Global steam coal supply costs in the face of Chinese infrastructure investment decisions

In this work we demonstrate the effects of different Chinese transport infrastructure investment strategies on long run marginal costs of steam coal supply in Europe. Increasing Chinese demand for steam coal will lead to a growing need for additional domestic infrastructure in China as production hubs and demand centers are spatially separated. If domestic transport capacity is only available at elevated costs, Chinese power generators could turn to the global trade markets and increase steam coal imports. Increased Chinese imports could significantly influence global trade market price levels which would especially affect nations mainly relying on imports, like for example Europe. We analyze the scope of this effect under different assumptions for Chinese transport infrastructure developments. For this purpose, we develop a spatial equilibrium model for the global steam coal market. For our assumption regarding production and transport cost evolutions, we rely on an input factor-based cost calculation methodology. We found out that the investigated Chinese infrastructure decisions have a modest impact on long run marginal costs of supply for Europe and the US but significant effects for China.Steam coal; MCP; non-linear optimization; China; Europe; transport infrastructure

Have Prices of Internationally Traded Steam Coal been Marginal Cost Based?

During 2007 and 2008 steam coal prices soared to unprecedented levels. Since then much has been speculated about the drivers of these price peaks. This paper is concerned with the costs of steam coal allocation in the seaborne market and their influence on the price equilibrium. It presents an optimisation model that differentiates between mining technologies and therefore allows to analyse the effects of input price escalation on marginal costs in detail. Since 2005 input prices of commodities used in coal mining and bulk carrier freight rates increased significantly, causing marginal costs to rise. However, this affected suppliers along the global supply curve differently. We find that low-cost intramarginal suppliers experienced higher cost increases than marginal suppliers due to the different production technologies applied. Based on our results we conclude that prices of internationally traded steam coal are generally marginal cost based. However, the all time price spike of 2008 was not caused by cost escalation. We suppose that short-run capacity scarcity was responsible for the soaring prices in this year. Hence, marginal costs are a major determinant of the price equilibrium in the seaborne steam coal market given that capacity is not scarce.Steam coal; Marginal Costs; Mining Technologies; Cost Escalation; Price Peak

Market Structure Scenarios in International Steam Coal Trade

The seaborne steam coal market changed in recent years. Trade volumes grew dynamically, important players emerged and since 2007 prices increased significantly and remained relatively high since then. In this paper we analyse market equilibria in the years 2006 and 2008 by testing for two possible market structure scenarios in this market: perfect competition and an oligopoly setup with major exporters competing in quantities. We conclude from our results that international steam coal trade is not perfectly competitive as there is a large spread between marginal costs and prices and a low capacity utilisation in 2008. Further, trade flows are generally more diversified in reality than in the competitive scenario. However, also the Cournot scenarios fail to accurately explain real market outcomes. We conclude that only more sophisticated models of strategic behaviour can predict market equilibria in international steam coal trade.Steam coal trade; Mining Costs; Market Structure

The Economics of International Coal Markets

In the scope of four related essays this thesis analyses the Chinese domestic coal sector and coal trade policies and their respective impact on international steam coal trade economics. In particular, the thesis investigates the role of domestic transport infrastructure investment policies as well as Chinese coal export and import controls and the potential exertion of market power through such trade instruments. For this purpose, several spatial equilibrium models have been developed that enable simulation runs to compare different policy scenarios. These models also permit ex-post analyses to empirically test hypotheses of non-competitive market conduct of individual players under the assumption of Cournot behaviour. These model-based analyses yield, among others, the following findings: If coal is converted into electricity early in the Chinese energy supply chain, worldwide marginal costs of supply are substantially lower than if coal is transported via railway. This can reduce China's dependence on international imports significantly. Allocation of welfare changes, particularly in favour of Chinese consumers while rents of international producers decrease. If not only seaborne trade but also interactions and feedbacks between domestic coal markets and international trade markets are accounted for, trade volumes and prices of a China - Indonesia duopoly fit the real market outcome best in 2008. Real Chinese export quotas have been consistent with simulated exports under a Cournot-Nash strategy. Uncertainties with regard to future Chinese coal demand and coal sector policies generate significant costs for international investors and lead to a spatial and temporal reallocation of mining and infrastructure investments. The potential exertion of Chinese demand side market power would further reduce the overall investment activity of exporters

A methodology to estimate security of supply in electricity generation: results for Germany until 2030 given a high level of intermittent electricity feed-in

In this paper, we develop a methodology for deriving a consistent measure for supply adequacy in the power generation sector. We especially consider the secured generation capacity of intermittent renewable energy sources such as wind. Availability of conventional power plants is estimated through stochastic convolution of unscheduled non-usabilities. We employ our methodology to measure supply security in Germany until 2030. A detailed market analysis of power plants that are currently being built or planned provides support to our analysis for the short term. For the long term, we rely on a large-scale dispatch and investment model of the European power sector to account for the embedding of the German electricity sector in the European market. We analyze two scenarios: one with prolongation of nuclear power plants and one with a nuclear phase-out. Our results show that, even though intermittent renewables only provide very limited secured generation capacity, security of electricity supply in Germany can be assured until 2015. In the long term, the need for backup capacity for renewable energy sources increases as well as the need for electricity imports.Supply adequacy; integration of renewable energy sources; power generation; German power sector; secured generation capacity

Nations as Strategic Players in Global Commodity Markets: Evidence from World Coal Trade

We explore the hypothesis that export policies and trade patterns of national players in the steam coal market are consistent with non-competitive market behavior. We test this hypothesis by developing an equilibrium model which is able to model coal producing nations as strategic players. We explicitly account for integrated seaborne trade and domestic markets. The global steam coal market is simulated under several imperfect market structure setups. We find that trade and prices of a China - Indonesia duopoly fit the real market outcome best and that real Chinese export quotas in 2008 were consistent with simulated exports under a Cournot-Nash strategy.Strategic National Trade; Imperfect Competition; Steam Coal; China; Indonesia

Das Ende der alten Kölner Universität im Spiegel ausgewählter zeitgenössischer Quellen

Die vorliegende Masterarbeit spürt der Frage nach, inwiefern sich in zeitgenössischen Quellen Reaktionen auf die durch französische Behörden angeordnete Schließung der alten Kölner Universität im Jahre 1798 finden lassen. Hierfür wurden in einem Zeitraum von etwa 24 Jahren (1794-1818) verschiedene Quellen(-arten) ausgewählt und ausgewertet. Da die alte Kölner Universität im genannten Zeitraum jedoch komplexe Entwicklungen durchlief, werden nicht einfach Quellenauswertungen vorgetragen, sondern die Geschichte der alten Kölner Universität wird zum besseren Leseverständnis rekonstruiert und Erkenntnisse aus Quellenanalysen an passenden Stellen eingebunden. Innerhalb jenes Vorgehens werden konkret die Fragen beantwortet, ob es für das Universitätsende eine (inter-)nationale Medienaufmerksamkeit gegeben hat und ob sich vom Kölner Standpunkt aus Reaktionen auf und/oder Bewertungen desselben finden lassen. Als wichtige Erkenntnis des Forschungsvorhabens hat sich zunächst gezeigt, dass es angemessen erscheint, das Ende der alten Kölner Universität nicht als Zeitpunkt, sondern als Prozess zu begreifen, der sich über verschiedene Stationen vollzieht. Entsprechend galt es, an verschiedenen Stellen die zugänglichen Quellen zur Beantwortung der beiden formulierten Fragestellungen zu prüfen. Mit Blick auf die Medienaufmerksamkeit konnte festgestellt werden, dass in puncto Universitätsende eher ein Trend zur medialen Nicht-Berichterstattung zu erkennen ist. Zur Bewertung des Endes der alten Kölner Universität durch die Kölner lässt sich feststellen, dass die Bewohner der Domstadt, wie beispielsweise Ferdinand Franz Wallraf, jenes im Verlauf des Betrachtungszeitraums in zunehmendem Maße als Verlust empfunden zu haben scheinen. Eine Leseempfehlung kann aufgrund der getroffenen Maßnahmen in Bezug auf das Leseverständnis nicht nur an das universitäre Fachpublikum, sondern auch an interessierte Laien ausgesprochen werden. Abseits des Feldes der Kölner Universitätsgeschichte berührt die Arbeit Stadt-, Regional- sowie Mediengeschichte und besitzt methodischen Bezug zu Spiegelstudien, weshalb sie auch für in diesen Bereichen Interessierte eine lohnende Lektüre sein könnte

Scenarios for an Energy Policy Concept of the German Government

In this working paper we demonstrate how challenging greenhouse gas reduction targets of up to 95% until 2050 can be achieved in the German electricity sector. In the analysis, we focus on the main requirements to reach such challenging targets. To account for interdependencies between the electricity market and the rest of the economy, different models were used to account for feedback loops with all other sectors. We include scenarios with different runtimes and retrofit costs for existing nuclear plants to determine the effects of a prolongation of nuclear power plants in Germany. Key findings for the electricity sector include the importance of a European-wide coordinated electricity grid extension and the exploitation of regional comparative cost effects for renewable sites. Due to political restrictions, nuclear energy will not be available in Germany in 2050. However, the nuclear life time extension has a positive impact on end consumer electricity prices as well as economic growth in the medium term, if retrofit costs do not exceed certain limits.Roadmap 2050; GHG reduction; renewable energies; carbon capture and storage; power plant fleet optimization