Friday, December 11, 2015

This Probably Says It All About Great Britain And Energy -- December 11, 2015

This story was also published in The Wall Street Journal

Financial Times is reporting that UK's last deep mine set for closure
Cheap imports have hastened coal’s long demise, said Shaun McLoughlin, the mine manager. It costs £43 a tonne to get coal out of Kellingley, North Yorkshire. The world price is £30. The US power sector is switching from coal to cheap shale gas, leading to a glut. Russia and Colombia have far lower operating costs.

Mr McLoughlin said: “Two-and-a-half years ago everything was looking rosy. The bottom has fallen out of the market very quickly. The world is saturated with cheap coal.”

Deep mines in the UK produced about 3.5m tonnes in 2014. Imports were 41.8m tonnes, almost 80 per cent of the total supply.

What is more, demand is dropping in the UK as the government shifts to greener energy. Generators pay more in tax to burn a tonne of coal than they pay for the fuel itself, which generated 29 per cent of the country’s electricity last year.

The nearby Eggborough and Ferrybridge power stations that use Kellingley’s coal are closing too.

Amber Rudd, energy secretary, has favoured subsidies for gas to replace coal by 2025, saying to rely on the “polluting” fuel was perverse.
 Many, many story lines.

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