First Germany, now Britain has announced that it is opening a new coal mine, this one for steel production. In Germany’s case, the coal is for electricity production. During the U.N. Conference of the Parties meeting in Egypt (COP27), several African nations alluded to the hypocrisy of Europe using coal and natural gas whenever they want or need it, but denying African countries that same right to secure, reliable and firm energy. Europe wants Africa to use wind and solar power despite their intermittency issues and the fact that Africa has hydrocarbon resources of its own to mine or drill that Europe wants and has been buying due to Russia’s reduced energy supplies.
Britain’s Coal Mine
Britain approved its first new deep coal mine in decades to produce coal, rather than importing it, for use in steelmaking, despite the country’s climate targets. Britain passed legislation requiring it to bring all of its greenhouse gas emissions to net zero by 2050, the same goal President Biden has established for the United States. The Woodhouse Colliery, to be developed by West Cumbria Mining in northwest England, is to produce coking coal and is expected to create around 500 jobs. The majority of the coal produced is expected to be exported to Europe. After five years, more than 80 percent of the coal the mine will produce annually is forecast to be sent to an export terminal on England’s east coast, according to planning documents.
The coal mine, which is the size of roughly 60 soccer fields or 23 hectares, would take two years to build at a cost estimated in 2019 of 165 million pounds ($201 million). The mine is proposed to be operated for 50 years and expects to be net zero carbon in its operations. It will supply steelmakers in Britain and Western Europe and employ just over 500 workers when it reaches peak production after five years, with more than 80 percent of them expected to work underground in coal mining.
Britain was at one time the cradle of the Industrial Revolution, at one time employing 1.2 million people at nearly 3,000 collieries before its last deep-pit mine closed in 2015. The Industrial Revolution was actually the transition to dense (hydrocarbon) energy beginning with coal, which made the nation the workshop of the world, just as it did the United States and more recently, China.
Germany’s New Coal Mine
Germany is demolishing a wind farm to make way for a new open-pit coal mine. One of the farm’s wind turbines was taken down in October, and two others are expected to be taken down next year, with all eight being dismantled by the end of 2023. The turbines were constructed more than 20 years ago and are considerably less efficient than their newer models, as well as being in the way of the coal resource.
German utility, RWE, made the decision to expand into the Keyenberg wind farm, which is located in North Rhine-Westphalia. The expansion comes in tandem with a plan to temporarily return three of RWE’s lignite-fired coal units to the market, a decision that was approved by Germany’s cabinet. The units were previously on standby. The three lignite units each have a capacity of 300 megawatts. They will contribute to strengthening the security of supply in Germany and will displace natural gas used to generate electricity. Originally, it was planned that the three reserve power plant units would be permanently shut down on September 30, 2022, and September 30, 2023, respectively. The expansion of coal mining in Germany is due to the current energy crisis stemming from reduced Russian energy supply due to Western sanctions on Russia for its invasion of Ukraine, which exacerbated an ongoing increase in prices owing to their increased reliance on intermittent electricity sources.
Europe Imports Coal to Get Through This Winter
The European Union’s ban on Russian coal imports has increased pressure on electricity generators to find alternative sources of fuel. Russia had provided about 70 percent of the EU’s thermal coal before the ban. Australia, a major coal producer, shipped 2.9 million metric tons of coal to Europe through July of this year, 73 percent more than the entire 2021 year. Front-month thermal coal at Australia’s Newcastle port – a global benchmark – traded at $429 a metric ton on September 16, just below an all-time high of $483.50 in March and up from around $176 per metric ton last year. Buyers in Europe are paying top dollar for coal from often remote mines in Tanzania, Botswana and potentially Madagascar. In Germany, coal was the largest source of electricity generation in the first half of 2022, producing 29.4 percent of its power, which is higher than coal’s contribution to U.S. generation.
Since November of last year, when Mtwara, the port in Tanzania, launched its first coal shipment, the port has loaded 13 vessels with coal trucked 600 kilometers from mines in the Southwest. Recently, a bulk carrier with a 34,529-metric-ton capacity sailed from the port to France loaded with coal. Since the end of June, 57 cargo orders for available vessels to ship Tanzanian coal have been seen on the spot freight market compared with just two in the same period last year. Tanzania expects coal exports to double this year to 696,773 metric tons, and its coal production to increase by 50 percent to 1,364,707 metric tons. Tanzania-based miner Ruvuma Coal exported coal to the Netherlands, France and India since November. The distance from Mtwara to Rotterdam is over 7500 nautical miles. Prior to the escalating prices, Tanzania only exported coal to neighboring countries.
Europe is being hypocritical with its energy demands and blaming the Russia-Ukraine War for it. While it closed coal mines and was shuttering coal generators, it reverted back as soon as supplies from Russia were drastically reduced as Russia is using energy as a weapon against Western sanctions. Further, Europe’s wind resources did not live up to expectations with reduced generation due to lower wind speeds. While the International Energy Agency is pushing for faster wind and solar deployment, Europeans now recognize the need for firm energy that can generate power 24/7. But, it may be too late as industries are leaving Europe because of its high energy prices, and some are predicting the rapid deindustrialization of Europe. Airbus recently warned that European aerospace suppliers are starting to move out of Europe to escape surging energy costs and urged governments to provide tax breaks to halt the flow.
The hypocrisy is that Europe won’t admit the true reasons behind the energy crisis that started decades ago with its movement away from hydrocarbons and to renewable energy in pursuit of their climate change goals. Further, it is telling developing countries they must just use wind and solar power. Unfortunately, President Biden is going down Europe’s path in his energy transition to renewable energy. He should be looking at what is occurring carefully before pushing intermittent resources on Americans that will result in higher costs and an exodus of U.S. industry.