Page 11 - AsiaElec Week 01 2021

AsiaElec NEWS IN BRIEF AsiaElec

“We will establish a stable supply of
energy by thoroughly conserving energy and
introducing renewable energies to the greatest
possible extent, as well as by advancing
our nuclear energy policy with the highest
priority on safety,” Suga said in October when
announcing the 2050 carbon neutral target.
“Nuclear power can contribute to supply
stability and economic efficiency, which are
important for decarbonisation of the energy
system. The nuclear industry will strive to
continuously improve the safety and stable
operation of nuclear power generation,” Japan
Atomic Industrial Forum president Shiro Arai
said in response to Suga’s declaration.
While nuclear advocates say the
introduction of new technologies will make
plants more efficient and ensure a steady Electricity Council – a big industry group of increasing pressure this winter, as it remains
— and cheap — supply of electricity in China’s electricity producers – on Wednesday difficult for main production areas to boost
the decades to come, the industry faces a stopped updating the widely cited China output, while coal inventory in northern areas
mountain of problems and questions. Electricity Coal Index (CECI), citing “surging is dwindling, with a particular shortage of
While the government’s official policy is to spot prices” and “chaotic pricing”, according to high-quality, low-sulfur coal.
restart as many nuclear reactors as possible, a public announcement.
doing that could prove difficult for four The same day, the China Coal
basic reasons: the need for safety upgrades, Transportation and Distribution Association
aging reactors that face decommissioning, (CCTD), another influential industry group, RATINGS
the storage of nuclear waste and growing also halted publishing its Bohai Rim port
expectations for renewable energy. How these area’s spot price for thermal coal – a measure Fitch assigns EGAT BBB+
specific issues are addressed in the coming of coal prices in northern Chinese ports
years will impact nuclear power’s share in the – because of “volatile and abnormal price rating
electricity mix, and the larger effort to reach fluctuations in the market”, it said in a notice.
carbon neutrality, by 2050. It had also delayed updating the price earlier Fitch Ratings has assigned Electricity
in the month, on December 3, because of Generating Authority of Thailand (EGAT) a
soaring prices. Long-Term Foreign-Currency Issuer Default
Before the December 30 data freeze, Rating (IDR) of ‘BBB+’ with a Stable Outlook.
COAL CECI’s spot price for 5,500 kcal/kg thermal The agency has also assigned EGAT a senior
coal rose to 751 yuan ($115.50) per tonne, and unsecured rating of ‘BBB+’.
Chinese coal prices surge CCTD’s spot price for 5,500 kcal/kg thermal Profile (SCP) of ‘bbb+’, which is at the same
EGAT’s ratings reflect its Standalone Credit
coal price surged to 706 yuan per tonne.
All four of China’s major coal-price Both prices were record highs for 2020. The level as that of the Thai sovereign (BBB+/
indices have stopped being updated after a prices fluctuate depending on the source. The Stable). Fitch’s Government-Related Entities
concurrence of factors sent the price of coal National Bureau of Statistics said the price (GRE) Rating Criteria equalises EGAT’s
surging in recent weeks – signalling that of 5,500 kcal/kg Shanxi high-quality thermal ratings with that of the sovereign in the case
the government has stepped in to cool the coal rose to 699 yuan per tonne last month. of any weakening in the SCP, provided the
overheated coal market. The pricing freeze-outs by those two major likelihood of the state’s support remains intact.
The factors said to be responsible for the benchmark indices in China’s coal market EGAT’s SCP benefits from the group’s
soaring prices include China’s booming post- followed the pricing suspensions of two daily dominant market position, stable supportive
coronavirus industrial recovery, the annual and weekly price indices by other companies regulatory framework with a long record, and
sharp uptick in demand for coal to provide in early December. solid financial profile. Thailand’s electricity
heat during the cold winter months, and an “The coal market has been severely regulator reviews the power tariff every
ongoing crackdown on illegal mines. Other distorted by speculation in the spot and four months to adjust for uncontrollable
factors at play include problems arising as futures markets, threatening the supply and expenses. The regulator has largely allowed
local governments implement rules designed price control of thermal coal,” the China costs to pass through for more than 15 years
to curb pollution, and Beijing’s restrictions Electricity Council said in a statement albeit with some delays. EGAT’s strong
placed on coal imports, according to analysts. after halting its index. “During this special financial profile provides a buffer against
The rare pricing freeze-out makes it more period, the governments needs to further these temporary delays, in our view. EGAT’s
difficult for traders and analysts to predict adopt special and comprehensive measures SCP can be revised up if the regulator
market prices, but some say the trend of high to increase coal supply and crack down on demonstrates a record of timely pass-through
prices shows no sign of abating in the short market speculation, to ensure the supply of of uncontrollable costs on a sustained basis.
term, while coal supplies continue to dwindle thermal coal, stabilise prices, and guide the
at an alarming rate. market to return to a reasonable range as soon
With coal prices having surged by more as possible.”
than 10 per cent in December, the China It added that the coal supply still faces

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