CoalWire 135, May 26, 2016

May 26, 2016

editor’s note

It has been another eventful week. The Sri Lankan Government stated it plans to drop a coal plant while some major Norwegian political parties signalled they want to eliminate all investments by the sovereign wealth fund in coal companies. As alarm grows over India’s worsening air quality, a new Greenpeace India analysis demonstrating coal’s role is likely to increase pressure on the Indian Government to enforce new pollution control standards. However, holdouts in the global switch to renewables remain with Vietnam cutting  – but not substantially backing away from – its big coal building plans.  A new report also reveals major G7 countries Japan and Germany continue to finance new international coal projects even though the coal-booster consultancy Wood Mackenzie has finally conceded thermal coal’s boom days are over. To cap the week off, the CEO of Murray Energy summed up the glum mood in the US coal industry by concluding “I don’t think it will be a thriving industry ever again.”

Bob Burton

features

Vietnam needs a 21st century electricity plan

While Vietnam has the potential to rapidly increase its solar, wind and non-hydro renewables capacity, the country’s current Power Development Plan remains very coal-centric, writes Nguy Thi Khanh in RenewEconomy.

Tweet: #Vietnam needs a 21st century electricity plan not reliance on #coal @Khanhdragon @reneweconomy https://t.co/nKx1jFgL9R

Coal-fuelled ‘airpocalypse’ is not the future Indonesians want

The ‘airpocalypse’ crisis in China and the worsening air pollution in India should serve as a warning that Indonesia should avoid embracing coal power plants, writes Hindun Mulaika from Greenpeace Indonesia in the Jakarta Post.

Tweet: #Coal-fuelled ‘airpocalypse’ is not the future we want http://bit.ly/20mavuU @GreenpeaceIndo #Indonesia

Some G7 Countries Still Providing Billions in Financing for Coal Plants

Japan remains the worst offender for bankrolling coal plants amongst G7 countries according to a new report. Japan, which will host the 2016 G7 meeting this week, provided $22 billion in coal financing from 2007 to 2015. Germany comes in second, providing $9 billion during the same period. Japan is considering nearly $10 billion in future coal projects, writes Han Chen from Natural Resources Defense Council.

Tweet: Since ‘07, @JapanGov financed $22bn in #coal plants around world, most of any @G7 country: http://on.nrdc.org/1Tr51QH @JPN_PMO @AbeShinzo

top news

Sri Lanka seeks to dump Sampur coal plan: The Sri Lankan Government has informed the Indian Prime Minister Narendra Modi it wants to switch NTPC’s proposed 500 megawatt (MW) Sampur coal plant to gas. Accounts of Modi’s reaction differ, though reports suggest any additional construction costs will be borne by the Sri Lankan Government. Part of the proposal is to also build a 283 km high voltage transmission line, including a 39 km submarine cable interconnector to the Indian grid. A final decision on the proposed switch to gas is likely within a month. (The Nation, Sunday Times)


Coal a big driver of India’s air pollution crisis: Satellite data reveals India’s coal plant building boom between 2009 and 2015 resulted in a 13 per cent increase in PM2.5 levels and a 31 per cent increase in sulphur dioxide (SO2) pollution. Earlier research revealed a 20 per cent increase in nitrogen oxides (N0x) emissions. The satellite data indicates major coal power station clusters correlated with high SO2 and N0x pollution levels. While India introduced new plant emissions standards for SO2 and NOx in December 2015 to be phased in over two years, only one-tenth of current coal plants have sulphur dioxide pollution control equipment installed. (EnergyDesk, DNA)


Norwegian wealth fund may tighten coal restrictions: Major Norwegian political parties have signalled their intent to tighten restrictions next year on coal investments by the US$850 billion sovereign wealth fund. Current guidelines allow the fund to invest in companies which earn less than 30 per cent of revenue from coal, such as BHP Billiton and Rio Tinto. “Our ambition is to get the fund out of coal,” said the Labor Party’s Torstein Tvedt Solberg. (Bloomberg)

Engie flags closure or sale of Hazelwood:The CEO of utility Engie, Isabelle Kocher, has told a French senate committee the government-owned company is considering the closure or sale of the Hazelwood mine and power station in Australia. The power station is Australia’s most polluting plant while in early 2014 a fire in the Hazewlood mine burned for 45 days. A Royal Commission into the fire estimated it had caused deaths in the smoke-affected communities. The Victorian Government has since substantially increased rehabilitation bonds on all coal mines in the state. (Reuters)


Thai regime lobbies for university support for coal: A Thai military commander has written to the President of Prince of Songkla University and, after noting some university personnel might protest against coal plants proposed in the country’s south, asked that he “educate those personnel about the construction process of the power plant.” Prasitchai Noonual, a lecturer at Prince of Songkla University and a coordinator of the Save Andaman from Coal Network, believes the letter is aimed at silencing critics of the projects. (Prachatai)


US coal export plan concealed real size from regulators: Documents obtained as part of a legal challenge to the proposed Millennium Bulk Terminals coal terminal in Washington reveal company executives told state regulators the capacity of the project would be 4.5 million tonnes a year even though the plan was to expand it to four or even 12 times that volume. In an October 2015 memo a company executive proposed delaying telling state regulators of the expansion plan by at least two months or “Millennium will be perceived as having deceived the agencies.” (New York Times)

“Coal-to-chemicals plants produce 6-10 tonnes of CO2 per tonne of chemicals. These are massive CO2 machines that make chemicals as a sidestream,” said Olivier Thorel, vice president of global intermediates and ventures at Shell Chemicals.

news

Colombia: As prices slide, coal exports fall by 7.3 per cent in first quarter of 2016 compared to 2015.


Myanmar: Villagers demand the closure  of expanding mine in Shan state which threatens village.


Pakistan: Cement producers lobby for axing of duties in bid to keep coal competitive.

Poland: Greater restrictions imposed on wind farms to cut competition for loss-making coal plants.


Romania: Government agrees to negotiate with villagers over relocation and compensation.


US: Office of Surface Mining Reclamation and Enforcement calls for public comment on self-bonding.

companies + markets

US coal boss bets thermal coal demand will collapse: The CEO of Murray Energy, Robert Murray, has estimated that US coal production will collapse from the current 725 million tonnes in 2015 to as low as 454 million tonnes by an unspecified date. Murray also had a meeting in which he counselled Republican US Presidential candidate Donald Trump that it “was not possible” to simply reopen mines. “I don’t think it will be a thriving industry ever again,” Murray said. (Platts, SNL)


China’s banks outspend major western multilateral banks on coal: A study by US and Chinese academics has found between 2007 and 2014 two Chinese banks – the China Development Bank and the Export-Import Bank of China – spent US$118 billion on international energy projects, marginally less than the combined energy loans of the World Bank, the Asian Development Bank, the Inter-American Development Bank and the African Development Bank. However, two-thirds of the two Chinese banks’ lending was for coal projects. (Financial Times)


Major Philippines energy investor rules out coal: Federico Lopez, the influential chair and CEO of First Philippine Holdings, has ruled out building, owning or investing in any coal power plant. Lopez dismissed power industry arguments that increases in Philippines emissions would make little difference at a global level. “Given what we know about global climate today, that assertion, even if we choose to adopt such a parochial–Philippines only–perspective, is downright thoughtless and unconscionable,” Lopez said. (Inquirer)

WoodMac backtracks on thermal coal:Coal industry consultancy Wood Mackenzie has conceded the thermal “coal bubble has burst” and “today’s unhealthy markets requires structural, not cyclical, change.” Wood Mackenzie’s comments signal a retreat from the consultancy’s previous bullish estimates, for example, that US coal exports would reach 454 million tonnes by 2030 when it is currently less than one-tenth that and falling. (Wood Mackenzie, IEEFA)


European energy utilities slash asset values: A dozen of Europe’s largest energy companies have written down the value of their assets by over US$33 billion in 2015, in large part due to the declining viability of conventional power plants as renewable capacity increases. The analysis by Jefferies states that since the start of 2010 the utilities have written off US$117 billion. Further write downs appear inevitable with RWE – which has 40,000 MW of generation capacity with a majority of it from coal – valuing the “goodwill” on its assets at US$13 billion when the current market capitalisation of the company is only US$8 billion. (Financial Times)


Moody’s downgrades outlook for Adani as Indian imports fall: The ratings agency Moody’s has downgraded the outlook for Adani’s ports subsidiary to “negative” as lower Indian coal imports affect the company’s profitability. Adani is facing problems on another front too as its power subsidiary announced in mid-May that it had shut 2640 MW of its 3300 MW Tiroda Plant in Maharashtra “due to acute water shortage.” (Moody’s, Adani Power)

resources

Out of sight – how coal burning advances India’s air pollution, Greenpeace India, May 2016.

This 32-page report provides a detailed analysis of how the rapid expansion of coal-fired power generation over the last decade has contributed to India’s rapidly growing air pollution crisis.

Tweet: Major new report reveals how #India’s #coal power plant boom is driving air #pollution crisis bit.ly/1VgklPl


Drummond and paramilitary violence in Colombia, BankTrack, May 2016. (Pdf)

This 22-page report investigates how the seven banks which provided loans to Drummond for its notorious coal operation in Colombia have fulfilled their responsibilities under the UN Guiding Principles on Business and Human Rights. Only one – BNP Paribas – has suspended finance.

Tweet: Of #Drummond’s seven bankers, only @BNPParibas has suspended finance; most gave non-responses #bloodcoal http://bit.ly/1WUassn


Ready for CCS retrofit: The potential for equipping China’s existing coal fleet with carbon capture and storage, International Energy Agency (IEA), May 2016. (Pdf)

This 100-page report promotes the benefits of China retrofitting CCS to as much as 310,000 MW of coal plant capacity.

 

 

Swept Under the Rug: How G7 Nations Conceal Public Financing for Coal Around the World, Natural Resources Defense Council, Oil Change International, WWF, Kiko Network, Japan Center for a Sustainable Environment and Society and Friends of the Earth Japan, May 2016. (Pdf)

This 12-page report finds that between 2007 and 2015, the G7 countries have provided more than $42 billion of public finance for coal with Japan and Germany currently the biggest lenders.


The Role of Coal for Energy Security in World Regions, Coal Industry Advisory Board (CIAB) to the International Energy Agency, May 2016.

This report by the CIAB, a coal industry lobby group, argues that high efficiency coal plants or those fitted with Carbon Capture and Storage (CCS) or complement the increased role of solar and wind in the major existing coal consuming countries.