Report: Coal production to fall in Germany as it pursues green alternatives

Coal production in Germany is predicted to drop to 172.6 million tonnes (Mt) by 2020 due to the country’s transition to more renewable energy sources, says a report by Timetric.

Entitled ‘Coal Mining in Germany to 2020‘, the report highlights that German authorities intend to reduce CO2 emissions by 40% by 2020 by replacing coal with renewable energy sources. Germany was the eighth biggest coal producer worldwide in 2014 with 185.8Mt of coal production. The country had 4.5% of the total global reserves and sixth-biggest proven coal reserves in 2014 at 40.5 billion tonnes (Bt).

Germany’s power generation sector accounted for 86.3% of the total coal consumption (234.6Mt) in 2014. Changing times combined with the government’s energy transition policy resulted in a slight increase in the share of renewable sources over lignite for the first time in 2014. Renewable sources accounted for 25.7% in the power generation mix, while lignite’s share was slightly lower at 25.6%.

The shutting down of domestic mines such as Lippe, Lohberg and Walsum in North Rhine-Westphalia and Bergheim in Baden-Wurttemberg led to a 12.8% increase in the coal imports in 2014 to 57.1Mt. The key suppliers were Russia, the US and Colombia, which contributed 55.6% to the total coal imports in 2014.

The Timetric report mentions that lignite is the widely produced variety of coal used in the German power generation industry.

The key firms in the country’s coal mining industry are RWE Power AG, Vattenfall GmbH and RAG AG. The Federal Ministry of Economics and Technology (FMET) and the Federal Institute for Geosciences and Natural Resources (BGR) oversee the workings of the mining industry in Germany.
Markets, said that the outlook for the industry was gloomy. The expert says that the situation is expected to be tougher and tougher urging for more infrastructure investment and the starting of mining capital expenditure to salvage the problem. However, the construction industry in South Africa has in recent times experienced difficult times thanks to hard economic times in the country. Construction companies in South Africa have been cutting jobs and battling depressed order books as the government reduced large- scale civil engineering and construction contracts that the big companies rely on.
South Africa’s economy is struggling in the wake of power outages, a severe drought as well as the effects of plunging commodity prices. Finance Minister Pravin Gordhan last month predicted growth would be 0.9 percent this year, the slowest since a 2009 recession. Late last year, the firms including Murray and Roberts and WBHO announced that they were restructuring to adopt with the prevailing environment. But despite the mechanisms being put in place to cushion the firms against the difficult economic situation, it seems the problem is getting out of hand. WBHO Chief Executive Officer Louwtjie Nel says that from where they sit the situation is bound to continue for a long period of time. “We can’t see it getting better in the short term. We think
we’re going to be under pressure for another year or so, so we’ve just got to keep our heads down and do good projects,” he added.

His opinion has been echoed by analysts who reckon that the construction industry in South Africa will continue to face difficult times despite the restructuring effort.Roelof Brand, a Cape Town-based analyst at Avior Capital Markets, said that the outlook for the industry was gloomy. The expert says that the situation is expected to be tougher and tougher urging for more infrastructure
investment and the starting of mining capital expenditure to salvage the problem.South Africa’s economy is struggling in the wake of power outages, a severe drought as well as the effects of plunging commodity prices. Finance Minister Pravin Gordhan last month predicted growth would be 0.9 percent this year, the slowest since a 2009 recession.

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