Bloomberg. It was at 52.05 euros at 11:45 a.m. Berlin time.
Baseload is delivered around the clock.
Hard coal for next-year delivery to Amsterdam, Rotterdam or
Antwerp rose last week to a two-year high after flooding in
Queensland, Australia, cut supplies of the world's most commonly
used fuel for power stations.
Hard coal dropped 2.1 percent to $117.50 a metric ton
today. The fuel accounted for 18 percent of Germany's power
generation in 2009 and traded as high as $123 on Dec. 30. The
country also gets electricity from lignite, or brown coal, as
well as from nuclear plants and wind and solar power.
Bloomberg tracks power prices from brokers including GFI
Group Inc., ICAP Plc, Spectron Group Ltd. and Tradition.
For Related News and Information:
European power-market stories TNI EUROPE PWRMARKET <GO>
Today's top power news PTOP <GO> and energy news ETOP <GO>
European electricity-markets home page EPWR <GO>
German power-plant shutdown news TNI GER VOLTOUT <GO>
--Editors: Bruce Stanley, Stephen Cunningham
To contact the reporter on this story:
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
German Next-year Power Falls to Two-Week Low as Coal Slides
2011-01-05 11:31:26.320 GMT
By Lars Paulsson
Jan. 5 (Bloomberg) -- German electricity for delivery next
year fell as coal prices slid from near their highest level in
two years, potentially making electricity generation cheaper.
Baseload power for 2011 dropped as much as 55 cents, or 1.1
percent, to 51.90 euros ($68.58) a megawatt-hour, its lowest
price since Dec. 21, according to broker data compiled by
Bloomberg. It was at 52.05 euros at 11:45 a.m. Berlin time.
Baseload is delivered around the clock.
Hard coal for next-year delivery to Amsterdam, Rotterdam or
Antwerp rose last week to a two-year high after flooding in
Queensland, Australia, cut supplies of the world's most commonly
used fuel for power stations.
Hard coal dropped 2.1 percent to $117.50 a metric ton
today. The fuel accounted for 18 percent of Germany's power
generation in 2009 and traded as high as $123 on Dec. 30. The
country also gets electricity from lignite, or brown coal, as
well as from nuclear plants and wind and solar power.
Bloomberg tracks power prices from brokers including GFI
Group Inc., ICAP Plc, Spectron Group Ltd. and Tradition.
For Related News and Information:
European power-market stories TNI EUROPE PWRMARKET <GO>
Today's top power news PTOP <GO> and energy news ETOP <GO>
European electricity-markets home page EPWR <GO>
German power-plant shutdown news TNI GER VOLTOUT <GO>
--Editors: Bruce Stanley, Stephen Cunningham
To contact the reporter on this story:
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
UN Emission Offsets Fall; January Supply May Double Record
By Mathew Carr
Jan. 5 (Bloomberg) -- United Nations carbon credits dropped
as a London-based analyst said this month's supply of new
offsets may double the previous record.
UN Certified Emission Reductions for prompt delivery
decreased 1.6 percent to 11.62 euros ($15.37) a metric ton on
ICE Futures Europe in London at 11:12 a.m. European Union
allowances for December, the carbon-market benchmark, were
little changed at 14.42 euros.
Issuances of new CERs will reach about 48.9 million metric
tons this month, Alessandro Vitelli, a London-based analyst at
IDEAcarbon, said today by e-mail. That compares with the record
24.8 million tons in November and 21.6 million last month,
according to UN data compiled by Bloomberg.
For Related News and Information:
U.K. power-market stories TNI UK PWRMARKET <GO>
Today's top energy news ETOP <GO>
Carbon Stories NI ENVMARKET <GO>
Natural-gas markets menu NATG <GO>
(BN) Bears Resist European Carbon MACD Buy Signal: Technical Analysis
+------------------------------------------------------------------------------+
Bears Resist European Carbon MACD Buy Signal: Technical Analysis
2011-01-05 11:29:56.274 GMT
By Catherine Airlie
Jan. 5 (Bloomberg) -- Gains in European Union carbon
emission allowances may be capped after testing a strong
resistance level yesterday even as moving average charts send a
buying signal to the market.
The moving average convergence divergence line crossed
above the so-called signal line this week, according to an e-
mailed note from Orbeo. "It's a buying signal," Carine Hemery,
a Paris-based analyst at the Societe Generale SA and Rhodia SA
carbon venture, wrote in the report today.
Instances when the so-called MACD rises above the signal
line, a calculation of the nine-day moving average, are often
viewed by technical traders as a sign prices may rally further.
The last time there was an upward crossover was on Nov. 11,
which was followed by three days of gains.
EU allowances for December were unchanged at 14.43 euros
($19.15) a metric ton at 10:50 a.m. on London's ICE Futures
Europe exchange. The contract rose to as much as 14.45 euros a
ton today, matching yesterday's highest price, which came after
the biggest gain since Nov. 17. A failure to rise above this
level may indicate a fall in buying interest.
The market tested a strong resistance level yesterday and
the contract didn't break the bullish trend, Hemery said by
telephone. "Technically, prices could move sideways until there
is a fundamental change in the market," she said. Permits may
trade at about 14.45 euros today, according to the report.
That price "is a big level and we failed here yesterday,
so the bears did what was asked of them," Clive Lambert, a
technical analyst based near London at FuturesTechs said by
telephone. "We'd back them on this basis, classing this as a
selling opportunity for now."
Technical traders watch for patterns on daily charts, such
as moving averages and resistance levels, for clues to price
direction.
For Related News and Information:
December emissions price chart: MOZ0 <Index> GPO <GO>
Emission market news: NI ECREDITS <GO>
Top energy news, power news: ETOP <GO>, PTOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Raj Rajendran, Rob Verdonck
To contact the reporter on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
Bears Resist European Carbon MACD Buy Signal: Technical Analysis
2011-01-05 11:29:56.274 GMT
By Catherine Airlie
Jan. 5 (Bloomberg) -- Gains in European Union carbon
emission allowances may be capped after testing a strong
resistance level yesterday even as moving average charts send a
buying signal to the market.
The moving average convergence divergence line crossed
above the so-called signal line this week, according to an e-
mailed note from Orbeo. "It's a buying signal," Carine Hemery,
a Paris-based analyst at the Societe Generale SA and Rhodia SA
carbon venture, wrote in the report today.
Instances when the so-called MACD rises above the signal
line, a calculation of the nine-day moving average, are often
viewed by technical traders as a sign prices may rally further.
The last time there was an upward crossover was on Nov. 11,
which was followed by three days of gains.
EU allowances for December were unchanged at 14.43 euros
($19.15) a metric ton at 10:50 a.m. on London's ICE Futures
Europe exchange. The contract rose to as much as 14.45 euros a
ton today, matching yesterday's highest price, which came after
the biggest gain since Nov. 17. A failure to rise above this
level may indicate a fall in buying interest.
The market tested a strong resistance level yesterday and
the contract didn't break the bullish trend, Hemery said by
telephone. "Technically, prices could move sideways until there
is a fundamental change in the market," she said. Permits may
trade at about 14.45 euros today, according to the report.
That price "is a big level and we failed here yesterday,
so the bears did what was asked of them," Clive Lambert, a
technical analyst based near London at FuturesTechs said by
telephone. "We'd back them on this basis, classing this as a
selling opportunity for now."
Technical traders watch for patterns on daily charts, such
as moving averages and resistance levels, for clues to price
direction.
For Related News and Information:
December emissions price chart: MOZ0 <Index> GPO <GO>
Emission market news: NI ECREDITS <GO>
Top energy news, power news: ETOP <GO>, PTOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Raj Rajendran, Rob Verdonck
To contact the reporter on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
(BN) EDF-Credit Agricole Hires Olafsson as Trading Head
+------------------------------------------------------------------------------+
EDF-Credit Agricole Hires Olafsson as Trading Head (Update1)
2011-01-05 10:37:48.283 GMT
(Updates with company confirmation in second paragraph.)
By Lars Paulsson
Jan. 5 (Bloomberg) -- Haakon Olafsson, the former head of
trading for European power and natural gas at Credit Suisse
Group AG, joined a venture run by EDF Trading Ltd. and Credit
Agricole SA to take up a similar role in London.
He started work yesterday, according to a person with
knowledge of the appointment who declined to be named because
the information isn't public. Marie Leonard, a London-based
Credit Agricole spokeswoman, confirmed the appointment in an e-
mailed statement today.
Olafsson left Credit Suisse in October after joining its
London office about a year earlier from Rampart Capital LLP, an
energy hedge fund based in the U.K. capital that closed in May
2010. Credit Suisse registered him as an employee as of Dec. 1,
2009, according to the U.K.'s Financial Services Authority.
A graduate of the London Business School, Olafsson also
worked as head of European energy trading at Lehman Brothers
Inc. and was recruited by Goldman Sachs Group Inc. to help it
enter the European gas markets in 2001. He started his career in
1992 at Cargill Inc., where he traded agricultural commodities.
EDF Trading, a unit of Electricite de France SA, and Credit
Agricole's CIB unit set up a partnership in May 2009 to offer
the French bank's customers hedging products for European power,
natural gas and coal.
For Related News and Information:
People in Commodities Market TNI WNEWS CMDMARKET <GO>
Today's top power news PTOP <GO> and energy news ETOP <GO>
Energy markets home page NRG <GO>
--Editors: Rob Verdonck, Raj Rajendran
To contact the reporters on this story:
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net;
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
EDF-Credit Agricole Hires Olafsson as Trading Head (Update1)
2011-01-05 10:37:48.283 GMT
(Updates with company confirmation in second paragraph.)
By Lars Paulsson
Jan. 5 (Bloomberg) -- Haakon Olafsson, the former head of
trading for European power and natural gas at Credit Suisse
Group AG, joined a venture run by EDF Trading Ltd. and Credit
Agricole SA to take up a similar role in London.
He started work yesterday, according to a person with
knowledge of the appointment who declined to be named because
the information isn't public. Marie Leonard, a London-based
Credit Agricole spokeswoman, confirmed the appointment in an e-
mailed statement today.
Olafsson left Credit Suisse in October after joining its
London office about a year earlier from Rampart Capital LLP, an
energy hedge fund based in the U.K. capital that closed in May
2010. Credit Suisse registered him as an employee as of Dec. 1,
2009, according to the U.K.'s Financial Services Authority.
A graduate of the London Business School, Olafsson also
worked as head of European energy trading at Lehman Brothers
Inc. and was recruited by Goldman Sachs Group Inc. to help it
enter the European gas markets in 2001. He started his career in
1992 at Cargill Inc., where he traded agricultural commodities.
EDF Trading, a unit of Electricite de France SA, and Credit
Agricole's CIB unit set up a partnership in May 2009 to offer
the French bank's customers hedging products for European power,
natural gas and coal.
For Related News and Information:
People in Commodities Market TNI WNEWS CMDMARKET <GO>
Today's top power news PTOP <GO> and energy news ETOP <GO>
Energy markets home page NRG <GO>
--Editors: Rob Verdonck, Raj Rajendran
To contact the reporters on this story:
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net;
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
(BN) World Food Prices Rise to Record on Sugar, Meat Costs (Update1)
+------------------------------------------------------------------------------+
World Food Prices Rise to Record on Sugar, Meat Costs (Update1)
2011-01-05 09:57:50.319 GMT
(Adds economist's comment in fourth paragraph, sugar and
cereal indexes starting in fifth.)
By Rudy Ruitenberg
Jan. 5 (Bloomberg) -- World food prices rose to a record in
December on higher sugar and meat costs, the United Nations
said, exceeding levels reached in 2008 that sparked deadly riots
from Haiti to Egypt.
An index of 55 food commodities maintained by the Food and
Agriculture Organization climbed for a sixth month to 214.7
points, above the previous all-time high of 213.5 set in June
2008, according to a monthly report posted on the Rome-based UN
agency's website today. The gauges for sugar and meat prices
advanced to records.
Sugar climbed for a third year in a row in 2010, and corn
jumped the most in four years in Chicago. Food prices may gain
further unless global grain production rises "significantly"
in 2011, the FAO said Nov. 17. At least 13 people died last year
in Mozambique in protests against planned increases in bread and
water prices.
"There is still, unfortunately, the potential for grain
prices to strengthen on the back of a lot of uncertainty,"
Abdolreza Abbassian, senior economist at the FAO, said by phone
today. "If anything goes wrong with the South American crop,
there is plenty of room for them to increase further."
Cereals, Cooking Oils
The FAO's food-price indicator climbed from 206 points in
November. Its gauge for sugar prices reached 398.4 points last
month, increasing from 373.4 in November. The meat-price index
rose to 142.2 points from 141.5.
The agency's cereal-price index jumped to 237.6 points in
December, the highest level since August 2008, from 223.3 the
previous month. The indicator for cooking oils advanced to 263
points, the highest since July 2008, from 243.3. The index for
dairy prices rose to 208.4 points from 207.8.
Global grain output will have to rise at least 2 percent
this year to meet demand in 2011-2012 and avoid further
depletion of stocks, the UN agency has said. Concern about dry
weather in Argentina helped corn prices to jump 52 percent in
Chicago last year.
The basis for the FAO index is 2002-04. The gauge includes
commodity quotations that the agency considers representative
for international food prices.
For Related News and Information:
Top worldwide stories: TOP <GO>
Top agriculture stories: YTOP <GO>
Global agriculture statistics: GCSD <GO>
Agricultural commodity futures: CRPM <GO>
--Editors: Dan Weeks, Nicholas Larkin.
To contact the reporter on this story:
Rudy Ruitenberg in Paris at +33-1-5365-5039 or
rruitenberg@bloomberg.net.
To contact the editor responsible for this story:
Claudia Carpenter at +44-20-7330-7304 or
ccarpenter2@bloomberg.net.
World Food Prices Rise to Record on Sugar, Meat Costs (Update1)
2011-01-05 09:57:50.319 GMT
(Adds economist's comment in fourth paragraph, sugar and
cereal indexes starting in fifth.)
By Rudy Ruitenberg
Jan. 5 (Bloomberg) -- World food prices rose to a record in
December on higher sugar and meat costs, the United Nations
said, exceeding levels reached in 2008 that sparked deadly riots
from Haiti to Egypt.
An index of 55 food commodities maintained by the Food and
Agriculture Organization climbed for a sixth month to 214.7
points, above the previous all-time high of 213.5 set in June
2008, according to a monthly report posted on the Rome-based UN
agency's website today. The gauges for sugar and meat prices
advanced to records.
Sugar climbed for a third year in a row in 2010, and corn
jumped the most in four years in Chicago. Food prices may gain
further unless global grain production rises "significantly"
in 2011, the FAO said Nov. 17. At least 13 people died last year
in Mozambique in protests against planned increases in bread and
water prices.
"There is still, unfortunately, the potential for grain
prices to strengthen on the back of a lot of uncertainty,"
Abdolreza Abbassian, senior economist at the FAO, said by phone
today. "If anything goes wrong with the South American crop,
there is plenty of room for them to increase further."
Cereals, Cooking Oils
The FAO's food-price indicator climbed from 206 points in
November. Its gauge for sugar prices reached 398.4 points last
month, increasing from 373.4 in November. The meat-price index
rose to 142.2 points from 141.5.
The agency's cereal-price index jumped to 237.6 points in
December, the highest level since August 2008, from 223.3 the
previous month. The indicator for cooking oils advanced to 263
points, the highest since July 2008, from 243.3. The index for
dairy prices rose to 208.4 points from 207.8.
Global grain output will have to rise at least 2 percent
this year to meet demand in 2011-2012 and avoid further
depletion of stocks, the UN agency has said. Concern about dry
weather in Argentina helped corn prices to jump 52 percent in
Chicago last year.
The basis for the FAO index is 2002-04. The gauge includes
commodity quotations that the agency considers representative
for international food prices.
For Related News and Information:
Top worldwide stories: TOP <GO>
Top agriculture stories: YTOP <GO>
Global agriculture statistics: GCSD <GO>
Agricultural commodity futures: CRPM <GO>
--Editors: Dan Weeks, Nicholas Larkin.
To contact the reporter on this story:
Rudy Ruitenberg in Paris at +33-1-5365-5039 or
rruitenberg@bloomberg.net.
To contact the editor responsible for this story:
Claudia Carpenter at +44-20-7330-7304 or
ccarpenter2@bloomberg.net.
`clever'Merkel’s Nuclear Plan Earns Derision as Clean Power
+------------------------------------------------------------------------------+
Merkel's Nuclear Plan Earns Derision as Clean Power Costs Climb
2011-01-04 23:32:50.510 GMT
By Jeremy van Loon
Jan. 5 (Bloomberg) -- The solar panels on Tommy Clever's
house in Berlin generate enough electricity on sunny days to run
his washing machine, vacuum cleaner and other appliances, with a
bit left over to help power the region's factories and offices.
Clever likes the arrangement. He gets 51 euro cents ($0.68)
per kilowatt-hour for any electricity his solar rooftop feeds
back into the grid, which is about 10 times the wholesale price
paid to coal or nuclear plant owners. The payment rate, mandated
by the government, stays in effect for 20 years and gives him an
annual return of about 9 percent on his investment in the
photovoltaic setup, Bloomberg Markets magazine reports in its
February issue.
"It's been better than putting money in the bank," the
39-year-old environmental consultant says.
Such subsidies have made Germany a green-power success
story. It gets more than 17 percent of its electricity from wind
turbines, solar arrays and other renewable resources, up from
about 6 percent a decade ago, according to the German Renewable
Energy Federation. The country has adopted new clean
technologies more quickly than any nation except Denmark, its
smaller neighbor to the north; it has more wind turbines
installed than any country other than the U.S. and China and the
most solar power generation in the world.
What's more, the renewable-energy industry has been one of
the biggest sources of new jobs in Germany in the past decade
and has been boosting exports.
Nuclear Extension
Now, Chancellor Angela Merkel is expressing concern that
the cost might hurt the competitiveness of German industry. To
hold power prices in check, she plans to keep existing nuclear
plants in the mix for longer, abandoning a deadline set by the
previous government to retire all of the country's reactors by
2022. Environmentalists, political opponents and even some
people within her own party say Merkel is backpedaling from
Germany's green-power goals.
"Her policy is all about delaying an important transition
to renewable energy that Germany's future prosperity will depend
on," says Matthias Adolf, a lecturer on international relations
and energy at Berlin's Free University.
The government enacted the new program for the electricity
industry in September. It was the first major energy initiative
Merkel had put forward since taking power in 2005 and the first
change of course since renewable-power legislation was passed in
2000.
Price Supports
While Merkel preserved the preferential pricing, known as a
feed-in tariff, that has encouraged the installation of solar
panels such as Clever's and the construction of wind farms, her
critics say she's setting the incentives too low. Tariffs for
new projects can be adjusted by the government as a way of
controlling the pace of new facility construction and reacting
to changes in the relative costs of renewable energy versus
fossil fuels.
The price supports for solar power were cut three times in
2010. The above-market payments to wind and solar generators are
passed through to consumers in their electricity bills.
Merkel says her plan strikes a balance, protecting German
manufacturers such as Siemens AG and Volkswagen AG from rising
electricity costs that might make their exports noncompetitive,
while also continuing to add green power.
"I think we can say our energy system will be the most
efficient and environmentally friendly in the world," Merkel
said on Sept. 6.
Juergen Trittin, a leader of the Green Party, which was a
partner in the government when the push for renewables began in
earnest a decade ago, says German job growth depends on the
continued expansion of wind and solar.
Green Power Jobs
"We should be getting out of nuclear power faster and
relying more on renewable energy, which has led us to an export
surplus," he said in a speech to the country's parliament in
October.
About 340,000 workers in Germany are employed in the making
and installation of wind turbines, solar panels and other clean-
energy equipment. That workforce has doubled since 2004,
according to the environment ministry. The robust domestic
market for wind and solar has helped German companies such as
Siemens develop clean technologies that sell around the world.
Still, despite the growth in exports, employment in
Germany's clean-energy businesses remains sensitive to changes
in government policy, says Claudia Kemfert, head of the energy
and environment department at DIW Berlin, an economic research
institute.
'Right Policy'
"Supporting renewables is the right policy from an
economic perspective, despite the high initial costs," Kemfert
says. "The renewable industry is the only industry in Germany
that reported an increase in revenue over the past three
years."
In addition to the jobs argument, Kemfert and others say
Germany will benefit as renewables replace coal, gas and oil
that are mostly imported and subject to price swings.
Environment Minister Norbert Roettgen says expansion of
wind and solar will provide Germany with cheap power by mid-
century, when fossil fuels become scarce and expensive.
Roettgen, from Merkel's Christian Democratic Union, wanted the
energy plan to tilt more in favor of renewables. Economy
Minister Rainer Bruederle and members of his Free Democratic
Party lobbied for a longer life span for the country's nuclear
plants and more-aggressive cuts in the preferential pricing for
clean-energy installations.
Merkel's plan includes a goal of adding as much as 25,000
megawatts of wind turbines in the North Sea and the Baltic. That
would be a lot of generation: The 17 nuclear plants in operation
in Germany today have a total capacity of about 21,500 megawatts
and produce almost a quarter of the country's power.
Offshore Wind
Adding offshore wind facilities would represent a next step
for Germany, which lags behind Denmark and the U.K. in this
category. The giant turbines anchored to the seabed require a
bigger upfront investment -- and the likely involvement of large
power producers such as RWE AG. Critics of Merkel's plan
question whether it provides sufficient support to get these
facilities built.
Nuclear power is unpopular in Germany, even as neighboring
France relies on reactors for three-quarters of its electricity
and is building more. The 1986 explosion and fire at the
Chernobyl plant in Ukraine, which sent up a plume of radiation
that rmeached much of Europe, turned public opinion against the
technology.
Only about a third of Germans believe that delaying the
retirement of nuclear units is necessary to help with the
transition to renewables, according to a survey commissioned by
environmental group Greenpeace and conducted by TNS Emnid.
Nuclear, No Thanks
"We don't need a nuclear extension," says Olaf Hohmeyer,
a professor of energy economics at the University of Flensburg.
"It's merely a license to print money."
Hohmeyer says Germany could generate all of its power using
renewables by 2050. As long as nuclear plants are providing
cheaper power to the grid, the incentive to build the offshore
wind-power projects, in particular, will be inadequate, he says.
The country's largest utilities, E.ON AG and RWE, along
with Karlsruhe-based Energie Baden-Wuerttemberg AG and a unit of
Sweden's Vattenfall AB, operate the country's nuclear plants.
They will earn about 6 billion euros ($8 billion) in extra
profit for every year's delay in the retirement of their
reactors, according to estimates from the environment and
resources department of the RWI economic institute in Essen.
About half of that money will go to the government to support
new power generation.
"Chancellor Merkel's energy policy is being written by
Juergen Grossmann, not by the cabinet," the Green Party's
Trittin told the Parliament, referring to the chief executive
officer of RWE.
Special Tariffs
The Greens and the Social Democratic Party created the
system of special tariffs to support wind and solar a decade
ago, when they were together in a coalition government. They
also enacted the deadline to phase out nuclear power and plan to
sue to keep Merkel from delaying the plant retirements.
Most reactor waste is still stored in temporary casks near
each nuclear plant, which adds to the concerns that Germans have
about the technology. Any permanent disposal for highly
radioactive waste is at least two decades away, as the country
struggles to choose and prepare an appropriate site, says
Wolfram Koenig, president of the German nuclear safety
regulator.
One advantage of nuclear power is that it emits almost no
greenhouse gases. Germany is subject to the carbon dioxide
emission reductions that the European Union promised under the
Kyoto Protocol climate treaty. Keeping the country's reactors
online longer means that growth in renewable generation can be
used to retire coal plants. Power demand grows by almost 1
percent each year, even though the German population is
shrinking.
'Shape the Transition'
"Continued use of nuclear energy will help us to shape the
transition to the renewable age in an ecologically and
economically sensible fashion," Economy Minister Bruederle
says.
Electricity costs are already steep in Germany. Residential
consumers in 2009 paid the second-highest average rate among the
27 members of the EU: 22.9 euro cents per kilowatt-hour, less
than the 25.5 cents paid in Denmark but 39 percent more than the
EU average of 16.5 cents.
While the tab for subsidizing renewable power is still a
small part of a typical monthly electric bill -- less than the
price of a Starbucks cappuccino -- that slice is growing. A
surge in solar-cell installations in 2010 means that the total
cost of the feed-in tariffs will jump 72 percent in 2011,
according to calculations by the owners of Germany's high-
voltage transmission system.
46 Billion Euros
Support for solar power alone may cost 46 billion euros
from 2000 to 2030, according to a study by the Wuppertal
Institute for Climate, Environment and Energy.
While these costs are high, they aren't yet crippling, and
Merkel aims to keep it that way. Spain's support for solar
power, by contrast, has become a nightmare for the government.
Spain, which was trying to mimic Germany's approach, set
the tariffs too high, and too much new generation got built. The
country is now reneging, cutting feed-in tariffs that investors
were promised.
In addition to the concern that the price supports won't be
set high enough to get new clean-power facilities built, some
energy experts and environmentalists complain that Merkel is
doing little to integrate renewable-energy facilities into the
electricity grid.
'Huge Transition'
"There is no plan for this huge transition," says Sven
Teske, a Greenpeace researcher.
While Clever benefits from the ability to sell excess power
to electricity distributors, Germany's promotion of renewable
energy may erode profits at E.ON, RWE and other large power
producers. Their nuclear units, designed to operate at full
output around the clock, are a poor complement to wind and
solar, which are intermittent and depend on daylight and
favorable weather.
Sometimes when breezes blow strongly and wind turbines
generate ample power, reactor owners have to pay distributors to
take their electricity, University of Flensburg's Hohmeyer says.
With permission to keep reactors online for longer, big
electricity producers have every incentive to slow the
investment in renewables such as offshore wind, he says.
Germany's chances of continuing to lead the world in
renewable energy may depend on whether Merkel really has struck
the proper balance.
For Related News and Information:
Most-read environment stories: MNI ENV <GO>
Climate-change news: NI CLIMATE <GO>
Top environment, renewable energy page: GREEN <GO>
Stories on energy from agriculture: TNI AGR ALTNRG BN <GO>
Today's main power stories: PTOP <GO>
--Editors: Rob Dieterich, Vince Bielski
To contact the reporter responsible for this story:
Jeremy van Loon in Berlin at +49-30-70010-6231 or
jvanloon@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg in London at +44-20-7330-7862 or
landberg@bloomberg.net
To write a letter to the editor, send an e-mail to
bloombergmag@bloomberg.net or type MAG <GO>
Merkel's Nuclear Plan Earns Derision as Clean Power Costs Climb
2011-01-04 23:32:50.510 GMT
By Jeremy van Loon
Jan. 5 (Bloomberg) -- The solar panels on Tommy Clever's
house in Berlin generate enough electricity on sunny days to run
his washing machine, vacuum cleaner and other appliances, with a
bit left over to help power the region's factories and offices.
Clever likes the arrangement. He gets 51 euro cents ($0.68)
per kilowatt-hour for any electricity his solar rooftop feeds
back into the grid, which is about 10 times the wholesale price
paid to coal or nuclear plant owners. The payment rate, mandated
by the government, stays in effect for 20 years and gives him an
annual return of about 9 percent on his investment in the
photovoltaic setup, Bloomberg Markets magazine reports in its
February issue.
"It's been better than putting money in the bank," the
39-year-old environmental consultant says.
Such subsidies have made Germany a green-power success
story. It gets more than 17 percent of its electricity from wind
turbines, solar arrays and other renewable resources, up from
about 6 percent a decade ago, according to the German Renewable
Energy Federation. The country has adopted new clean
technologies more quickly than any nation except Denmark, its
smaller neighbor to the north; it has more wind turbines
installed than any country other than the U.S. and China and the
most solar power generation in the world.
What's more, the renewable-energy industry has been one of
the biggest sources of new jobs in Germany in the past decade
and has been boosting exports.
Nuclear Extension
Now, Chancellor Angela Merkel is expressing concern that
the cost might hurt the competitiveness of German industry. To
hold power prices in check, she plans to keep existing nuclear
plants in the mix for longer, abandoning a deadline set by the
previous government to retire all of the country's reactors by
2022. Environmentalists, political opponents and even some
people within her own party say Merkel is backpedaling from
Germany's green-power goals.
"Her policy is all about delaying an important transition
to renewable energy that Germany's future prosperity will depend
on," says Matthias Adolf, a lecturer on international relations
and energy at Berlin's Free University.
The government enacted the new program for the electricity
industry in September. It was the first major energy initiative
Merkel had put forward since taking power in 2005 and the first
change of course since renewable-power legislation was passed in
2000.
Price Supports
While Merkel preserved the preferential pricing, known as a
feed-in tariff, that has encouraged the installation of solar
panels such as Clever's and the construction of wind farms, her
critics say she's setting the incentives too low. Tariffs for
new projects can be adjusted by the government as a way of
controlling the pace of new facility construction and reacting
to changes in the relative costs of renewable energy versus
fossil fuels.
The price supports for solar power were cut three times in
2010. The above-market payments to wind and solar generators are
passed through to consumers in their electricity bills.
Merkel says her plan strikes a balance, protecting German
manufacturers such as Siemens AG and Volkswagen AG from rising
electricity costs that might make their exports noncompetitive,
while also continuing to add green power.
"I think we can say our energy system will be the most
efficient and environmentally friendly in the world," Merkel
said on Sept. 6.
Juergen Trittin, a leader of the Green Party, which was a
partner in the government when the push for renewables began in
earnest a decade ago, says German job growth depends on the
continued expansion of wind and solar.
Green Power Jobs
"We should be getting out of nuclear power faster and
relying more on renewable energy, which has led us to an export
surplus," he said in a speech to the country's parliament in
October.
About 340,000 workers in Germany are employed in the making
and installation of wind turbines, solar panels and other clean-
energy equipment. That workforce has doubled since 2004,
according to the environment ministry. The robust domestic
market for wind and solar has helped German companies such as
Siemens develop clean technologies that sell around the world.
Still, despite the growth in exports, employment in
Germany's clean-energy businesses remains sensitive to changes
in government policy, says Claudia Kemfert, head of the energy
and environment department at DIW Berlin, an economic research
institute.
'Right Policy'
"Supporting renewables is the right policy from an
economic perspective, despite the high initial costs," Kemfert
says. "The renewable industry is the only industry in Germany
that reported an increase in revenue over the past three
years."
In addition to the jobs argument, Kemfert and others say
Germany will benefit as renewables replace coal, gas and oil
that are mostly imported and subject to price swings.
Environment Minister Norbert Roettgen says expansion of
wind and solar will provide Germany with cheap power by mid-
century, when fossil fuels become scarce and expensive.
Roettgen, from Merkel's Christian Democratic Union, wanted the
energy plan to tilt more in favor of renewables. Economy
Minister Rainer Bruederle and members of his Free Democratic
Party lobbied for a longer life span for the country's nuclear
plants and more-aggressive cuts in the preferential pricing for
clean-energy installations.
Merkel's plan includes a goal of adding as much as 25,000
megawatts of wind turbines in the North Sea and the Baltic. That
would be a lot of generation: The 17 nuclear plants in operation
in Germany today have a total capacity of about 21,500 megawatts
and produce almost a quarter of the country's power.
Offshore Wind
Adding offshore wind facilities would represent a next step
for Germany, which lags behind Denmark and the U.K. in this
category. The giant turbines anchored to the seabed require a
bigger upfront investment -- and the likely involvement of large
power producers such as RWE AG. Critics of Merkel's plan
question whether it provides sufficient support to get these
facilities built.
Nuclear power is unpopular in Germany, even as neighboring
France relies on reactors for three-quarters of its electricity
and is building more. The 1986 explosion and fire at the
Chernobyl plant in Ukraine, which sent up a plume of radiation
that rmeached much of Europe, turned public opinion against the
technology.
Only about a third of Germans believe that delaying the
retirement of nuclear units is necessary to help with the
transition to renewables, according to a survey commissioned by
environmental group Greenpeace and conducted by TNS Emnid.
Nuclear, No Thanks
"We don't need a nuclear extension," says Olaf Hohmeyer,
a professor of energy economics at the University of Flensburg.
"It's merely a license to print money."
Hohmeyer says Germany could generate all of its power using
renewables by 2050. As long as nuclear plants are providing
cheaper power to the grid, the incentive to build the offshore
wind-power projects, in particular, will be inadequate, he says.
The country's largest utilities, E.ON AG and RWE, along
with Karlsruhe-based Energie Baden-Wuerttemberg AG and a unit of
Sweden's Vattenfall AB, operate the country's nuclear plants.
They will earn about 6 billion euros ($8 billion) in extra
profit for every year's delay in the retirement of their
reactors, according to estimates from the environment and
resources department of the RWI economic institute in Essen.
About half of that money will go to the government to support
new power generation.
"Chancellor Merkel's energy policy is being written by
Juergen Grossmann, not by the cabinet," the Green Party's
Trittin told the Parliament, referring to the chief executive
officer of RWE.
Special Tariffs
The Greens and the Social Democratic Party created the
system of special tariffs to support wind and solar a decade
ago, when they were together in a coalition government. They
also enacted the deadline to phase out nuclear power and plan to
sue to keep Merkel from delaying the plant retirements.
Most reactor waste is still stored in temporary casks near
each nuclear plant, which adds to the concerns that Germans have
about the technology. Any permanent disposal for highly
radioactive waste is at least two decades away, as the country
struggles to choose and prepare an appropriate site, says
Wolfram Koenig, president of the German nuclear safety
regulator.
One advantage of nuclear power is that it emits almost no
greenhouse gases. Germany is subject to the carbon dioxide
emission reductions that the European Union promised under the
Kyoto Protocol climate treaty. Keeping the country's reactors
online longer means that growth in renewable generation can be
used to retire coal plants. Power demand grows by almost 1
percent each year, even though the German population is
shrinking.
'Shape the Transition'
"Continued use of nuclear energy will help us to shape the
transition to the renewable age in an ecologically and
economically sensible fashion," Economy Minister Bruederle
says.
Electricity costs are already steep in Germany. Residential
consumers in 2009 paid the second-highest average rate among the
27 members of the EU: 22.9 euro cents per kilowatt-hour, less
than the 25.5 cents paid in Denmark but 39 percent more than the
EU average of 16.5 cents.
While the tab for subsidizing renewable power is still a
small part of a typical monthly electric bill -- less than the
price of a Starbucks cappuccino -- that slice is growing. A
surge in solar-cell installations in 2010 means that the total
cost of the feed-in tariffs will jump 72 percent in 2011,
according to calculations by the owners of Germany's high-
voltage transmission system.
46 Billion Euros
Support for solar power alone may cost 46 billion euros
from 2000 to 2030, according to a study by the Wuppertal
Institute for Climate, Environment and Energy.
While these costs are high, they aren't yet crippling, and
Merkel aims to keep it that way. Spain's support for solar
power, by contrast, has become a nightmare for the government.
Spain, which was trying to mimic Germany's approach, set
the tariffs too high, and too much new generation got built. The
country is now reneging, cutting feed-in tariffs that investors
were promised.
In addition to the concern that the price supports won't be
set high enough to get new clean-power facilities built, some
energy experts and environmentalists complain that Merkel is
doing little to integrate renewable-energy facilities into the
electricity grid.
'Huge Transition'
"There is no plan for this huge transition," says Sven
Teske, a Greenpeace researcher.
While Clever benefits from the ability to sell excess power
to electricity distributors, Germany's promotion of renewable
energy may erode profits at E.ON, RWE and other large power
producers. Their nuclear units, designed to operate at full
output around the clock, are a poor complement to wind and
solar, which are intermittent and depend on daylight and
favorable weather.
Sometimes when breezes blow strongly and wind turbines
generate ample power, reactor owners have to pay distributors to
take their electricity, University of Flensburg's Hohmeyer says.
With permission to keep reactors online for longer, big
electricity producers have every incentive to slow the
investment in renewables such as offshore wind, he says.
Germany's chances of continuing to lead the world in
renewable energy may depend on whether Merkel really has struck
the proper balance.
For Related News and Information:
Most-read environment stories: MNI ENV <GO>
Climate-change news: NI CLIMATE <GO>
Top environment, renewable energy page: GREEN <GO>
Stories on energy from agriculture: TNI AGR ALTNRG BN <GO>
Today's main power stories: PTOP <GO>
--Editors: Rob Dieterich, Vince Bielski
To contact the reporter responsible for this story:
Jeremy van Loon in Berlin at +49-30-70010-6231 or
jvanloon@bloomberg.net
To contact the editor responsible for this story:
Reed Landberg in London at +44-20-7330-7862 or
landberg@bloomberg.net
To write a letter to the editor, send an e-mail to
bloombergmag@bloomberg.net or type MAG <GO>
(BN) Australian Rains Swamp Profit at Germany’s Coal-Fed
+------------------------------------------------------------------------------+
Australian Rains Swamp Profit at Germany's Coal-Fed Power Plants
2011-01-05 00:01:26.755 GMT
By Mathew Carr, Catherine Airlie and Lars Paulsson
Jan. 5 (Bloomberg) -- Profit from producing power from coal
in Germany, Europe's biggest consumer of the fuel, is headed
toward the lowest level on record as rainfall in Australia
closes mines and raises prices worldwide.
Returns at coal stations in Germany tumbled 39 percent in
the past two days to 2.54 euros ($3.38) a megawatt hour. That's
near the 1.79 euros reached on Dec. 20, the lowest since
Bloomberg began compiling the data in May 2008. European coal
rose to the most in more than two years yesterday.
The wettest ever September-to-November in Australia, the
world's biggest coal exporter, has put an area in Queensland
state the size of France and Germany under water, cutting
shipments by 73 percent, according to Macquarie Group Ltd. While
most of Australia's coal is sold to steelmakers, higher prices
are spilling over into Germany, where E.ON AG and RWE AG use it
for 18 percent of the country's electricity, and Britain, where
Drax Group Plc operates western Europe's biggest coal-fed plant.
"Queensland is an issue," said Tris Simmonds, the London-
based head of coal trading at GFI Group Inc., a New York-based
broker. "Further potential supply disruption is drawing out
tentative buying interest," driving up prices.
Coal for delivery to Europe in 2012 traded at $122.50 a
metric ton yesterday, the highest level since Nov. 5, 2008, and
closed at $120 a ton, according to broker data.
Price Hedging
The increase in prices has left the profit from turning
coal into power next year, known as the clean-dark spread, 81
percent lower than a year ago in Germany as of yesterday. It
reached a high of 20.01 euros in December 2008. The calculation
includes the cost of buying European Union carbon allowances.
While coal is being driven higher by the flooding,
utilities that use the fuel can hedge against the gains to
reduce their costs. Prices rose last year amid record demand
driven by China, the biggest energy consumer, with contracts for
delivery to Europe in 2012 jumping 9.6 percent.
European utilities "will choose not to lock into these
poor margins," said Angelos Anastasiou, a London-based analyst
at Investec Securities Ltd.
RWE, Germany's second-biggest utility, doesn't use
Australian coal at its plants and isn't yet able to calculate
the effect of the price increases, Martin Pack, an Essen,
Germany-based spokesman for the company, said yesterday. E.ON,
which uses coal for 34 percent of the power it produces in
Europe, had no comment yesterday, according to company spokesman
Georg Oppermann.
Length of Disruption
"We're not directly affected," said RWE's Pack. Any lost
profit will depend on how long the disruption lasts, he said.
RWE produced 24 percent of its power in 2009 from burning hard
coal. Lignite, a soft coal, accounted for 38 percent, according
to the company's annual report.
Drax uses about 10 million tons of coal every year at the
4,000-megawatt plant in Selby, northern England. The company
says it trades electricity as much as three years in advance to
protect against price fluctuations. A Selby-based spokesman
declined to comment yesterday.
Drax is "well hedged for this year and would have
increased its contracted position last December during the cold
snap, when power prices were pushed up," Anastasiou said.
"They'll be biding their time until margins get better."
The U.K.'s clean-dark spread for February dropped 50
percent over the past two days to 2.13 pounds ($3.32) a megawatt
hour. That's the lowest profit on next-month power generation
using coal since Nov. 26, according to Bloomberg data.
Lost Production
The rain in Queensland has left at least 10 people dead and
affected as many as 200,000 others. Officials in the
northeastern state declared a disaster on Dec. 28 as areas were
cut off. The disruption has cost the coal industry $1 billion in
lost production, the Australian Broadcasting Corp. reported.
These are "Old Testament-like floods" that will hurt
exports of coal and wheat, Dennis Gartman, a Suffolk, Virginia-
based economist, said yesterday in his daily newsletter.
BHP Billiton Ltd., the world's biggest miner, and Rio Tinto
Group have declared so-called force majeure amid the disaster,
allowing them to miss contractual obligations because of
circumstances beyond their control.
Australia shipped 259 million tons of coal for steel and
power in 2009, according to the World Coal Association.
Queensland's exports account for about 180 million tons a year,
about a fifth of the world's total, according to Sverre Bjorn
Svenning, an analyst at Fearnley Consultants A/S in Oslo.
"The impact on export volumes is still ahead of us," said
Emmanuel Fages, a Paris-based analyst at Societe Generale SA.
"The first price to increase is Australia."
Export-coal prices at the Australian port of Newcastle, an
Asian benchmark, gained 3 percent in the week to Dec. 31
to $126.10 a ton, the highest level since October 2008, said
Petersfield, England-based researcher IHS McCloskey.
For Related News and Information:
Coal Prices: COAL <GO>
Top Power Stories: PTOP <GO>
Technical Gauges: BTST <GO>
--With assistance from Robert Fenner and Ben Sharples in
Melbourne, Alistair Holloway in London, Nicholas Comfort in
Frankfurt, Alaric Nightingale in London, and Rudy Ruitenberg in
Paris. Editors: Mike Anderson, Steve Voss
To contact the reporters on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net;
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net;
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Australian Rains Swamp Profit at Germany's Coal-Fed Power Plants
2011-01-05 00:01:26.755 GMT
By Mathew Carr, Catherine Airlie and Lars Paulsson
Jan. 5 (Bloomberg) -- Profit from producing power from coal
in Germany, Europe's biggest consumer of the fuel, is headed
toward the lowest level on record as rainfall in Australia
closes mines and raises prices worldwide.
Returns at coal stations in Germany tumbled 39 percent in
the past two days to 2.54 euros ($3.38) a megawatt hour. That's
near the 1.79 euros reached on Dec. 20, the lowest since
Bloomberg began compiling the data in May 2008. European coal
rose to the most in more than two years yesterday.
The wettest ever September-to-November in Australia, the
world's biggest coal exporter, has put an area in Queensland
state the size of France and Germany under water, cutting
shipments by 73 percent, according to Macquarie Group Ltd. While
most of Australia's coal is sold to steelmakers, higher prices
are spilling over into Germany, where E.ON AG and RWE AG use it
for 18 percent of the country's electricity, and Britain, where
Drax Group Plc operates western Europe's biggest coal-fed plant.
"Queensland is an issue," said Tris Simmonds, the London-
based head of coal trading at GFI Group Inc., a New York-based
broker. "Further potential supply disruption is drawing out
tentative buying interest," driving up prices.
Coal for delivery to Europe in 2012 traded at $122.50 a
metric ton yesterday, the highest level since Nov. 5, 2008, and
closed at $120 a ton, according to broker data.
Price Hedging
The increase in prices has left the profit from turning
coal into power next year, known as the clean-dark spread, 81
percent lower than a year ago in Germany as of yesterday. It
reached a high of 20.01 euros in December 2008. The calculation
includes the cost of buying European Union carbon allowances.
While coal is being driven higher by the flooding,
utilities that use the fuel can hedge against the gains to
reduce their costs. Prices rose last year amid record demand
driven by China, the biggest energy consumer, with contracts for
delivery to Europe in 2012 jumping 9.6 percent.
European utilities "will choose not to lock into these
poor margins," said Angelos Anastasiou, a London-based analyst
at Investec Securities Ltd.
RWE, Germany's second-biggest utility, doesn't use
Australian coal at its plants and isn't yet able to calculate
the effect of the price increases, Martin Pack, an Essen,
Germany-based spokesman for the company, said yesterday. E.ON,
which uses coal for 34 percent of the power it produces in
Europe, had no comment yesterday, according to company spokesman
Georg Oppermann.
Length of Disruption
"We're not directly affected," said RWE's Pack. Any lost
profit will depend on how long the disruption lasts, he said.
RWE produced 24 percent of its power in 2009 from burning hard
coal. Lignite, a soft coal, accounted for 38 percent, according
to the company's annual report.
Drax uses about 10 million tons of coal every year at the
4,000-megawatt plant in Selby, northern England. The company
says it trades electricity as much as three years in advance to
protect against price fluctuations. A Selby-based spokesman
declined to comment yesterday.
Drax is "well hedged for this year and would have
increased its contracted position last December during the cold
snap, when power prices were pushed up," Anastasiou said.
"They'll be biding their time until margins get better."
The U.K.'s clean-dark spread for February dropped 50
percent over the past two days to 2.13 pounds ($3.32) a megawatt
hour. That's the lowest profit on next-month power generation
using coal since Nov. 26, according to Bloomberg data.
Lost Production
The rain in Queensland has left at least 10 people dead and
affected as many as 200,000 others. Officials in the
northeastern state declared a disaster on Dec. 28 as areas were
cut off. The disruption has cost the coal industry $1 billion in
lost production, the Australian Broadcasting Corp. reported.
These are "Old Testament-like floods" that will hurt
exports of coal and wheat, Dennis Gartman, a Suffolk, Virginia-
based economist, said yesterday in his daily newsletter.
BHP Billiton Ltd., the world's biggest miner, and Rio Tinto
Group have declared so-called force majeure amid the disaster,
allowing them to miss contractual obligations because of
circumstances beyond their control.
Australia shipped 259 million tons of coal for steel and
power in 2009, according to the World Coal Association.
Queensland's exports account for about 180 million tons a year,
about a fifth of the world's total, according to Sverre Bjorn
Svenning, an analyst at Fearnley Consultants A/S in Oslo.
"The impact on export volumes is still ahead of us," said
Emmanuel Fages, a Paris-based analyst at Societe Generale SA.
"The first price to increase is Australia."
Export-coal prices at the Australian port of Newcastle, an
Asian benchmark, gained 3 percent in the week to Dec. 31
to $126.10 a ton, the highest level since October 2008, said
Petersfield, England-based researcher IHS McCloskey.
For Related News and Information:
Coal Prices: COAL <GO>
Top Power Stories: PTOP <GO>
Technical Gauges: BTST <GO>
--With assistance from Robert Fenner and Ben Sharples in
Melbourne, Alistair Holloway in London, Nicholas Comfort in
Frankfurt, Alaric Nightingale in London, and Rudy Ruitenberg in
Paris. Editors: Mike Anderson, Steve Voss
To contact the reporters on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net;
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net;
Lars Paulsson in London at +44-207-673-2759 or
lpaulsson@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
2011/01/04
gas vs co2/EU Carbon Advances, Tracking Earlier Natural Gas
By Mathew Carr
Jan. 4 (Bloomberg) -- European Union carbon permits advanced, tracking gains in natural gas over the past two weeks.
EU allowances for December 2011 rose 0.3 percent to 14.28 euros ($19.14) a metric ton as of 9:57 a.m. on London's ICE Futures Europe exchange. U.K. natural gas for delivery in the six months through September rose 2.8 percent since Dec. 21, compared with 0.7 percent for carbon.
Higher gas prices may prompt some power generators to switch from the fuel, which requires half as many carbon permits as coal. Carbon rose 8.3 percent last year.
``Energy prices are clearly supportive and EU allowance prices should follow the rise of power and gas prices, which they have lagged recently,'' analysts including Paris-based Emmanuel Fages at Orbeo said yesterday in an e-mailed research report. Orbeo, the carbon venture of Rhodia SA and Societe Generale SA, said carbon may rise this week to 14.60 euros.
Carbon fell 5.3 percent last month, which was ``exorbitant'' considering that utilities need to hedge their forward sales of power this year, said Heiko Siemann, vice president at UniCredit AG's Carbon Solutions. ``Some cashed in their positions at the end of the year,'' he said today by e-mail. ``Now we see the backlash.''
For Related News and Information:
U.K. power-market stories {TNI UK PWRMARKET <GO>}
Today's top energy news {ETOP <GO>}
U.K. electricity prices {ELEU <GO>}
Natural-gas markets menu {NATG <GO>}
--Editors: Rob Verdonck, John Buckley
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
(BN) Coal Stockpiles at Queensland Port ‘Very Low’ on Flood
+------------------------------------------------------------------------------+
Coal Stockpiles at Queensland Port 'Very Low' on Flood (Update1)
2011-01-04 05:44:22.962 GMT
(Updates with rail line closed in third paragraph.)
By Ben Sharples
Jan. 4 (Bloomberg) -- Coal stockpiles at the export harbor
of Gladstone in Australia's Queensland state are "very low"
after flooding shut the Blackwater rail network that transports
the commodity from mines to the port.
Eighteen ships are outside the harbor waiting to load at
the RG Tanna terminal, Acting Chief Executive Officer Craig
Walker said in an e-mailed statement today. A further 12 are
expected at the port in the next 10 days, Walker said.
The Blackwater rail network, which serves at least 20 mines,
remains closed by the flooding, QR National Ltd. Spokesman Mark
Hairsine said in an e-mailed statement. BHP Billiton Ltd., Rio
Tinto Group and Xstrata Plc are among companies that transport
coal on the line to Gladstone.
The Dawson River will continue to cut the Blackwater line
near Duaringa into next week, Hairsine said. The Moura network,
which also transports the commodity to Gladstone, is due to
start partial operations today, he said.
Gladstone port, about 450 kilometers (280 miles) north of
the state capital Brisbane, has the capacity to stockpile 6
million metric tons of coal. Stocks have been at about 2.3
million tons for "most of" 2010, Lee McIvor, a spokeswoman,
said by phone today.
For Related News and Information:
Top Power Stories: PTOP <GO>
--Editors: John Viljoen, Ryan Woo.
To contact the reporter on this story:
Ben Sharples in Melbourne at +61-3-9228-8732 or
bsharples@bloomberg.net
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net.
Coal Stockpiles at Queensland Port 'Very Low' on Flood (Update1)
2011-01-04 05:44:22.962 GMT
(Updates with rail line closed in third paragraph.)
By Ben Sharples
Jan. 4 (Bloomberg) -- Coal stockpiles at the export harbor
of Gladstone in Australia's Queensland state are "very low"
after flooding shut the Blackwater rail network that transports
the commodity from mines to the port.
Eighteen ships are outside the harbor waiting to load at
the RG Tanna terminal, Acting Chief Executive Officer Craig
Walker said in an e-mailed statement today. A further 12 are
expected at the port in the next 10 days, Walker said.
The Blackwater rail network, which serves at least 20 mines,
remains closed by the flooding, QR National Ltd. Spokesman Mark
Hairsine said in an e-mailed statement. BHP Billiton Ltd., Rio
Tinto Group and Xstrata Plc are among companies that transport
coal on the line to Gladstone.
The Dawson River will continue to cut the Blackwater line
near Duaringa into next week, Hairsine said. The Moura network,
which also transports the commodity to Gladstone, is due to
start partial operations today, he said.
Gladstone port, about 450 kilometers (280 miles) north of
the state capital Brisbane, has the capacity to stockpile 6
million metric tons of coal. Stocks have been at about 2.3
million tons for "most of" 2010, Lee McIvor, a spokeswoman,
said by phone today.
For Related News and Information:
Top Power Stories: PTOP <GO>
--Editors: John Viljoen, Ryan Woo.
To contact the reporter on this story:
Ben Sharples in Melbourne at +61-3-9228-8732 or
bsharples@bloomberg.net
To contact the editor responsible for this story:
Clyde Russell at +65-6311-2423 or
crussell7@bloomberg.net.
(TEL) UK Met Office 'Kept Winter Forecast Secret From Public
Telegraph
+------------------------------------------------------------------------------+
Met Office 'Kept Winter Forecast Secret From Public'
2011-01-04 06:14:32.353 GMT
Steven Swinford
Jan. 4 (Telegraph) -- The Met Office knew that Britain was
facing an early and exceptionally cold winter but failed to warn
the public, hampering preparations for some of the coldest
weather on record.
In October the forecaster privately warned the Government -
with whom it has a contract - that Britain was likely to face an
extremely cold winter.
It kept the prediction secret, however, after facing severe
criticism over the accuracy of its long-term forecasts.
The Met Office eventually issued a public warning about the
early onset of winter a month later, just days before snow and
ice covered much of Britain and temperatures plummeted to the
lowest on record.
Motoring organisations and passenger groups said yesterday
that the delay hampered preparations for winter.
It has also been disclosed that the BBC is so concerned
about the accuracy of the Met Office's predictions that it has
decided to publish independent assessments of the forecasters'
performance on its website.
Roger Harrabin, an environment analyst at the BBC, told the
Radio Times: "The trouble is that we simply don't know how much
to trust the Met Office. How often does it get the weather right
and wrong. And we don't know how it compares with other,
independent forecasters.
"Can we rely on them if we are planning a garden party at
the weekend? Or want to know if we should take a brolly with us
tomorrow? Or planning a holiday next week?
"In a few year's time hopefully we'll all have a better idea
of whom to trust. By then the Met Office might have recovered
enough confidence to share with us its winter prediction of
whether to buy a plane ticket or a toboggan."
The decision to publish the assessment was welcomed by rival
forecasters.
Piers Corbyn, the owner of WeatherAction, an independent
forecaster, said: "This is a step in the right direction. The Met
Office has got it repeatedly and yet it remains the public
service forecaster. There needs to be greater competition. I hope
this will encourage but it is vital that the assessors and their
measurements are independent and objective."
The Met Office stopped making its long-term forecasts public
in March after a series of major gaffes.
In 2009 a predicted "barbecue summer" became a washout,
while a subsequent forecast of a "mild winter" turned out to be
one of the coldest in 30 years.
This winter, however, its seasonal forecast proved more
accurate. Mr Harrabin said: "Why didn't the Met Office tell us
that Greenland was about to swap weather with Godalming? The
truth is it [The Met Office] did suspect we were in for an
exceptionally cold early winter, and told the Cabinet Office so
in October. But we weren't let in on the secret.
"The reason? The Met Office no longer publishes its seasonal
forecasts because of the ridicule it suffered for predicting a
barbecue summer in 2009 – the summer that campers floated around
in their tents."
Edmund King, President of the AA, said the Met Office had a
"public duty" to publish its seasonal forecasts. He said that
according to a recent AA survey of 20,000 of its members only 3%
of motorists bought winter tyres.
He said: "The Met Office has a public duty to tell us its
forecasts so that we can prepare for adverse weather. As it was
many motorists were caught out."
A spokesman for the Met Office said: "In late October we
informed the Cabinet office that there were early indications of
a cold start to winter. Following public research we were told
that a monthly outlook would be of more use which is why we now
have the 6-15 day and 16-30 day forecast on our website."
-0- Jan/04/2011 06:14 GMT
+------------------------------------------------------------------------------+
Met Office 'Kept Winter Forecast Secret From Public'
2011-01-04 06:14:32.353 GMT
Steven Swinford
Jan. 4 (Telegraph) -- The Met Office knew that Britain was
facing an early and exceptionally cold winter but failed to warn
the public, hampering preparations for some of the coldest
weather on record.
In October the forecaster privately warned the Government -
with whom it has a contract - that Britain was likely to face an
extremely cold winter.
It kept the prediction secret, however, after facing severe
criticism over the accuracy of its long-term forecasts.
The Met Office eventually issued a public warning about the
early onset of winter a month later, just days before snow and
ice covered much of Britain and temperatures plummeted to the
lowest on record.
Motoring organisations and passenger groups said yesterday
that the delay hampered preparations for winter.
It has also been disclosed that the BBC is so concerned
about the accuracy of the Met Office's predictions that it has
decided to publish independent assessments of the forecasters'
performance on its website.
Roger Harrabin, an environment analyst at the BBC, told the
Radio Times: "The trouble is that we simply don't know how much
to trust the Met Office. How often does it get the weather right
and wrong. And we don't know how it compares with other,
independent forecasters.
"Can we rely on them if we are planning a garden party at
the weekend? Or want to know if we should take a brolly with us
tomorrow? Or planning a holiday next week?
"In a few year's time hopefully we'll all have a better idea
of whom to trust. By then the Met Office might have recovered
enough confidence to share with us its winter prediction of
whether to buy a plane ticket or a toboggan."
The decision to publish the assessment was welcomed by rival
forecasters.
Piers Corbyn, the owner of WeatherAction, an independent
forecaster, said: "This is a step in the right direction. The Met
Office has got it repeatedly and yet it remains the public
service forecaster. There needs to be greater competition. I hope
this will encourage but it is vital that the assessors and their
measurements are independent and objective."
The Met Office stopped making its long-term forecasts public
in March after a series of major gaffes.
In 2009 a predicted "barbecue summer" became a washout,
while a subsequent forecast of a "mild winter" turned out to be
one of the coldest in 30 years.
This winter, however, its seasonal forecast proved more
accurate. Mr Harrabin said: "Why didn't the Met Office tell us
that Greenland was about to swap weather with Godalming? The
truth is it [The Met Office] did suspect we were in for an
exceptionally cold early winter, and told the Cabinet Office so
in October. But we weren't let in on the secret.
"The reason? The Met Office no longer publishes its seasonal
forecasts because of the ridicule it suffered for predicting a
barbecue summer in 2009 – the summer that campers floated around
in their tents."
Edmund King, President of the AA, said the Met Office had a
"public duty" to publish its seasonal forecasts. He said that
according to a recent AA survey of 20,000 of its members only 3%
of motorists bought winter tyres.
He said: "The Met Office has a public duty to tell us its
forecasts so that we can prepare for adverse weather. As it was
many motorists were caught out."
A spokesman for the Met Office said: "In late October we
informed the Cabinet office that there were early indications of
a cold start to winter. Following public research we were told
that a monthly outlook would be of more use which is why we now
have the 6-15 day and 16-30 day forecast on our website."
-0- Jan/04/2011 06:14 GMT
folks...why carbon rising as UK gas falls?
By Ewa Krukowska
Jan. 4 (Bloomberg) -- Carbon permits under the European
Union's emissions-trading system, the world's biggest
cap-and-trade program, were little changed.
EU allowances for December 2011 delivery traded at 14.25
euros a metric ton as of 7:04 a.m. on London's ICE Futures Europe
exchange, compared with 14.24 euros at the close of the previous
session.
For Related News and Information:
Emission market news {NI ENVMARKET <GO>}
Today's top energy stories {ETOP <GO> }
European power-markets home page {EPWR <GO>}
Sustainability, environmental indexes {SEI <GO>}
wrap(BN) EU Carbon Advances for First Year in Three as Econo
+------------------------------------------------------------------------------+
EU Carbon Advances for First Year in Three as Economy Recovers
2010-12-31 13:44:38.328 GMT
By Ewa Krukowska
Dec. 31 (Bloomberg) -- European Union carbon permits
snapped two consecutive years of decline amid signs the region's
economy is recovering from recession.
Allowances for December 2011 delivery in the world's
biggest cap-and-trade program gained 8.3 percent this year after
falling 23 percent last year and 29 percent in 2008. They traded
at 14.24 euros a metric ton today on London's ICE Futures Europe
exchange.
"The economic recovery is definitely the main reason for
the increase," said Roman Richter, a trader at UniCredit SpA's
Carbon Solutions group in Munich. "More and more industrial
consumers are also taking into account that they will have to
buy permits at auctions after 2012, so we are bullish about the
price in coming years."
The 27-nation EU, which gave away the majority of permits
since it started its emissions trading system, or ETS, in 2005,
will require most emitters to purchase their allotment of
allowances when the second trading period ends in 2012.
The bloc will auction about 60 percent of all CO2 permits
in 2013, according to estimates by the European Commission. That
proportion will increase in coming years.
The cap for carbon-dioxide discharges for that year has
been set at 2.04 billion tons, including aluminum and chemical
makers joining the program in its third phase, which runs from
2013 to 2020. This would be worth around 29 billion euros at
today's prices. Airlines become part of the program in 2012.
Few Bright Patches
Still, the current five-year trading period is likely to
remain oversupplied until it ends in 2012, according to
Alessandro Vitelli, an analyst at IDEAcarbon in London.
"This year has been the most stable we had in a long time
and it may continue next year," Vitelli said. "The economic
outlook for 2011 doesn't seem to show too many bright patches.
For the EU ETS there will be a whole series of regulatory
changes and people will keep looking how to extract the most
value from their freely allocated permits."
Amid a sovereign debt crisis, governments across Europe are
stepping up austerity measures to tackle deficits, making it
harder for some nations to emerge from recession. Economic
growth in the euro region may weaken to about 1.4 percent in
2011 from about 1.6 percent in 2010, according to the European
Central Bank's latest projections.
EU member states may decide as early as in January whether
to back a proposal by the European Commission, the bloc's
regulator, to prevent imported emissions credits linked to
certain industrial gases from the use for compliance in the
European cap-and-trade program from the beginning of 2013.
The commission proposed last month to ban United Nations-
sponsored offsets from projects that cut hydrofluorocarbon-23
and nitrous oxide from adipic acid production. Member states
need to approve the proposal before it can enter into force.
UN Certified Emission Reductions for delivery in December
2011 closed at 11.38 euros a metric ton yesterday, gaining 3.5
percent this year.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--With assistance from Lars Paulsson in London. Editors: John
Buckley, Mike Anderson.
To contact the reporter on this story:
Ewa Krukowska in Warsaw at +48-22-433-44-70 or
ekrukowska@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
EU Carbon Advances for First Year in Three as Economy Recovers
2010-12-31 13:44:38.328 GMT
By Ewa Krukowska
Dec. 31 (Bloomberg) -- European Union carbon permits
snapped two consecutive years of decline amid signs the region's
economy is recovering from recession.
Allowances for December 2011 delivery in the world's
biggest cap-and-trade program gained 8.3 percent this year after
falling 23 percent last year and 29 percent in 2008. They traded
at 14.24 euros a metric ton today on London's ICE Futures Europe
exchange.
"The economic recovery is definitely the main reason for
the increase," said Roman Richter, a trader at UniCredit SpA's
Carbon Solutions group in Munich. "More and more industrial
consumers are also taking into account that they will have to
buy permits at auctions after 2012, so we are bullish about the
price in coming years."
The 27-nation EU, which gave away the majority of permits
since it started its emissions trading system, or ETS, in 2005,
will require most emitters to purchase their allotment of
allowances when the second trading period ends in 2012.
The bloc will auction about 60 percent of all CO2 permits
in 2013, according to estimates by the European Commission. That
proportion will increase in coming years.
The cap for carbon-dioxide discharges for that year has
been set at 2.04 billion tons, including aluminum and chemical
makers joining the program in its third phase, which runs from
2013 to 2020. This would be worth around 29 billion euros at
today's prices. Airlines become part of the program in 2012.
Few Bright Patches
Still, the current five-year trading period is likely to
remain oversupplied until it ends in 2012, according to
Alessandro Vitelli, an analyst at IDEAcarbon in London.
"This year has been the most stable we had in a long time
and it may continue next year," Vitelli said. "The economic
outlook for 2011 doesn't seem to show too many bright patches.
For the EU ETS there will be a whole series of regulatory
changes and people will keep looking how to extract the most
value from their freely allocated permits."
Amid a sovereign debt crisis, governments across Europe are
stepping up austerity measures to tackle deficits, making it
harder for some nations to emerge from recession. Economic
growth in the euro region may weaken to about 1.4 percent in
2011 from about 1.6 percent in 2010, according to the European
Central Bank's latest projections.
EU member states may decide as early as in January whether
to back a proposal by the European Commission, the bloc's
regulator, to prevent imported emissions credits linked to
certain industrial gases from the use for compliance in the
European cap-and-trade program from the beginning of 2013.
The commission proposed last month to ban United Nations-
sponsored offsets from projects that cut hydrofluorocarbon-23
and nitrous oxide from adipic acid production. Member states
need to approve the proposal before it can enter into force.
UN Certified Emission Reductions for delivery in December
2011 closed at 11.38 euros a metric ton yesterday, gaining 3.5
percent this year.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--With assistance from Lars Paulsson in London. Editors: John
Buckley, Mike Anderson.
To contact the reporter on this story:
Ewa Krukowska in Warsaw at +48-22-433-44-70 or
ekrukowska@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
(BN) Kenya Power, Standard Bank Sign Carbon Accord, East African Says
+------------------------------------------------------------------------------+
Kenya Power, Standard Bank Sign Carbon Accord, East African Says
2011-01-03 08:48:40.171 GMT
By Ana Monteiro
Jan. 3 (Bloomberg) -- Kenya Power & Lighting Ltd. and
Standard Bank Group Ltd. signed a carbon-trading agreement that
will enable the utility to avoid 90,000 metric tons of emissions
annually, the East African reported, citing the electricity
company's chief executive officer, Joseph Njoroge.
Kenya Power may generate $1.25 million annually should the
project be registered with the United Nations, the Nairobi-based
newspaper cited Njoroge as saying. CFC Stanbic Bank, a unit of
Standard Bank, will structure the project through Standard's
carbon-trading desk in London, according to the East African.
Story link: {NSN LEFUQR6S9728<GO>}
To contact the editor responsible for this story:
Ana Monteiro at +27-11-286-1914 or
amonteiro4@bloomberg.net
-0- Jan/03/2011 08:48 GMT
Kenya Power, Standard Bank Sign Carbon Accord, East African Says
2011-01-03 08:48:40.171 GMT
By Ana Monteiro
Jan. 3 (Bloomberg) -- Kenya Power & Lighting Ltd. and
Standard Bank Group Ltd. signed a carbon-trading agreement that
will enable the utility to avoid 90,000 metric tons of emissions
annually, the East African reported, citing the electricity
company's chief executive officer, Joseph Njoroge.
Kenya Power may generate $1.25 million annually should the
project be registered with the United Nations, the Nairobi-based
newspaper cited Njoroge as saying. CFC Stanbic Bank, a unit of
Standard Bank, will structure the project through Standard's
carbon-trading desk in London, according to the East African.
Story link: {NSN LEFUQR6S9728<GO>}
To contact the editor responsible for this story:
Ana Monteiro at +27-11-286-1914 or
amonteiro4@bloomberg.net
-0- Jan/03/2011 08:48 GMT
(BN) Floodwaters May Threaten More Cotton in Queensland,
happy new year folks
+------------------------------------------------------------------------------+
Floodwaters May Threaten More Cotton in Queensland, Group Says
2011-01-04 08:17:06.735 GMT
By Wendy Pugh
Jan. 4 (Bloomberg) -- Flooding in Australia, the fourth-
largest cotton exporter, may threaten more crops in Queensland
state as rivers continue to swell and with further rain forecast
for growing regions.
The Balonne River is at risk of flooding crops at St George
as damage is assessed around Theodore and Emerald, where waters
are receding, Sydney-based Cotton Australia spokesman David Bone
said. The floodwaters at St George, where cotton crops were
inundated in March, may peak next week, according to the Bureau
of Meteorology.
Cotton futures surged to an all-time high last month on
speculation that global demand led by China will outpace supply.
Heavy rainfall may curb yield potential in Queensland state
after Cotton Australia said Dec. 8 that national output this
year may reach a record 4.2 million bales from 665,000 hectares
(1.6 million acres).
"It's still a big crop but it hasn't had the sun and heat
units to really get the yields and quality that everyone was
expecting," David Watson, senior advisor, markets at FCStone
Australia Pty, said by phone from Sydney. Production estimates
could be cut by about 200,000 bales by the wet weather, he said.
Cotton for March delivery gained as much as 1 percent to
$1.4366 a pound and was at $1.42 by 6:33 p.m. Melbourne time
after last year posting the biggest annual gain since 1973.
Planting of the Australian crop was completed last month
and harvesting will be from March to May.
PrimeAg Australia Ltd., a producer, estimated about 2,000
hectares, or 13 percent, of its 15,200 hectare cotton crop had
been inundated.
Damage Levels
"It will be at least a week before damage levels become
clear," PrimeAg Executive Chairman Peter Corish said in a
statement today to the Australian stock exchange. Some area
would be lost, while others may recover if plants were flooded
for less than two to three days, he said.
The company's farms at Goondiwindi, Moree and Gunnedah had
avoided any flooding and growing conditions for the summer crops
had been favorable, it said.
Cotton Australia's Bone left unchanged an estimate that
7,500 hectares had been destroyed, while the yield impact was
unclear.
PrimeAg, based in Toowoomba, Queensland, fell 3.5 percent
to A$1.38, the lowest since Oct. 19, at the 4:10 p.m. Sydney-
time close on the Australian Stock Exchange.
More Rain
Parts of the cotton-growing region in northern New South
Wales and Queensland may receive up to 50 millimeters (2 inches)
of rain in the eight days ending Jan. 11, according to the
Bureau of Meteorology. The Balonne River at St George, located
about 500 kilometers (310 miles) inland from Brisbane, may peak
at more than 14 meters (46 feet) on Jan. 10 to Jan. 11, which
would be higher than flood levels in March, it said.
Yields on about 11,000 hectares in the St George and
Dirranbandi regions were threatened last March by flooding and
plants standing in water, according to Cotton Australia
estimates that month.
National cotton area may be 557,000 hectares this season,
the Australian Bureau of Agricultural and Resource Economics and
Sciences said in a report Dec. 7., up from 208,000 hectares a
year earlier. Queensland was forecast to account for 41 percent
of the area.
For Related News and Information:
Top commodity stories: CTOP <GO>
Top agricultural stories TOP AGR <GO>
Most read Australian news: MNI AUD <GO>
--Editors: Richard Dobson, Jake Lloyd-Smith.
To contact the reporter on this story:
Wendy Pugh in Melbourne +61-3-9228-8736 or
wpugh@bloomberg.net
To contact the editor responsible for this story:
Richard Dobson at +86-21-6104-3030 or
rdobson4@bloomberg.net
+------------------------------------------------------------------------------+
Floodwaters May Threaten More Cotton in Queensland, Group Says
2011-01-04 08:17:06.735 GMT
By Wendy Pugh
Jan. 4 (Bloomberg) -- Flooding in Australia, the fourth-
largest cotton exporter, may threaten more crops in Queensland
state as rivers continue to swell and with further rain forecast
for growing regions.
The Balonne River is at risk of flooding crops at St George
as damage is assessed around Theodore and Emerald, where waters
are receding, Sydney-based Cotton Australia spokesman David Bone
said. The floodwaters at St George, where cotton crops were
inundated in March, may peak next week, according to the Bureau
of Meteorology.
Cotton futures surged to an all-time high last month on
speculation that global demand led by China will outpace supply.
Heavy rainfall may curb yield potential in Queensland state
after Cotton Australia said Dec. 8 that national output this
year may reach a record 4.2 million bales from 665,000 hectares
(1.6 million acres).
"It's still a big crop but it hasn't had the sun and heat
units to really get the yields and quality that everyone was
expecting," David Watson, senior advisor, markets at FCStone
Australia Pty, said by phone from Sydney. Production estimates
could be cut by about 200,000 bales by the wet weather, he said.
Cotton for March delivery gained as much as 1 percent to
$1.4366 a pound and was at $1.42 by 6:33 p.m. Melbourne time
after last year posting the biggest annual gain since 1973.
Planting of the Australian crop was completed last month
and harvesting will be from March to May.
PrimeAg Australia Ltd., a producer, estimated about 2,000
hectares, or 13 percent, of its 15,200 hectare cotton crop had
been inundated.
Damage Levels
"It will be at least a week before damage levels become
clear," PrimeAg Executive Chairman Peter Corish said in a
statement today to the Australian stock exchange. Some area
would be lost, while others may recover if plants were flooded
for less than two to three days, he said.
The company's farms at Goondiwindi, Moree and Gunnedah had
avoided any flooding and growing conditions for the summer crops
had been favorable, it said.
Cotton Australia's Bone left unchanged an estimate that
7,500 hectares had been destroyed, while the yield impact was
unclear.
PrimeAg, based in Toowoomba, Queensland, fell 3.5 percent
to A$1.38, the lowest since Oct. 19, at the 4:10 p.m. Sydney-
time close on the Australian Stock Exchange.
More Rain
Parts of the cotton-growing region in northern New South
Wales and Queensland may receive up to 50 millimeters (2 inches)
of rain in the eight days ending Jan. 11, according to the
Bureau of Meteorology. The Balonne River at St George, located
about 500 kilometers (310 miles) inland from Brisbane, may peak
at more than 14 meters (46 feet) on Jan. 10 to Jan. 11, which
would be higher than flood levels in March, it said.
Yields on about 11,000 hectares in the St George and
Dirranbandi regions were threatened last March by flooding and
plants standing in water, according to Cotton Australia
estimates that month.
National cotton area may be 557,000 hectares this season,
the Australian Bureau of Agricultural and Resource Economics and
Sciences said in a report Dec. 7., up from 208,000 hectares a
year earlier. Queensland was forecast to account for 41 percent
of the area.
For Related News and Information:
Top commodity stories: CTOP <GO>
Top agricultural stories TOP AGR <GO>
Most read Australian news: MNI AUD <GO>
--Editors: Richard Dobson, Jake Lloyd-Smith.
To contact the reporter on this story:
Wendy Pugh in Melbourne +61-3-9228-8736 or
wpugh@bloomberg.net
To contact the editor responsible for this story:
Richard Dobson at +86-21-6104-3030 or
rdobson4@bloomberg.net
2011/01/03
Fwd: Oil's Top Forecasters See Third Year of Gains as China Leads 2011 Recovery
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Oil's Most Accurate See Second-Highest Price in 2011 (Update2)
2011-01-03 14:58:17.400 GMT
(Updates to add comment in sixth paragraph, today's price
in 14th.)
By Grant Smith and Mark Shenk
Jan. 3 (Bloomberg) -- Oil demand increasing at almost twice
the pace of supply is spurring the most-accurate forecasters to
predict the second-highest price on record in 2011.
Sanford C. Bernstein & Co., whose estimate last January was
within 1 percent of 2010's mean price of $79.60 a barrel, says
crude will average $90 this year. Natixis Bleichroeder Inc.,
which tied with Bernstein, sees $100 a barrel, 26 percent higher
than in 2010. Global oil use will increase 1.7 percent to a
record 87.8 million barrels a day this year, and output will
rise 0.9 percent, according to the U.S. Energy Department.
While economic growth in China, the world's biggest energy
consumer, will slow to 9 percent this year from 10 percent, that
would still be three times the rate in the U.S. and six times
Europe's, according to the median estimate in Bloomberg surveys
of economists. As oil prices rise, spare production capacity may
drop the most since 2003 as exporters including the 12 members
of OPEC boost supply, according to Bernstein.
"We expect OPEC to have to increase their production,
causing a reduction in spare capacity, which to us is
increasingly becoming a more important determinant of oil
prices," said Oswald Clint, who replaced Neil McMahon in August
as Bernstein's head oil analyst in London. "Since China became
a more important part of the demand pie, the spare-capacity
factor has become more important."
Highest Since 2008
Crude futures on the New York Mercantile Exchange will
average $87 in 2011, based on the median of 34 analyst estimates
compiled by Bloomberg. That would be the highest since the
record $99.75 reached in 2008 and 40 percent more than 2009's
average of $62.09.
Oil prices will average $93 a barrel this year and are
"very likely" to climb above $100, Jason Schenker, president
of Prestige Economics in Austin, Texas, one of the five most-
accurate forecasters in 2010, said today in an interview with
Deirdre Bolton on Bloomberg Television's "InsideTrack."
Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc are
forecast to report increased profit this year, according to
analysts' estimates compiled by Bloomberg. Airline earnings may
drop 40 percent partly because of increased fuel costs, the
International Air Transport Association said Dec. 14.
Oil is likely to trade at $75 to $120 this year, said Roger
Read, who since giving his forecast for an average of $100 has
left New York-based Natixis Bleichroeder to join Morgan Keegan &
Co. in Houston.
2010 Gain
Crude gained 15 percent last year, less than the 20 percent
advance of the Standard & Poor's GSCI gauge of 24 commodities.
The Standard & Poor's 500 index of stocks jumped 13 percent,
while bonds as measured by Bank of America Merrill Lynch's
Global Broad Market Plus Index returned 4.9 percent.
Spare production capacity in the Organization of Petroleum
Exporting Countries is about 5.7 million barrels a day and
sufficient to absorb this year's projected consumption increase,
according to Bernstein's Clint.
Higher-than-average U.S. stockpiles will limit price
increases this year, said Frank Schallenberger, head of
commodities at Landesbank Baden-Wuerttember in Stuttgart,
Germany, who predicts $87 oil this year. U.S. inventories were
339.4 million barrels as of Dec. 24, 7.6 percent above their
five-year seasonal norm, the U.S. Energy Department said.
Too Much Oil
"There isn't much for the bulls," said Schallenberger,
whose 2010 estimate of $78 was about 2 percent below last year's
average. "There's still too much oil."
This year's projected average of $87 is 4.8 percent lower
than the closing price of $91.38 on Dec. 31. Prices have almost
tripled since reaching a low of $32.40 in December 2008, when
OPEC agreed to record production cuts. The group acted after
crude tumbled from an all-time high of $147.27 in July 2008.
Futures for February delivery climbed as much 1.1 percent
to $92.40 a barrel in New York today, the highest price since
Oct. 7, 2008.
OPEC, which accounts for 40 percent of world production,
may raise supply if needed, Secretary-General Abdalla El-Badri
said on Dec. 11 at the group's last meeting in Quito, Ecuador.
Ali Al-Naimi, oil minister for Saudi Arabia, the group's biggest
producer, prefers $70 to $80, he said at the meeting.
"We subscribe to the notion that OPEC is the central bank
of oil," Schenker said. "If global growth continues to rise,
even at a decelerated pace, there may very well be a need for
OPEC to raise production quotas."
OPEC Meeting
OPEC said Dec. 11 it will skip a regularly scheduled first-
quarter meeting, a sign that it's ready to let prices climb,
said Lawrence Eagles, head of oil research at JPMorgan Chase &
Co. in New York. Crude will average $93 this year, according to
Eagles, whose 2010 forecast was $78.25.
"At any point, OPEC could bring on extra supply and push
the market down," he said. "We don't think they'll do that."
OPEC'S daily production capacity will shrink by about 1
million barrels to 4.7 million as countries outside the group
struggle to make up the shortfall, according to Clint. Supply
from Russia, the largest non-OPEC producer, will drop 2 percent
this year, while output from Mexico, which provides about 13
percent of U.S. imports, will fall 9 percent, he said.
Shell's earnings per share will rise to $3.71 this year
from $3.03 in 2010, according to the mean of as many as 22
analysts' forecasts compiled by Bloomberg. Exxon's will climb to
$6.55 from $5.92, based on 10 estimates. BP will post earnings
per share of $1.12, compared with a loss of 23.3 cents a year
earlier, according to 18 estimates.
Oil Earnings
Shell, based in The Hague and Europe's biggest oil company,
jumped 15 percent last year in Amsterdam trading. Irving, Texas-
based Exxon, the biggest publicly traded crude producer, rose
7.6 percent in New York. BP, which agreed last year to a payment
of $20 billion for its role in the biggest offshore oil spill in
U.S. history, fell 22 percent in London.
Airline profits will drop a total of $6 billion to $9.1
billion as fuel costs rise and passenger demand wanes, according
to the Montreal-based International Air Transport Association.
Oil consumption will increase by 1.3 million barrels a day,
or 1.5 percent, to a record 88.8 million in 2011, according to
the Paris-based International Energy Agency. Demand will fall
0.7 percent in Europe and be little changed in the U.S. China,
which accounts for 11 percent of the global total, will consume
9.7 million barrels a day this year, 4.8 percent more than last
year, the IEA said Dec. 10.
U.S. demand may also rise this year as the Federal Reserve
purchases $600 billion of Treasuries through the first half of
this year to sustain the recovery, according to JBC Energy, a
Vienna-based consultant.
"The growth story is the primary focus," said Prestige's
Schenker, whose 2010 forecast of $78 was about 2 percent below
the annual average. "If speculative forces push crude markedly
higher, it may be difficult for OPEC quota changes to
significantly impact prices."
For Related News and Information:
News on oil markets: NI OILMARKET <GO>
Top energy, oil stories: ETOP <GO> and OTOP <GO>
News on OPEC: NI OPEC <GO>
OPEC production targets: OPCA <GO>
--With assistance from Rachel Graham in London and Ayesha Daya
in Dubai. Editors: Mike Anderson, Joe Link
To contact the reporters on this story:
Grant Smith in London at +44-20-7330-7353 or
gsmith52@bloomberg.net;
Mark Shenk in New York at +1-212-617-4331 or
mshenk1@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Oil's Most Accurate See Second-Highest Price in 2011 (Update2)
2011-01-03 14:58:17.400 GMT
(Updates to add comment in sixth paragraph, today's price
in 14th.)
By Grant Smith and Mark Shenk
Jan. 3 (Bloomberg) -- Oil demand increasing at almost twice
the pace of supply is spurring the most-accurate forecasters to
predict the second-highest price on record in 2011.
Sanford C. Bernstein & Co., whose estimate last January was
within 1 percent of 2010's mean price of $79.60 a barrel, says
crude will average $90 this year. Natixis Bleichroeder Inc.,
which tied with Bernstein, sees $100 a barrel, 26 percent higher
than in 2010. Global oil use will increase 1.7 percent to a
record 87.8 million barrels a day this year, and output will
rise 0.9 percent, according to the U.S. Energy Department.
While economic growth in China, the world's biggest energy
consumer, will slow to 9 percent this year from 10 percent, that
would still be three times the rate in the U.S. and six times
Europe's, according to the median estimate in Bloomberg surveys
of economists. As oil prices rise, spare production capacity may
drop the most since 2003 as exporters including the 12 members
of OPEC boost supply, according to Bernstein.
"We expect OPEC to have to increase their production,
causing a reduction in spare capacity, which to us is
increasingly becoming a more important determinant of oil
prices," said Oswald Clint, who replaced Neil McMahon in August
as Bernstein's head oil analyst in London. "Since China became
a more important part of the demand pie, the spare-capacity
factor has become more important."
Highest Since 2008
Crude futures on the New York Mercantile Exchange will
average $87 in 2011, based on the median of 34 analyst estimates
compiled by Bloomberg. That would be the highest since the
record $99.75 reached in 2008 and 40 percent more than 2009's
average of $62.09.
Oil prices will average $93 a barrel this year and are
"very likely" to climb above $100, Jason Schenker, president
of Prestige Economics in Austin, Texas, one of the five most-
accurate forecasters in 2010, said today in an interview with
Deirdre Bolton on Bloomberg Television's "InsideTrack."
Exxon Mobil Corp., BP Plc and Royal Dutch Shell Plc are
forecast to report increased profit this year, according to
analysts' estimates compiled by Bloomberg. Airline earnings may
drop 40 percent partly because of increased fuel costs, the
International Air Transport Association said Dec. 14.
Oil is likely to trade at $75 to $120 this year, said Roger
Read, who since giving his forecast for an average of $100 has
left New York-based Natixis Bleichroeder to join Morgan Keegan &
Co. in Houston.
2010 Gain
Crude gained 15 percent last year, less than the 20 percent
advance of the Standard & Poor's GSCI gauge of 24 commodities.
The Standard & Poor's 500 index of stocks jumped 13 percent,
while bonds as measured by Bank of America Merrill Lynch's
Global Broad Market Plus Index returned 4.9 percent.
Spare production capacity in the Organization of Petroleum
Exporting Countries is about 5.7 million barrels a day and
sufficient to absorb this year's projected consumption increase,
according to Bernstein's Clint.
Higher-than-average U.S. stockpiles will limit price
increases this year, said Frank Schallenberger, head of
commodities at Landesbank Baden-Wuerttember in Stuttgart,
Germany, who predicts $87 oil this year. U.S. inventories were
339.4 million barrels as of Dec. 24, 7.6 percent above their
five-year seasonal norm, the U.S. Energy Department said.
Too Much Oil
"There isn't much for the bulls," said Schallenberger,
whose 2010 estimate of $78 was about 2 percent below last year's
average. "There's still too much oil."
This year's projected average of $87 is 4.8 percent lower
than the closing price of $91.38 on Dec. 31. Prices have almost
tripled since reaching a low of $32.40 in December 2008, when
OPEC agreed to record production cuts. The group acted after
crude tumbled from an all-time high of $147.27 in July 2008.
Futures for February delivery climbed as much 1.1 percent
to $92.40 a barrel in New York today, the highest price since
Oct. 7, 2008.
OPEC, which accounts for 40 percent of world production,
may raise supply if needed, Secretary-General Abdalla El-Badri
said on Dec. 11 at the group's last meeting in Quito, Ecuador.
Ali Al-Naimi, oil minister for Saudi Arabia, the group's biggest
producer, prefers $70 to $80, he said at the meeting.
"We subscribe to the notion that OPEC is the central bank
of oil," Schenker said. "If global growth continues to rise,
even at a decelerated pace, there may very well be a need for
OPEC to raise production quotas."
OPEC Meeting
OPEC said Dec. 11 it will skip a regularly scheduled first-
quarter meeting, a sign that it's ready to let prices climb,
said Lawrence Eagles, head of oil research at JPMorgan Chase &
Co. in New York. Crude will average $93 this year, according to
Eagles, whose 2010 forecast was $78.25.
"At any point, OPEC could bring on extra supply and push
the market down," he said. "We don't think they'll do that."
OPEC'S daily production capacity will shrink by about 1
million barrels to 4.7 million as countries outside the group
struggle to make up the shortfall, according to Clint. Supply
from Russia, the largest non-OPEC producer, will drop 2 percent
this year, while output from Mexico, which provides about 13
percent of U.S. imports, will fall 9 percent, he said.
Shell's earnings per share will rise to $3.71 this year
from $3.03 in 2010, according to the mean of as many as 22
analysts' forecasts compiled by Bloomberg. Exxon's will climb to
$6.55 from $5.92, based on 10 estimates. BP will post earnings
per share of $1.12, compared with a loss of 23.3 cents a year
earlier, according to 18 estimates.
Oil Earnings
Shell, based in The Hague and Europe's biggest oil company,
jumped 15 percent last year in Amsterdam trading. Irving, Texas-
based Exxon, the biggest publicly traded crude producer, rose
7.6 percent in New York. BP, which agreed last year to a payment
of $20 billion for its role in the biggest offshore oil spill in
U.S. history, fell 22 percent in London.
Airline profits will drop a total of $6 billion to $9.1
billion as fuel costs rise and passenger demand wanes, according
to the Montreal-based International Air Transport Association.
Oil consumption will increase by 1.3 million barrels a day,
or 1.5 percent, to a record 88.8 million in 2011, according to
the Paris-based International Energy Agency. Demand will fall
0.7 percent in Europe and be little changed in the U.S. China,
which accounts for 11 percent of the global total, will consume
9.7 million barrels a day this year, 4.8 percent more than last
year, the IEA said Dec. 10.
U.S. demand may also rise this year as the Federal Reserve
purchases $600 billion of Treasuries through the first half of
this year to sustain the recovery, according to JBC Energy, a
Vienna-based consultant.
"The growth story is the primary focus," said Prestige's
Schenker, whose 2010 forecast of $78 was about 2 percent below
the annual average. "If speculative forces push crude markedly
higher, it may be difficult for OPEC quota changes to
significantly impact prices."
For Related News and Information:
News on oil markets: NI OILMARKET <GO>
Top energy, oil stories: ETOP <GO> and OTOP <GO>
News on OPEC: NI OPEC <GO>
OPEC production targets: OPCA <GO>
--With assistance from Rachel Graham in London and Ayesha Daya
in Dubai. Editors: Mike Anderson, Joe Link
To contact the reporters on this story:
Grant Smith in London at +44-20-7330-7353 or
gsmith52@bloomberg.net;
Mark Shenk in New York at +1-212-617-4331 or
mshenk1@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or
sev@bloomberg.net
2011/01/01
Fwd: Australia's Queensland State Delays Budget Update After Damage From Floods
---
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Australia's Queensland Delays Budget Update on Floods (Update2)
2011-01-01 05:54:20.285 GMT
(Updates with size of affected areas in third paragraph.)
By Robert Fenner
Jan. 1 (Bloomberg) -- Queensland will delay its mid-year
budget review as damage from floods inundating Australia's third
most populous state may eclipse last year's record A$800 million
($819 million) spending on natural disasters.
The state's finances will be hit by the cost of rebuilding
roads and infrastructure as well as the loss of income from
mining, agriculture and tourism industries, Treasurer Andrew
Fraser said in a statement today. The review was due in early
January and no new release date has been set.
Queensland accounts for about 20 percent of Australia's
A$1.3 trillion economy, with trade contributing most to the
state's growth in the 12 months ended June 30. Towns have been
evacuated and about half the state, an area the size of France
and Germany combined, has been affected by flood waters.
"In many ways, it is a disaster of biblical proportions,"
Fraser told reporters in flood-hit Bundaberg, about 400
kilometers north of the state capital, Brisbane. "This will be
a double whammy in the cost of infrastructure and also the
downturn in revenue that will come," he said in comments
broadcast on national television.
Weeks of rain destroyed cotton crops, halted coal
deliveries, shut mines and prompted BHP Billiton Ltd., Xstrata
Plc, Rio Tinto Group and Peabody Energy Corp. to declare force
majeure, a legal clause allowing them to miss contracted
deliveries.
Rain Forecast
Australia recorded its wettest September-to-November and
more rain is forecast in the first week of January, forcing
evacuations of flood-stricken towns across Queensland's
hinterland.
More than 200,000 people have had to leave their homes
because of the flooding, with forced evacuations in towns
including Rockhampton, Condamine and Emerald, the Australian
Associated Press reported without saying where it got the
information.
States of disaster have been declared in 41 of Queensland's
73 municipalities covering about a million square kilometers
(366,000 square miles), and flood warnings have been issued for
more than 10 rivers.
State royalty forecasts are "likely to be hit with freight
lines cut and reports that many mines may not reach full
production again for two to three months," Fraser said.
Credit Rating
The higher spending may pose a threat to Fraser's efforts
to regain the AAA credit rating the state lost in 2009.
Queensland has nearly completed A$15 billion of asset sales to
win back the top rating from Standard & Poor's.
"These floods are going to hit the bottom line hard,"
Fraser said.
Flooding may reduce the nation's gross domestic product by
0.25 percent in the fourth quarter, Ivan Colhoun, head of
Australia economics at ANZ Banking Group Ltd. in Sydney, said
earlier this week.
New South Wales and Victoria, the nation's most populous
states, have offered relief personnel to help with the flood
response while Prime Minister Julia Gillard yesterday announced
payments of up to A$1,000 per person for those that have lost
their homes.
For Related News and Information:
Top Stories: TOP<GO>
Top commodity stories: CTOP <GO>
Most read Australian news: MNI AUD <GO>
Most-read natural disaster stories: TNI MOSTREAD NAT <GO>
--Editors: Paul Tighe, Ian Rowley.
To contact the reporter on this story:
Robert Fenner at +61-3-9228-8705 or
rfenner@bloomberg.net
To contact the editor responsible for this story:
Paul Tighe in Sydney at +612-9777-8626 or
ptighe@bloomberg.net
Sent From Bloomberg Mobile MSG
+------------------------------------------------------------------------------+
Australia's Queensland Delays Budget Update on Floods (Update2)
2011-01-01 05:54:20.285 GMT
(Updates with size of affected areas in third paragraph.)
By Robert Fenner
Jan. 1 (Bloomberg) -- Queensland will delay its mid-year
budget review as damage from floods inundating Australia's third
most populous state may eclipse last year's record A$800 million
($819 million) spending on natural disasters.
The state's finances will be hit by the cost of rebuilding
roads and infrastructure as well as the loss of income from
mining, agriculture and tourism industries, Treasurer Andrew
Fraser said in a statement today. The review was due in early
January and no new release date has been set.
Queensland accounts for about 20 percent of Australia's
A$1.3 trillion economy, with trade contributing most to the
state's growth in the 12 months ended June 30. Towns have been
evacuated and about half the state, an area the size of France
and Germany combined, has been affected by flood waters.
"In many ways, it is a disaster of biblical proportions,"
Fraser told reporters in flood-hit Bundaberg, about 400
kilometers north of the state capital, Brisbane. "This will be
a double whammy in the cost of infrastructure and also the
downturn in revenue that will come," he said in comments
broadcast on national television.
Weeks of rain destroyed cotton crops, halted coal
deliveries, shut mines and prompted BHP Billiton Ltd., Xstrata
Plc, Rio Tinto Group and Peabody Energy Corp. to declare force
majeure, a legal clause allowing them to miss contracted
deliveries.
Rain Forecast
Australia recorded its wettest September-to-November and
more rain is forecast in the first week of January, forcing
evacuations of flood-stricken towns across Queensland's
hinterland.
More than 200,000 people have had to leave their homes
because of the flooding, with forced evacuations in towns
including Rockhampton, Condamine and Emerald, the Australian
Associated Press reported without saying where it got the
information.
States of disaster have been declared in 41 of Queensland's
73 municipalities covering about a million square kilometers
(366,000 square miles), and flood warnings have been issued for
more than 10 rivers.
State royalty forecasts are "likely to be hit with freight
lines cut and reports that many mines may not reach full
production again for two to three months," Fraser said.
Credit Rating
The higher spending may pose a threat to Fraser's efforts
to regain the AAA credit rating the state lost in 2009.
Queensland has nearly completed A$15 billion of asset sales to
win back the top rating from Standard & Poor's.
"These floods are going to hit the bottom line hard,"
Fraser said.
Flooding may reduce the nation's gross domestic product by
0.25 percent in the fourth quarter, Ivan Colhoun, head of
Australia economics at ANZ Banking Group Ltd. in Sydney, said
earlier this week.
New South Wales and Victoria, the nation's most populous
states, have offered relief personnel to help with the flood
response while Prime Minister Julia Gillard yesterday announced
payments of up to A$1,000 per person for those that have lost
their homes.
For Related News and Information:
Top Stories: TOP<GO>
Top commodity stories: CTOP <GO>
Most read Australian news: MNI AUD <GO>
Most-read natural disaster stories: TNI MOSTREAD NAT <GO>
--Editors: Paul Tighe, Ian Rowley.
To contact the reporter on this story:
Robert Fenner at +61-3-9228-8705 or
rfenner@bloomberg.net
To contact the editor responsible for this story:
Paul Tighe in Sydney at +612-9777-8626 or
ptighe@bloomberg.net
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