EDF in Talks to Sell Coal Trading Operation
July 11 2016 - 12:10PM
Dow Jones News
French utilities giant, É lectricité de France SA, or EDF, is in
talks to sell its coal trading operation to Japan's Jera Co,
according to a person familiar with the matter, in another example
of how this fuel has fallen out of favor in Europe and the U.S.
EDF's move to sell one the world's largest coal traders comes as
the company looks to shore up its balance sheet and last year
launched a review of its continental European fossil fuel power
assets.
Environmental concerns have triggered tighter regulations in the
U.S. and Europe around burning coal, deterring utilities from using
the fuel that powered the industrial revolution in both regions.
Some European countries are phasing out cheaper coal power in favor
of cleaner gas or renewable sources.
Jera Co., a joint-venture formed in 2015 by Japan's first and
third largest utilities, Tokyo Electric Power Co and Chubu Electric
Power Co, declined to comment.
A spokeswoman for EDF Trading declined to comment.
EDF Trading launched its coal trading operation in 2000, helping
procure supplies for the group's power stations, and went on to
become one of the largest coal traders globally. At times it has
been Europe's largest coal importer by annual volumes over the last
decade.
In 2014 the unit traded a total of 662 million metric tons of
coal. It also has a 7.5% stake in Australia's Narrabri thermal coal
mine, along with supply agreements in countries including
Australia, Colombia, Indonesia, Russia, South Africa and the
U.S.
EDF is also trying to sell its U.K. gas and coal power plants, a
person familiar with the matter said, a move which would reduce its
coal needs, whittling down some of the business that went to EDF
Trading.
EDF declined to comment on the asset sales.
Other French energy companies have moved to exit the coal
industry. Last year oil giant Total SA said it is withdrawing from
coal production and marketing, while Engie SA, formerly GDF Suez
SA, said it would not build any new coal-fired power plants.
In the U.S., gas is expected to exceed coal-fired power
generation for the first time in 2016, with the Energy Information
Administration forecasting coal generation at 32%, down from
fueling around half of U.S. power consumption in 2008.
Companies and utilities in Asia continue to burn coal. Japan is
the world's third-largest importer of thermal coal, after China and
India, with all three countries sucking in around half of the
global trade in the fuel, according to the International Energy
Agency.
Mayumi Negishi and Nick Kostov contributed to this article.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
July 11, 2016 11:55 ET (15:55 GMT)
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