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Spain proposes 67% increase in coal purchases to 6 million mt

Staff writer ▼ | May 28, 2015
Spain's Industry Ministry has drawn up a ministerial order that will oblige electricity generators to purchase 6 million mt of domestically mined coal for 2015, the ministry said.
Spain coal
Order   Industry Ministry wants more of domestically mined coal
The figure is an increase of 67% from the 3.6 million mt authorized for 2014, the Ministry said, although both figures are still below the quantity established in the country's coal plan spanning 2013-2018.

According to coal lobby Carbunion, the quantities of domestic coal that were authorized for compulsory purchase in 2014 and 2015 should have been 6.7 million mt and 6.8 million mt, respectively.

More than 80% of the coal and lignite consumed in Spain go into electricity production, where it covered 16% of the generating mix in 2014; the remaining amount is mainly used by industry.

According to Carbunion, 63% of coal-fired electricity was generated in 2014 by imported coal.

The Industry Ministry said that the ministerial order will be scrutinized by the country's competition commission before being sent to Brussels for approval, without adding a timeframe.

Spain's domestic coal is generally less efficient and more expensive than imported product -- which led to the quota system being introduced in 2011 to incentivize the consumption of up to 10 million mt annually of local coal amid a series of strikes and growing stockpiles of domestic material.

Spain's domestic coal sector has shrunk notably since 1990, when it was producing 20 million mt/year, dropping to just 4.4 million mt in 2014.

Imported coal volumes have also fallen in the long term, from levels around 20 million mt between 2000 and 2005 to an average of 16 million mt/year in the last five years.