UK coal consumption and imports drop sharply in Q1 ‘14

The UK’s consumption of thermal coal for electricity generation fell 18% to 13m tonnes in Q1 ’14, compared to the same period last year, reflecting both a switch away from coal and lower overall generation, the Department of Energy and Climate Change (DECC) said.

Thermal coal imports fell 6.5% year on year to 10.2m tonnes in Q1 ‘14 with the majority of supply coming from just three countries, DECC said.

Despite ongoing concerns that geopolitical tensions between Russia and Ukraine would restrict the flow of Russian coal into Europe, 51% or 5.2m tonnes of UK’s total steam coal imports during the first quarter came from Russia. This was up 21% compared to tonnes imported from Russia in the same period last year.

Both Colombia and US contributed 23% (2.3m tonnes) of total steam coal imports each in the first three months of the year. Imports from America fell 21% year on year, while imports from Colombia fell 21% yea on year. The drop in supply from US and Colombia is likely the result of the cold winter in the US at the beginning of the year, which increased US domestic coal consumption and diverted some of the Colombian coal, which would traditionally be sold to Europe, into the US.

Lacklustre demand for coal has reduced consumption levels by power stations and stock levels have risen. The level of coal stocks at UK power stations stood at 10.6m tonnes at the end of Q1 ‘14, 2.5m tonnes higher than at the end of March 2013, DECC said.

However, National Grid data collected by ICIS at 4pm each working day shows that coal-fired generation held an average 39.1% share in UK power generation mix in the first three months of 2014 compared to natural gas which held an average 22.4% share. This was largely unchanged from the first three months of 2013, when coal-fired power plants produced an average 43.5% of the overall daily power generation, while gas-fired power generation held an average 26.4% stake. However, National Grid data also shows that the average working day production by coal-fired units in Q4 ‘14 was 372.6GWh, 20% below the 448.5GWh average production during the same period last year. Stacy Irish