The Americas

Compared with European and Asian coal markets, imports of coal to North and South America are relatively small, amounting to only 50 million tons in 1997 (Table 15). Brazil imported 34 percent of the 1997 total, followed by Canada (30 percent) and the United States (15 percent) [13. p. I.128]. Almost all (91 percent) of the imports to Brazil were coking coal [13, p. III.13].

Over the forecast period, coal imports to the Americas increase by 13 million tons, with most of the additional tonnage going to Brazil and Mexico, both of which are expected to import additional amounts of coal for use at integrated steel plants [56, 72, 73]. Coal imports to the Brazilian steel industry are projected to rise substantially as the result of strong growth in domestic steel demand and a continuing switch from charcoal to coal coke. In addition to coking coal, Mexico is projected to import additional quantities of steam coal for electricity generation. Additional imports of coal to the Americas are projected to be met primarily by producers in Colombia, Venezuela, and Australia.

Coking Coal

Historically, coking coal has dominated world coal trade, but its share has steadily declined, from 55 percent in 1980 to 40 percent in 1997 [74]. In the forecast, its share of world coal trade continues to shrink, falling to 34 percent by 2020. In absolute terms, despite a projected decline in imports by the industrialized countries, total world coking coal trade is projected to show a slight increase over the forecast period as the result of increased demand for steel in the developing countries. Increased imports of coking coal are projected for South Korea, Taiwan, India, Brazil, and Mexico, where expansions in blast-furnace-based steel production are expected.

Factors that contribute to the decline in coking coal imports in the industrialized countries are continuing increases in steel production from electric arc furnaces (which do not use coal coke as an input) and technological improvements at blast furnaces, including greater use of pulverized coal injection equipment and higher average injection rates per ton of hot metal produced. One ton of pulverized coal (categorized as steam coal) used in steel production displaces approximately 1.4 tons of coking coal (75, 76]. In 1996, the direct use of pulverized coal at blast furnaces accounted for 13 percent of the coal consumed for steelmaking in Japan and the European Union [13, Tables 3.9 and 3.10; 27]. References

1. Energy Information Administration, Impacts of the Kyoto Protocol on U.S. Energy Markets and Economic Activity, SR/OIAF/98-03 (Washington, DC, October 1998).

2. K. Fujime. "Japan's Latest Long-Term Energy Supply and Demand Outlook From Kyoto Protocol's Perspectives," Energy in Japan, No. 153 (September 1998), pp. 1-9.

3. "Asia's Crisis and Coal." Coal Trans International, Vol. 13, No. 3 (June 1998). p. 1.

4. "Pollution Control in Southeast Asia: But Utilities Sull Need Coal," Coal Trans International, Vol. 13, No. 3 (June 1998), pp. 46-50.

5. "Violence Erupts at Coal Plant Site," Financial Times: Power in Asia, Issue No. 266-67 (December 11, 1998). Pp. 19-20.

6. U.S. Environmental Protection Agency, National Air Quality and Emissions Trends Report, 1996, EPA Document Number 454/R-97-013 (Washington, DC, January 1998), Tables A-6 and A-8.

7. K. Capoor and A.M. Deutz, “China Acts on Pollutants," Climate Negotiations Geneva July '96 NGO Newsletter, Vol. 2 (July 10, 1996). p. 4.

8. U.S. Department of Energy. Lawrence Berkeley National Laboratory, China Energy Databook, LBL32822 Rev. 4 UC-900 (Berkeley, CA, September 1996).

9. T.M. Johnson, F. Liu, and R. Newfarmer, Clear Water, Blue Skies: China's Environment in the New Century. World Bank No. 14044 (Washington, DC, September 1997).

10. BBC News, "World: Asia-Pacific Anti-Pollution Purge for Beijing," web site news.bbc.co.uk (December 18, 1998).

11. Energy Information Administration, Emissions of Greenhouse Gases in the United States 1997, DOE/EIA-0573(97) (Washington, DC, October

1998).

12. Energy Information Administration, International Energy Annual 1996, DOE/EIA-0219(96) (Washington, DC, February 1998)>

13. International Energy Agency. Coal Information 1997 (Paris, France, September 1998).

14. The Tex Report, No. 7150 (August 31, 1998).

15. "CoalTrans Asia Opens with Local Coal Markets Uncertain," Coal Trans International, Vol. 13, No. 3 June 1998), pp. 28-32.

16. "PLN Sets 5 Cents/KWH as Top PPA Tariff," Financial Times: Power in Asia, Issue No. 261 (October 5, 1998), pp. 18-19.

17. "Malaysia's Tenaga Seeks to Renegotiate Power Agreements," Asia Pulse (August 11, 1998).

18. The Pacific Market for CoalTrans Asia Amidst the Region's 'Crisis'," Coal Trans International, Vol. 13, No. 4 (August 1998), pp. 34-37.

19. "Asian Coal Requirements Continue Amidst the Chaos, Coal Trans international, Vol. 13, No. 4 (August 1998), pp. 20-25.

20. "MITI's New Ten-Year Plan Calls for the Development of 11.3 Mil. kW Nuclear Power To Raise Its Generating Capacity to 56.2 Mil. kW by End of FY2007. JPET (May 1998), pp. 2-9.

21. "Eastern Germany Undergoes Swift Conversion to Natural Gas," Gas World International, Vol. 199, No. 4915 (June 1995), p. 36.

22. Directorate-General XVII-Energy, European Commission, The Market for Solid Fuels in the Community in 1996 and the Outlook for 1997, Sec (1997)1093, web site www.europa.eu.int (Brussels, Belgium, June 6,

1997).

23. International Energy Agency, Coal Information 1994 (Paris, France, 1995).

.24. UK Department of Trade and Industry, Conclusions of the Review of Energy Sources for Power Generation, and Government Response to Fourth and Fifth Reports of the Trade and Industry Committee Energy Review White Paper, CM 4071 (London, United Kingdom, October 1998).

25. "Gas Halt Fails to Quell Mine Job Fears," BBC News, web site news.bbc.co.uk (December 4, 1997).

26. "Gas Power Stations Halted to Help Coal Industry," BBC News, web site news.bbc.co.uk (December 3, 1997).

27. Directorate-General XVII-Energy, European Commission, The Market for Solid Fuels in the Community in 1997 and the Outlook for 1998, Sec(1998)2143 (Brussels, Belgium, December 16, 1998).

28. "Nordic Coal Clashes with Green Policy," World Coal (December 1997), pp. 28-31.

29. "Supply Contracts for Italy Prompt Expansions, New Construction Plans," Oil & Gas Journal (February 23, 1998)..

30. "EU Agrees on Burden-Sharing of Greenhouse Gas Cuts," Kyodo News Service/Associated Press, web site cnnfn.news-real.com (June 18, 1998).

31. United Nations, Framework Convention on Climate Change, Report of the Conference of Parties on Its Third Session, Held at Kyoto from 1 to 10 December 1997, Kyoto Protocol to the United Nations Framework Convention on Climate Change, FCCC/CP/1997/L.7/ Add.1, web site www.unfccc.de (December 10, 1997).

32. J. Chadwick, "CIS Coal," Mining Journal (June 1998). 33. M. Wines, "A Russian Coal-Mine Region Producing Little But Misery, New York Times (September 17, 1998).

34. "Ukraine: The Pits," The Economist (June 13, 1998). 35. "Russia To Suspend Coal Industry Privatization," BBC Monitoring Newsfile, web site confn.news-real. com (November 27, 1998).

36. World Bank Project Information Document, "Ukraine-Coal Sector Adjustment Loan," web site www.worldbank.org (Washington, DC, February 12, 1998).

37. "World Bank Ties Loan to Outcome of IMF Talks-Russian Energy Minister," BBC Monitoring Former Soviet Union-Political, web site cnnfn. news-real.com (December 7, 1998).

38. "World Bank to Revise Loan Terms with Russia" Interfax Russian News (December 1, 1998).

39. A. Kudat, World Bank Social Assessment Case Study, "Russia Coal Sector Restructuring," web site www.worldbank.org (Washington, DC, February 20, 1998).

40. R.M. Levine, "Mining Annual Review: Russia Mining Journal (September 1997).

41. Simpson Spence and Young Consultancy and Research, Ltd., Coal Trade Matrix 1997 (London, UK. October 19, 1998).

42. "New Program for Restructuring the Polish Coal-Mining Industry: Already Dead on Arrival" PlanEcon Energy Service, FAX Alert No. 8 (April 28, 1998).

43. "Parliament Chamber Approves Coal Mining Restructuring Plan," Associated Press, web site cnnfn.news-real.com (November 26, 1998).

44. World Bank, "Country Brief: Poland," web site www.worldbank.org (August 1998).

45. Energy Information Administration, Annual Energy Outlook 1999, DOE/EIA-0383(99) (Washington, DC. December 1998), Table A8.

46. Natural Resources Canada, Canada's Energy Outlook 1996-2020, web site www.nrcan.gc.ca (April 1997). pp. 48-50.

47. H. Schneider, "Ontario to Split Power Company in Effort to Spur Competition, Exports, Washington Post (November 7, 1997).

48. Natural Resources Canada, Canada's Emissions Outlook: An "Events-Based" Update for 2010 (Working Paper), web site www.nrcan.gc.ca/es/ceo/ceo2010.pdf (October 1998).

49. F.G. Jáuregui D., Fuels Purchasing Manager, Comisión Federal de Electricidad, "Steam Coal Requirements of CFE." paper presented at the Western Coal Council's Pacific Coal Forum (Park City. UT, June 23-26, 1997).

50. "International Market Report," King's International Coal Trade, No. 1193 (September 4, 1998), p. 3. 51. "International Market Report," King's International Coal Trade, No. 1194 (September 11, 1998), pp. 2-3. 52. Energy Information Administration, "Country Analysis Brief: South Africa," web site www. ela.doe.gov (February 1999).

53. R.W. Lynch, C. Pinkney, L. Feld, E. Kreill, and A.W. Lockwood, "Opportunities for the Power Industry in South Africa," paper presented at the 58th Annual American Power Conference (Chicago, IL, April 11, 1996), web site www.fe.doe.gov.

54. "CMS To Tender for Jorf Supplies," International Coal Report, No. 434 (October 8, 1997), p. 8.

55. "CMS Generation Finalizing Moroccan Power Project," King's International Coal Trade (March 29, 1996). P. 13.

56. IEA Coal Research, Coal Prospects in Latin America to 2010, IEAPER/23 (London, UK, March 1996). 57. B. George, Assistant Manager Fuel Division, Chilgener, "South America's Thermal Coal Report," paper presented at the Western Coal Council's Pacific Coal Forum (Park City, UT, June 23-26, 1997). 58. Energy Information Administration, "Regional Indicators: Central America," web site www.eia.doe.gov June 1998), Table 2.

59. A. Chambers, "Private Fiesta," Independent Power (September 1998), pp. 14-19.

60. TECO Power Services, "TECO Power Services and Coastal To Begin Construction of Second Guatemala Plant (News Release. Tampa, FL, December 4, 1997), web site www.teco.net.

61. "International Market Report," King's International Coal Trade (July 19, 1996), pp. 9, 11.

62. "Market Chatter." King's International Coal Trade JJanuary 24, 1997). p. 14.

63. Mining Annual Review 1996 (London, UK: Mining Journal, Ltd., July 1996), p. 170.

64. "International Market Report," King's International' Coal Trade (June 21, 1996), p. 11.

65. "U.S. 1998 Exports Study Bodes Ill for 1999 Expectations," King's International Coal Trade, No. 1200 (October 23, 1998), pp. 1-2.

66. U.S. Federal Reserve Bank, "Foreign Exchange Rates (Monthly)," web site www.bog.frb.fed.us (accessed November 23, 1998).

67. Energy Information Administration, Annual Energy Outlook 1999, National Energy Modeling System run AEO99B.D100198A.

68. Katsahiko Saito, Managing Director Japan Coal Development Company Ltd., "JPU's Future Coal Demand and It's Significance for U.S. Western Mines With Outlet of LAXT," paper presented at the Western Coal Council's Pacific Coal Forum (Park City, UT, June 23-26, 1997).

69. "Pink Slips Come With a Big Heart in Japan Layoffs," Christian Science Monitor (June 13, 1997), p. 1. 70. International Energy Agency, International Coal Trade: The Evolution of a Global Market (Paris, France, January 1998).

71. Energy Information Administration. Annual Prospects for World Coal Trade 1991, DOE/EIA-0363 (91) (Washington, DC, June 1991), Table 1.

72. "International Market Report," King's International Coal Trade, No. 1193 (September 11, 1998), pp. 2-3.

73. "International Market Report," King's International Coal Trade, No. 1179 (May 29, 1998), pp. 13-14.

74. Energy Information Administration, Annual Prospects for World Coal Trade 1987, DOE/EIA-0363(87) (Washington, DC, May 1987), Tables A2 and A3.

75. Energy Information Administration, Coal Data: A Reference, DOE/EIA-0064(93) (Washington, DC, February 1995). pp. 33-35.

76. World Coal Institute, "Coal in the Steel Industry," web site www.wci-coal.com (1998).

Nuclear Power

In 1997, a total of 2,276 billion kilowatthours of electricity was generated from nuclear power worldwide, providing 17 percent of the world's electricity generation. Among the countries with operating nuclear power plants, national dependence on nuclear power for electricity varies greatly (Figure 53). Ten countries met at least 40 percent of their total electricity demand with generation from nuclear reactors.

The prospects for nuclear power to maintain a significant share of worldwide electricity generation are uncertain, despite projected growth of 2.5 percent per year in total electricity demand through 2020. Over the long

Figure 53. Nuclear Shares of National Electricity
Generation, 1997 tu

Kazakhstan Pakistan

China

Brazil

India

Netherlands

Mexico

South Africa Romania Argentina Russia Canada United States Czech Republic Armenia

Taiwan

United Kingdom

Spain Finland Germany

South Korea

Japan Hungary Slovenia

Switzerland

Slovakia

Bulgaria

Sweden

Ukraine

Belgium

term, of the regions shown in Figure 53, only the devel oping nations and Japan are projected to have net addtions to nuclear power capacity. In other regions. countries that are operating older reactors and have other, more economical options for new generating capacity are expected to let their nuclear capacity fade as current nuclear units are retired.

In the IEO99 reference case, worldwide nuclear capacity is projected to increase from 352 gigawatts in 1997 to 356 gigawatts in 2010. After 2010 it begins to decline, reaching 311 gigawatts in 2020. Aggressive plans to expand nuclear capacity, mainly in the Far East, drive the near-term increase. Plant retirements in the United States and other countries exceed new additions, contributing to the decline later in the forecast (Figure 54. Developing Asian countries are projected to add 30.6 gigawatts by 2020, but the industrialized nations overall lose 69.9 gigawatts. Nuclear generation in the reference case remains flat over the forecast period, representing a declining share of electricity consumption.

Three nuclear capacity scenarios were developed for IEO99, to provide a range of outcomes reflecting the uncertainty surrounding future investment in nuclear technology (Figure 55 and Table 16). The reference case reflects a continuation of present trends; the low and Figure 54. World Nuclear Capacity by Region, 1970-2020

France Lithuania

0 10 20 30 40 50 60 70 80 90 100

Percent

Source: International Atomic Energy Agency, Nuclear Power Reactors in the World 1997 (Vienna, Austria, April 1998).

2020

1970 1980 1990 2000 2010 Sources: History: International Atomic Energy Agency, Nuclear Power Reactors in the World 1997 (Vienna, Austria, April 1998). Projections: Based on detailed assessments of country-specific nuclear power programs.

high cases present more pessimistic and optimistic views of the future of the nuclear power industry. For the United States, the reference case assumes that the current trend of early reactor retirements will continue if the economics do not justify continued operation, resulting in the retirement of almost one-quarter of current units before their licenses expire. Six units are projected to receive license renewals for an additional 20 years, but the remainder are assumed to retire at the end of their current licenses. For foreign nuclear projections, the reference case takes into account announced schedules for completion of units under construction and any announced retirement dates. Also considered are political environments, national energy plans, construction management experience, and financial conditions. Complete country-by-country listings of the projections for the reference, low, and high nuclear cases are provided in Appendixes A, B, and C.

The low growth case projects a more significant decline in nuclear capacity orders, along with additional retirements of existing units. In the United States, reactors are assumed to face higher aging-related expenses, leading to more early retirements. The forecast for worldwide capacity in 2020 is 178 gigawatts, a 49-percent decline from current capacity. The high growth case reflects a slight revival for the nuclear power industry, with net capacity growth of 1 percent annually over the forecast period. In the United States, the high growth case assumes that aging effects will be limited, causing more reactors to seek license renewals. The high growth projections generally are based on assumptions that construction times for new units will be shorter, and that provisions will be made to extend the operating lives of existing units beyond current retirement dates. IEO99 does not address the Kyoto Protocol agreement;

however, if there are limits on carbon emissions in the future and, in particular, fees associated with carbon emissions, the relative economics of operating nuclear power plants could improve (see box on page 78).

Nuclear generation in the reference case remains fairly flat, with a declining share of the world's electricity consumption (Figure 56). Some key developments affecting the nuclear power industry in 1998 include:

•Plants continue to be retired early in North America. 1998 began with the announcement by Commonwealth Edison that the two Zion units in Illinois would be shut down permanently [4]. Later in the year, Millstone 1 was retired in Connecticut [5]. Owners cited high costs as making the units noncompetitive. Canada brought its Bruce 3 and 4 units off line, completing the shutdown of eight older units as part of a plan to focus on improving management at newer nuclear facilities.

⚫Competition in the U.S. electric industry leads to sales of nuclear plants. In the first deal of its kind, GPU Incorporated sold its Three Mile Island 1 unit to the U.S.-British joint venture AmerGen Energy Company [6]. Later in the year, Entergy Corporation outbid AmerGen to buy Boston Edison's Pilgrim nuclear station [7]. Boston Edison has been selling off all its generating units under the Massachusetts State plan to open the electricity generation market to competition. Both AmerGen and Entergy own and operate multiple nuclear stations, and they plan to use their experience to lower operating costs at the newly acquired sites. Industry experts expect this trend to continue, with owners of single-unit plants selling their plants, leading to a consolidation of the nuclear industry.

Figure 56. World Nuclear and Total Electricity
Consumption, 1996-2020