CoalWire 79, 19th March 2015

features

Global Wave of New Coal Plants Is Going Bust, New Report Finds

“Since 2010, for every coal plant completed worldwide, two proposed coal plants have been shelved or cancelled. We have known for a while that the coal industry was facing serious headwinds – even banks like Citi and Goldman Sachs have been warning of coal’s impending decline ­- but the scale of project failure should be a wake-up call to anyone who still thinks the coal industry’s salvation lies in a 21st century global coal boom,” write Mary Anne Hitt and Nicole Ghio from the Sierra Club in Huffington Post.

Suggested Tweet: Global Wave of New #Coal Plants Is Going Bust Says New Report http:[email protected]@maryannehitt Report http://bit.ly/1x7YorW

campaigns

Italy’s largest utility to retreat from new coal

Following a meeting with Greenpeace, Enel – Italy’s largest utility – announced that it is committed to “gradually phasing out further investment in coal” and increasing investments in renewable energy. While Enel said it supported the goal of limiting the global temperature increase to two degrees, it said it still had “differences” with Greenpeace over the company’s continued operation of two coal plants in Italy. (Enel, Financial Times)

Suggested Tweet: Italy’s largest utility to retreat from new #coal http://bit.ly/19xuv9Q @Energydesk http://bit.ly/1FA8yDh

Thai regulator rejects Krabi environmental assessment report

The Thailand Government’s Office of Natural Resources and Environmental Policy and Planning (ONEP) has rejected the Environmental Impact Assessment report on the Klong Rua coal seaport and the Krabi coal-fired power plant. A panel reviewing the report rejected it as misleading and incomplete. While the Energy Regulatory Commission is seeking to delay a number of new power stations due to lower than forecast electricity demand, the Electricity Generating Authority of Thailand is seeking to press ahead with the Krabi plant. (Phuket Gazette,Bangkok Post)

Suggested Tweet: Thai regulator rejects #Krabi environmental assessment report http://bit.ly/1O7JiaY #Thailand

“We support divestment as it sends a signal to companies, especially coal companies, that the age of ‘burn what you like, when you like’ cannot continue,”

said Nick Nuttall, the spokesperson for the United Nations Framework Convention on Climate Change.

top news

Adani rebuffed by State Bank of India: Adani Enterprise’s bid to borrow US$1 billion from the State Bank of India (SBI) for its Galilee Basin coal project has foundered.  Several anonymous bank sources said that due to the poor economics of the project, SBI was about to inform Adani that it wouldn’t proceed with the loan. Initially neither SBI nor Adani would comment, though the bank’s Chairman, Arundhati Bhattacharya, subsequently dismissed the suggestion as “gossip”. However, in the days since the story first broke, Adani has not commented on it publicly. (Reuters, Economic Times)


Department delays decision on new Louisiana export terminal: The Louisiana Department of Natural Resources has delayed a decision on an application for a coastal-use permit for the proposed Plaquemines coal export terminal. The department has requested RAM Terminals provide further information on its assessment of alternative sites and measures to limit coal spillage into the Mississippi River and coastal areas. In late 2014 a state judge overturned an earlier decision to grant a permit for the terminal. (Nola.com)


Court rejects travel limits on Greenpeace India activist: The Delhi Supreme Court has overturned the Ministry of Home Affairs decision to block Greenpeace India coal activist Priya Pillai from travelling to the UK in January 2015 to speak to a parliamentary group. In a rebuff to the Modi government, Justice Rajiv Shakder stated that “you cannot muzzle dissent in a democracy.” He ordered that Pillai’s name be removed from the Intelligence Bureau’s database and the advisory notice stating she should be blocked from overseas travel quashed. (Greenpeace, Delhi High Court)

Norwegian Government Pension Fund drops more coal stocks: An analysis of the holdings of the US$860 billion Norwegian Government Pension Fund Global reveal that in 2014 stocks of 53 coal companies were sold, including Peabody Energy, US mountaintop mining companies and 13 Indian coal companies. However, while the fund dropped investments in one-third of the coal companies it held stocks in, its overall coal portfolio fell by only 5% to US$9.6 billion. The fund also increased its holdings in the Chinese coal sector. (Guardian, Urgewald)


Global power sector’s greenhouse gas emissions stall in 2014: Preliminary data indicates that the total greenhouse gas emissions from China fell by 2 per cent in 2014 compared to the previous year. The International Energy Agency (IEA) estimates that in 2014 global emissions of carbon dioxide from the energy sector stood at 32.3 billion tonnes, the same level as 2013. The IEA noted that this was the first time in 40 years that emissions had not increased while the global economy had grown. The IEA attributed the shift to the reduction in coal consumption and increasing renewable generating capacity in China and OECD countries. (Bloomberg, International Energy Agency)


Australian underground coal gasification plant exposed: Court documents filed by the Queensland government’s environment department allege that Linc Energy failed to report numerous gas leaks, pollution and even a fire that required the evacuation of its trial underground coal gasification plant.  The department alleges that benzene contamination of groundwater more than 60 times higher than permitted was not reported. (ABC News)

“The Chinese government is determined to tackle smog and environmental pollution as a whole … But the progress we have made still falls far short of the expectation of the people. Last year, I said the Chinese government would declare war against environmental pollution. We’re determined to carry forward our efforts until we achieve our goal,”

said the Chinese Premier Li Keqiang at a news conference after the annual National People’s Congress.

news

Canada: British Columbia rejects Glencore’s request for assessment of Sukunka project.


China: Authorities shut down coal to methanol plant in Inner Mongolia due to pollution.


India: 236 cases of corruption reported in Coal India and subsidiaries in a year.

South Africa: CEO and three other Eskom executives suspended pending inquiry into utility.


US: Montana members push to restore tax breaks for coal mined from Indian reservations.


US: Kentucky state mining inspector pleads guilty to taking bribes from former politician.

“You’ll always get these downward parts of the economic cycle where mining companies overshoot the mark. So the million-dollar question is, is the downshift in demand terminal? I think it is … I think we’re moving towards a coal-free future and what we’re seeing [production cuts] in the Bowen Basin [in Queensland, Australia] is material evidence of that,”

said Richard Gibbs, the global head of economics at Macquarie Bank.

companies + markets

Merger of Murray Energy and Foresight Resources: US company Murray Energy has agreed to buy a controlling interest in Foresight Energy at a cost of US$1.4 billion. The deal means that Murray Energy will gain new low-cost coal mines in the Illinois Basin and have 8.2 billion tonnes of coal reserves, making it the largest coal company in the US. The combined production of the two companies is 82 million tonnes, about 10 per cent of US production. (St Louis Post-Dispatch, Platts)


Chinese steel cuts affect met coal demand: Goldman Sachs analysts say that rapidly slowing house construction in China will cause “tough times over the long-term horizon for global steel-making.” Analysts from a number of firms believe steel production in China, the largest global producer, will fall this year. China is a major domestic producer of metallurgical coal as well as importing about a quarter of the 300 million tonnes of seaborne metallurgical coal.(Bloomberg)


Mechel slides towards bankruptcy: After the failure of attempts by Mechel to restructure its US$6 billion debt, the Russian Economy Minister Alexei Ulyukayev said that “no other options are left” other than bankruptcy. Mechel, one of the world’s largest producers of metallurgical coal, is owned by Russian oligarch Igor Zyuzin. (Sputniknews, Forbes)

US coal production unprofitable: Consultancy Wood Mackenzie estimates that about 147 million tonnes of US coal production is currently “unprofitable”, particularly in Central Appalachia. They estimate that about 58 per cent of metallurgical coal production is at risk of closure. Ratings agency Moody’s have downgraded the US coal industry to ‘negative’ due to falling revenues; caused by an over-supplied global metallurgical coal market and weakening domestic thermal coal demand due to low gas prices and plant closures. (Platts, Moody’s)


Bank of America bearish on global coal prices: Bank of America Merrill Lynch has cut its 2015 forecast price for Australian seaborne thermal coal from US$65 to US$57 per tonne and US$52 per tonne in 2016. In its ‘Coal bites the dust’ research report the bank says it expects Chinese coal imports to fall in both 2015 and 2016 due to weaker demand in the power sector and increasing renewable generation. (SNL)


Egypt signs deals for coal power boom: The Egyptian Government has signed agreements for four proposed coal-fired power stations with a generating capacity of between 9900 and 11,940 megawatts (MW).  One deal, between Orascom Construction and International Petroleum Investment Company, is for a 3000 MW power station and coal terminal near the El Hamrawein Port. (CoalSwarm)

resources                 take action

Stranded Assets and Subcritical Coal: The Risk to Companies and Investors, Oxford University Stranded Assets Programme, March 2015. (Pdf)


This report identifies the lowest efficiency (‘sub-critical’) coal plants in the world – which account for three-quarters of the coal fleet – and argues that they are the plants most exposed to becoming stranded assets.


Boom and Bust: Tracking the global coal plant pipeline, CoalSwarm, Sierra Club, March 2015. (Pdf)


Based on reviewing 3900 proposed coal plants, this report provides a detailed overview of the waning global coal power plant boom. It also provides a detailed region-by-region analysis with particular emphasis on the projects which are still being actively promoted. The report is based on the Global Coal Plant Tracker, an online database of planned coal plants around the world.


“Moorburg power plant – Last of a dying breed, or the future of coal in Germany?” Clean Energy Wire, March 17, 2015.

This article provides a useful overview of why the coal plants currently coming online in Germany will probably be the last to be built there.

Thunderclap over challenge to US pollution rules

On March 25 the US Supreme Court will hear arguments by the National Mining Association against the Environmental Protection Agency’s Mercury & Air Toxics Standards for power plants. Earthjustice is asking supporters to spread the word about the case via social media by joining aThunderclap.

Suggested Tweet: US #coal industry asks #SupremeCourt to put profit before people & planet. Join this Thunderclap to say no way! http://thndr.it/17Z1uT5