CoalWire 111, November 19, 2015

November 19, 2015

editor’s note

For years the coal industry’s PR mantra has been that coal power is here to stay for decades more, notwithstanding accelerating climate change. However, as the latest data reveals a two to four per cent fall in coal consumption in 2015 and the UK plans to shut all coal plants by 2025, the question is now becoming ‘how fast will coal fall’? This week a new agreement at the OECD, while not perfect, signals the further demise of coal as more projects are deprived of public financing.

Bob Burton
CoalWire Editor

features

Global coal consumption falls 2-4% in 2015

Global coal consumption is on track to fall by between two and four percent in 2015 due to declining consumption in the biggest coal-burning countries such as China writes Tim Buckley from the Institute for Energy Economics & Financial Analysis.

Tweet: Global #coal consumption down 2-4% in 2015 due to shifts in #china & beyond http:[email protected]_institute #climate

The International Energy Agency’s climate-friendly scenario spells doom for coal

The dire consequences for the coal industry of  the two degrees scenario in the International Energy Agency’s World Energy Outlook 2015 report got little media airplay but should have,writes Bob Burton in EndCoal.

Twitter: The International Energy Agency’s #climate-friendly scenario spells doom for #coal http://bit.ly/1OQNEG7 @bobburtonoz #climate

Why ‘clean coal’ won’t stop climate change

The coal industry’s pitch that building higher-efficiency coal plants is all that needs to be done to address coal power’s impact on the global climate doesn’t stack up, writes Ilmi Granoff and Sam Pickard from the Overseas Development Institute.

Twitter: Why ‘clean #coal’ won’t stop #climate change @theilmatic @Sam__Pickard @ODIdev http://bit.ly/1NYg9QK

campaigns

OECD imposes restrictions on coal finance but loopholes remain

The 34 member-nations of the Organisation for Economic Co-operation and Development (OECD) have agreed on significant restrictions on the public financing of new coal plants from January 1, 2017. The agreement allows financing of ultra-supercritical plants worldwide but with the loan term restricted to 12 years. The funding of supercritical plants over 500 megawatts (MW) is not permitted. The initial agreement between Japan and the US allowed the funding of smaller 300-500 MW supercritical units in the poorest countries. However, in a concession to Australia and South Korea, the funding of the 300-500 MW supercritical units in the poorest countries was extended to include countries where less than 90 per cent of households have access to electricity which includes countries such as India, Philippines, South Africa and Indonesia. While it has been estimated the compromise deal could exclude finance from about 85 per cent of proposed coal plants, potential loopholes remain. The agreement is subject to a review in 2019. (Reuters, Sydney Morning Herald)

Tweet: OECD places restrictions on finance for #coal plants but loopholes remain http://bit.ly/1QMxrkK

top news

UK to phase out remaining coal plants by 2025: Energy Secretary Amber Rudd has announced the government plans to phase out the country’s coal-fired power stations by 2025 and subsidise the construction of gas-fired and nuclear power stations. The coal phase-out has been welcomed by environmental groups, but the financial support for nuclear and gas plants has been criticised given recent cuts to support for solar and wind power. (BBC, EnergyDesk)


More problems for India’s ‘Ultra-Mega’ coal plants: Proposals to build 4000 megawatt (MW) ‘Ultra-Mega’ Power Projects (UMPPs) to replace old low-efficiency units at power station sites with large land allocations have been opposed by the Central Electricity Authority. State governments have reported that much of the land surrounding the power stations is now used while there are also significant water supply limits. However, the Secretary for Power, PK Pujari, has foreshadowed the government will call for bids for two greenfield ’Ultra-Mega’ power projects in December and a further two by March 2016. He flagged that the proposed plants could include Bedhabahal in Odisha and Deogarh in Jharkhand. (Financial Express, Economic Times)


India weakens forest law for mining: The Modi Government has approved a significant weakening of forest protection laws.  It has allowed state governments to approve mining licences over non-forested parts of a proposed licence area before the Ministry of Environment, Forests and Climate Change (MoEFCC) has approved the use of adjoining forested areas. Environmental groups argue the change will increase conflict with local communities as project developers will use it to increase pressure on the government and advisory committees to rubber-stamp approval for mining in forested areas. (Livemint)

Japanese Minister opposes two new plants: Japan’s new Minister for the Environment, Tamayo Marukawa, has flagged that she “can’t support” two new Kansai Electric Power Company (KEPCO) coal plants with a combined 2300 MW capacity “at this point.” Before Marukawa was appointed in October, her predecessor had opposed three other new coal plants with a combined capacity of 4270 MW on the grounds they threatened Japan’s emissions reduction target. (Bloomberg)


Opposition builds to Boundary Dam CCS plans: In the wake of revelations that SaskPower’s Boundary Dam Carbon Capture and Storage plant is operating at half its planned rate of carbon capture, a new group has formed to oppose plans for the use of CCS for three other aging units at the plant. Energy analyst and wind proponent James Glennie estimates emissions from the existing plant are four times higher than originally proposed and now exceed federal mandatory standards, creating a potential liability for consumers. (Saskatoon Star-Phoenix, Saskatoon Star-Phoenix)


Questions over Adani Australia CEO’s role in Zambian mine pollution: Adani Australia’s chief executive officer, Jeyakumar Janakaraj, was director of operations of Konkola Copper Mines (KCM) when the company was charged in 2010 over the pollution of the Kafue River in Zambia. The company pleaded guilty to charges of having polluted the river. Environmental Justice Australia and the US group Earthjustice argue the Queensland Environment Department and Federal Environment Minister Greg Hunt should have considered Janakaraj’s track record when assessing whether licence conditions would be complied with. (ABC News)

news

Australia: Coal company’s mine plan bends around NSW Minister’s property boundary.


Canada: Former Alberta Environment Minister to head Coal Association of Canada.


Global: World Coal Association to promote SaskPower’s troubled Boundary Dam CCS project.

Netherlands: US$172 billion Dutch pension fund PFZW to divest from coal companies by 2020.


South Africa: Eskom blames collapse of coal silo which triggered blackouts on design “flaw.”


US: City of Portland bans new coal and other fossil fuel infrastructure projects.

companies + markets

Gates Foundation loses big on fossil fuel investments: Canadian research company Corporate Knights estimates the Bill and Melinda Gates Foundation would have had US$1.9 billion more to spend on its philanthropic projects if it had divested from fossil fuel companies three years ago. New corporate filings of the trust which manages the foundation’s investments reveals that in 2014 almost two-thirds of the fossil fuel investments were sold. (Guardian, Seattle Times)


KPMG projects solar cheaper than Indian coal power by 2018: A report by KPMG estimates   electricity from solar PV will be cheaper than domestic coal by 2018 and confirmed it is already cheaper than power generated from imported coal. KPMG estimates that by 2020 rooftop and utility scale solar power “could be up to 10 per cent cheaper than coal power prices.” KPMG’s cost estimates do not include health and other pollution costs in their estimates for coal power. (RenewEconomy, KPMG)

Poland’s new government faces refinancing challenge: The new pro-coal Polish Government has flagged that it may need to cut production at several mines for four or five years in a bid to restore financial viability for the publicly-owned Kompania Weglowa (KW). The immediate challenge though is to refinance KW, Europe’s largest coal company. The government has also flagged the consolidation of the three largest power utilities into one or, if blocked by the European Commission, possibly two. (Reuters, Reuters)


Giant German utilities falter further: RWE has signalled earnings are likely to drop for the third year in a row due to falling wholesale electricity prices, the growth of renewable energy and the shutdown of nuclear plants. Since the start of the year the value of RWE’s shares have halved. In its September quarterly report the rival utility E.ON announced that it had lost US$7.8 billion due to falling profit margins on fossil fuel power generation. (Reuters, Bloomberg)

resources

Empty Promises: G20 subsidies to oil, gas and coal production, Oil Change International and Overseas Development Institute, November 2015.


The report estimates US$452 billion a year in subsidies are provided by G20 governments for the production of fossil fuels, four times higher than the International Energy Agency’s estimate. Separate country profiles on fossil fuel subsidies in each of the G20 countries have also been compiled. (An Excel spreadsheet of the data is also available for download.)

 

 

India’s Electricity Sector TransformationInstitute for Energy Economics & Financial Analysis, November 2015. (Pdf)


This report details the dramatic growth in investments in the Indian renewables sector this year and sketches how this will undermine demand for imported coal. (A blog outlining the key findings of the report is here.)