Some commodities traders suspected something was brewing in Russia last fall.

From September or October freight train connections between the Siberian mining areas and the Baltic Sea ports came to a standstill.

It was probably not only due to the consequences of the Covid pandemic.

Apparently, locomotives were already missing because they were needed for military transport instead of bringing in supplies for German coal-fired power plants.

They may be phased out in the long term, but they are currently in high demand: Because gas is extremely expensive due to the Ukraine conflict, the charcoal piles are in full operation.

But Germany has also been dependent on Russia when it comes to coal supplies.

Almost 60 percent of the steam coal came from Russia last year.

Renaissance of hard coal

Helmut Buender

Business correspondent in Düsseldorf.

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There are still no sanctions that impede imports.

But the logistics don't run smoothly.

According to the Association of German Coal Importers (VDKi), sixty percent less hard coal is now arriving in the Baltic ports than in “normal times”.

Although more coal is being shipped via Murmansk and the Black Sea port of Taman, the trade is still on alert and preparing for all eventualities.

“We have to remain able to deliver.

The dealers are looking around for other sources of supply and some have already reacted," reports VDKi Chairman Alexander Bethe.

Coal-fired power plants are also kept in the grid reserve for emergencies.

For this reason alone, the Federal Network Agency, in close contact with the energy industry, pays close attention to whether the coal storage facilities are sufficiently full.

So far, the regulator has not seen any acute bottlenecks, not even with gas.

"The fuel supply of the German power plants is sufficient and further precautions are being taken," said a spokesman.

So far, the conflict has hardly had any effect on gas imports.

The import flows had “not shifted significantly” in the past few days.

The storage level is even approaching the level usual in previous years at the end of February.

Nevertheless, hard coal is currently experiencing a small renaissance in the German electricity supply.

Last year, their generation increased by around a third to 46.4 terawatt hours, more than ten percent of the net electricity production came from hard coal.

Around 25 million tons have been burned for this purpose.

The trade expects that it could even be 29 million tons this year because the gas-fired power plants are likely to be shut down due to the high prices.

Given the strategic role that coal will play in power security for the foreseeable future, the roadmap for phasing out coal-fired power generation could falter.

Brandenburg's Prime Minister Dietmar Woidke (SPD), who is primarily concerned with lignite, is already questioning an exit by 2030.

Alternative delivery countries

For the supply of the coal-fired power plants, Federal Minister of Economics Robert Habeck (Greens) has brought up a state reserve as for oil.

The Federal Minister of Finance and FDP Chairman Christian Lindner supports the initiative.

Bethe, on the other hand, considers public stockpiling to be unnecessary.

The power plant operators maintain large coal stores anyway, and there are reserves in the ports.

Above all, hard coal, unlike natural gas, is abundantly available on the world market.

However, Russian coal is characterized by its low sulfur content, so it will not be easy to replace it.

"Technically, it's going to be a bit choppy, because engineering skills are required in the power plants," says Bethe, whose main job is an appointee for the Japanese trading company Jera Global Markets.

The United States, Colombia and South Africa are the primary alternative supplier countries, followed by Mozambique, Indonesia and Australia.

"The supply is secured, but it will be expensive," says Bethe.

Compared to early 2021, hard coal prices have more than tripled.

Record values ​​of 230 dollars per ton plus a “premium” of twenty percent are currently being asked for prompt delivery.

In terms of fuel value, coal is still around $100 a ton cheaper than gas.