popular articles

Coal too expensive: New Caledonia struggles to pay for its electricity

Faced with soaring coal prices linked to the war in Ukraine, New Caledonia's electricity system is threatened with bankruptcy.

Please share:

Faced with soaring coal prices linked to the war in Ukraine, New Caledonia’s electricity system is threatened with bankruptcy: 80% of the electricity produced in New Caledonia comes from imported fossil fuels and its manager is simply afraid of defaulting.

The Société néo-calédonienne d’énergie (Enercal), a semi-public company in which New Caledonia has been the majority shareholder since 2008, has done its homework: it will be insolvent by the end of the year if no measures are taken to compensate for its deficit, it announced at the end of October.

“The price of coal has increased almost fivefold, and the crisis in Ukraine is also having an adverse effect on the exchange rate for us.

However, all projections show us that the situation will not improve for at least three years,” said the director general of Enercal, Jean-Gabriel Faget, to AFP.

According to Enercal, the consequences of the war in Ukraine should lead to an additional deficit of 42 million euros for the year 2022. This is a significant figure which adds to the company’s overall deficit of 75.6 million euros.

A real headache for the local government, already forced to vote at the beginning of the year an 11% increase in the public tariff, frozen since 2012.

A freeze that has never been compensated by the public authorities to the company.

To meet the additional cost, it would be necessary to “increase the public tariff again, by about 20%”, according to Enercal’s estimates.

A situation that is “unthinkable”, according to Christopher Gyges, the local government member in charge of energy transition, who intends instead to “ask the State for national solidarity”.

New Caledonia does not benefit from the compensation system that allows consumers in the French overseas departments to pay the same price for electricity as in France, despite the additional costs associated with its insularity.

Dependency

In the medium and long term, the local government is betting “on renewable energy to get away from dependence on fossil fuels,” says Christopher Gyges.

For the period 2016-2022, New Caledonia has adopted an ambitious energy transition plan that has enabled the share of renewable energy in electricity production to rise from 10% to 23%.

The territory now has 39 photovoltaic farms producing 178 megawatt hours. 25 new production sites should be built between 2023 and 2025.

“The goal is that the equivalent of public consumption, that is, excluding the metallurgical sector, be produced from renewable energy by 2030″, Gyges adds.

The update of this scheme could be applied to nickel, which has three factories, making the archipelago an extremely industrialized place, considering its population of 270,000 inhabitants.

Some 75% of the electricity produced is consumed by the metallurgy industry and the new text therefore provides for increasing the share of renewable energy in the sector’s electricity supply to 50%.

There remains the thorny issue of storing the energy produced in lithium-ion batteries.

“Today, the storage on lithium-ion battery, it is a solution which is extremely expensive. The kilowatt/hour that goes into a battery, at the output its price is multiplied by three”, underlines
Jean-Gabriel Faget.

The government intends to develop pumped-storage power stations that operate by pumping water with photovoltaic energy during the day and use that water to turn turbines at night to generate electricity.

A more economical alternative, but requiring significant investments: 600 million euros for two units capable of storing 300 megawatts.

A total of 2.4 billion euros of investment is planned for the development of renewable energy. This colossal sum has been the subject of debate: presented to the elected representatives of the Congress of New Caledonia, its examination has been postponed by the pro-independence majority of the Assembly, which considered that it did not have sufficient visibility on the territory’s capacity to support these investments.

Register free of charge for uninterrupted access.

Publicite

Recently published in

New coal-fired electricity capacity added in 2024 dropped to 44 GW, driven mainly by China and India, according to a report released on Thursday.
Finnish energy company Helen has halted operations at the Salmisaari plant, the country’s last coal facility, halving its carbon dioxide emissions in one year.
Finnish energy company Helen has halted operations at the Salmisaari plant, the country’s last coal facility, halving its carbon dioxide emissions in one year.
An independent study suggests that the Hail Creek mine may emit up to eight times more methane than reported in Glencore's official disclosures.
An independent study suggests that the Hail Creek mine may emit up to eight times more methane than reported in Glencore's official disclosures.
Eskom has connected Unit 6 of the Kusile coal-fired power station, adding 800 MW to the national grid amid efforts to stabilise electricity supply in South Africa.
Eskom has connected Unit 6 of the Kusile coal-fired power station, adding 800 MW to the national grid amid efforts to stabilise electricity supply in South Africa.
The Indian government presents a project to create a coal exchange for the domestic market, a measure aimed at improving transparency and regulating the local coal market.
The United States has announced its withdrawal from the Just Energy Transition Partnership with South Africa, thereby reducing the country’s international financial commitments in its gradual exit from coal.
The United States has announced its withdrawal from the Just Energy Transition Partnership with South Africa, thereby reducing the country’s international financial commitments in its gradual exit from coal.
Indonesia sets a floor price for coal to strengthen its control over domestic prices and influence international markets. This new strategy will take effect on March 1, 2025.
Indonesia sets a floor price for coal to strengthen its control over domestic prices and influence international markets. This new strategy will take effect on March 1, 2025.
Indonesia continues to strengthen its dependence on coal, jeopardizing its greenhouse gas emission reduction commitments. This paradox is highlighted in a recent report, emphasizing the tension between environmental goals and economic realities.
Indonesia continues to strengthen its dependence on coal, jeopardizing its greenhouse gas emission reduction commitments. This paradox is highlighted in a recent report, emphasizing the tension between environmental goals and economic realities.
Australian mining giant BHP saw its net profit multiply fivefold, reaching $4.4 billion, despite an 8% drop in revenue. Sustained demand and signs of recovery in China strengthen its outlook.
In 2024, China began building new coal power plants, a decision that threatens its goal of reaching peak carbon emissions by 2030, according to a report published by the Centre for Research on Energy and Clean Air (Crea) and Global Energy Monitor (GEM).
In 2024, China began building new coal power plants, a decision that threatens its goal of reaching peak carbon emissions by 2030, according to a report published by the Centre for Research on Energy and Clean Air (Crea) and Global Energy Monitor (GEM).
By the end of 2024, coal's share in Australia's electricity generation dropped below 50%, a historic first, thanks to the surge in solar energy production.
By the end of 2024, coal's share in Australia's electricity generation dropped below 50%, a historic first, thanks to the surge in solar energy production.
In the midst of prolonged tensions with Russia, Ukraine offers to provide free coal to Transnistria, a pro-Russian region of Moldova, to alleviate an energy crisis worsened by the cutoff of Russian gas supplies.
In the midst of prolonged tensions with Russia, Ukraine offers to provide free coal to Transnistria, a pro-Russian region of Moldova, to alleviate an energy crisis worsened by the cutoff of Russian gas supplies.
The Pokrovsk mine, Ukraine's sole coke producer, closes under Russian military pressure. This decision threatens the steel industry, the economy, and Ukraine's strategic logistics.
As coal reaches a historic peak in 2024, renewable energy reshapes global dynamics. In China, where one-third of the world’s coal is consumed, the energy transition remains a pivotal factor for the sector's future.
As coal reaches a historic peak in 2024, renewable energy reshapes global dynamics. In China, where one-third of the world’s coal is consumed, the energy transition remains a pivotal factor for the sector's future.
China confirms its central role in the Asian coal market with a forecast of 330 million tons of coal imports in 2025, according to an Australian report.
China confirms its central role in the Asian coal market with a forecast of 330 million tons of coal imports in 2025, according to an Australian report.
Australia revises its metallurgical coal export forecast to reach 163 million tons for the 2024-25 fiscal year. However, revenues are expected to decline due to falling global market prices.
Australia revises its metallurgical coal export forecast to reach 163 million tons for the 2024-25 fiscal year. However, revenues are expected to decline due to falling global market prices.
Global coal demand peaked at 8.77 billion tons in 2024. Thanks to the rise of renewable energy, it is expected to stabilize by 2027, according to the International Energy Agency (IEA).
In China, Harbin Electric Corporation inaugurates a 660 MW ultra-supercritical coal-fired CFB boiler, blending technological innovation and ecological management. A project that raises questions as coal declines globally.
In China, Harbin Electric Corporation inaugurates a 660 MW ultra-supercritical coal-fired CFB boiler, blending technological innovation and ecological management. A project that raises questions as coal declines globally.
China's coal imports increased by 19% in November compared to October, reaching nearly 55 million tons. This growth is driven by stable supply from long-term contracts, despite muted spot demand.
China's coal imports increased by 19% in November compared to October, reaching nearly 55 million tons. This growth is driven by stable supply from long-term contracts, despite muted spot demand.
President Prabowo Subianto commits to eliminating coal power plants by 2040, marking an unprecedented ambition. This radical shift poses significant technical and financial challenges as the country remains heavily reliant on coal.
President Prabowo Subianto commits to eliminating coal power plants by 2040, marking an unprecedented ambition. This radical shift poses significant technical and financial challenges as the country remains heavily reliant on coal.
China, the world's largest emitter of greenhouse gases, is expected to reach its peak coal consumption by 2025, according to a recent report. This represents a key step toward energy transition despite the challenges of a rapidly growing economy.
The British mining giant Anglo American sells its steelmaking coal mines in Australia to Peabody Energy for $3.775 billion, marking its strategic withdrawal from this sector.
The British mining giant Anglo American sells its steelmaking coal mines in Australia to Peabody Energy for $3.775 billion, marking its strategic withdrawal from this sector.
In Ankara Province, Turkey, 500 miners occupy a coal mine to protest a privatization project, fearing job losses and worsening working conditions.
In Ankara Province, Turkey, 500 miners occupy a coal mine to protest a privatization project, fearing job losses and worsening working conditions.
The restart of the Cordemais coal plant, planned to address the cold wave, has been halted by a strike. Workers oppose the scheduled closure and demand guarantees for their future.
The restart of the Cordemais coal plant, planned to address the cold wave, has been halted by a strike. Workers oppose the scheduled closure and demand guarantees for their future.

Advertising