CoalWire 22, 30th January 2014

A Lesson for Dr. Kim and the World Bank as It Ponders the Kosovo Coal Project

When Dr. Kim, President of the World Bank, and leaders of other international financial institutions ponder funding new coal power projects this year — like the one in Kosovo — there’s one word that should be seared into their memories: Sostanj,” write Justin Guay from the Sierra Club, Bob Burton from CoalSwarm and Sven Haertig from Bankwatch. The Sostanj power station has become a financial disaster for the Slovenian government.

Suggested tweet:  A lesson from #Slovenia for Dr. Kim and @worldbank as they ponder the#kosovo #coal project http://huff.to/1fnWlSJ

The heavy cost of India’s coal boom

“As India pursues its aggressive path of coal-powered industrialisation, its leaders are showing themselves willing to sacrifice millions of people and huge swathes of the country to a dark and uncertain future,” writes Sarah Stirk in The Ecologist.

Suggested tweet:  The real cost of India’s proposed #coal boom. See @the_ecologist http://bit.ly/1e4wLoZ

campaigns

Norwegian divestment proposal gains momentum

A proposal by the opposition Labour Party to review investments in coal by the US$815 billion sovereign wealth fund has won tentative support from two crucial minor parties. The chief executive of the fund, Yngve Slyngstad, told a parliamentary committee hearing on the proposal that “our investments in coal are limited and falling. They have been halved over the last two years.” Slyngstad said that the fund held US$406 million of stock in coal mining companies. The committee will decide by March 4 on whether to submit the proposal to parliament for a vote.(Reuters, Reuters)

top news

Protest against Australian mine escalates:A three-week long blockade of initial works for the Maules Creek mine in New South Wales has slowed work on the site and gained widespread media coverage. Police have arrested ten people during the blockade while, government agencies have manoeuvred to try and shut the protest camp down. (Sydney Morning Herald, Lock the Gate)


Bank probe of Tata Mundra financing: The Asian Development Bank (ADB) has decided to investigate policy violations associated with the financing of the 4000 megawatt (MW) Tata Mundra coal plant in India. The ADB has invested US$450 million in the project. ADB’s investigation follows a damning report issued late last year by the World Bank’s Compliance Advisor Ombudsman.(Association for the Struggle for Fishworkers’ Rights)

Scientists urge rejection of Great Barrier Reef dumping: Two hundred and thirty-three scientists have written to the Great Barrier Reef Marine Park Authority urging them to reject a request to dump millions of tonnes of dredging waste from a proposed coal terminal expansion in the marine park. “The best available science makes it very clear that expansion of the port at Abbot Point will have detrimental effects on the Great Barrier Reef,” the letter said. (ABC News)


Investigation into Scottish rehabilitation fund: East Ayrshire Council is considering disciplinary action against staff after an investigation found a shortfall of US$218 million for rehabilitation work needed at 22 coal mine sites. The investigation found that insurance bonds to cover rehabilitation were “not based on the actual estimated cost of restoration” but on estimates provided by the mining companies. (Herald Sunday)

“Throughout Europe, gas- and hard-coal-fired power stations in particular are under substantial economic pressure,”

said Peter Terium, the Chief Executive Officer of RWE, a major European utility.

news

Australia: Indian delegation visits Australia and New Zealand in search for coal projects.


China: Jinzhou port coal terminal expansion rejected on environmental grounds.


India: Protests over land compensation shuts National Thermal Power Corporation’s first mine.

India: Essar sues Greenpeace for damages over Mahan forest protest.


New Zealand: Coal unit mothballed and Indonesian coal imports cancelled.


Sri Lanka: Chinese-built plant didn’t operate for 271 of 1,086 days since commissioning.

“After three consecutive years of coal stocks underperforming the S&P [Standard & Poor’s 500 index of US companies] by at least 40% each year, we believe investors have largely given up on the sector,”

writes Paul Forward, an analyst with the US investment banking firm, Stifel.

companies + markets

Kenya shortlists firms for coal project:The Kenyan government has shortlisted ten companies to bid on a 960MW coal-fired plant on the coast near Lamu. The short-listed companies include Tata Power, Toyota Tsusho Corporation, Shanxi International Electricity Group and Mitsui. (Bloomberg)


European utility suffers big writedown:The European energy utility RWE has announced an additional US$4.5 billion writedown, with close to US$4 billion attributable to the reduced value of coal and gas-fired plants. The company stated the writedown was due to “the significant deterioration in earnings in the Continental European power plant sector.” In September 2013 RWE announced a US$1.2 billion writedown. (RWE, Bloomberg)


Norwegian pension fund divests from coal: Storebrand, a Norwegian pension fund and insurance company, has excluded ten utilities with the highest share of power generation from coal from its investment portfolio. Storebrand currently excludes a total of 23 companies from the energy and utilities sector based on their coal interests, and is now reviewing companies in the materials sector. (Storebrand)

Regulator urges greater scrutiny of coal sector loans: The China Banking Regulatory Commission has reportedly directed its regional offices to increase scrutiny of credit risks in the coal mining sector. Rainy Yuan, an analyst at Masterlink Securities Corporation in Shanghai, said that the market was “quite worried” about the coal industry. The warning followed concern that a failed coal project could trigger a crisis in financial markets. Market jitters led to banks and the Shanxi provincial government supporting the vulnerable financial trust which funded the project. (Bloomberg, China Spectator)


China coal consumption growth slows:The National Energy Administration has estimated that increasing energy efficiency, renewables and gas-fired plants will limit the increase in Chinese coal consumption to 1.6% in 2014 compared to 2.6% in 2013. Greenpeace notes that this is the “smallest rise in more than a decade.” (Platts,Greenpeace)

“Many power plants are beginning to worry about the inspections and have begun to switch to higher-quality coal with lower sulphur and ash content,”

an anonymous Beijing-based trader told Reuters.

resources

Energy Trend Tracker, Resource Media.This website aims to provide a central point for the most important recent developments on clean energy and coal in the US. It can also be followed on Twitter at @RMEnergyTracker.


The Social Costs Of Carbon? No, The Social Benefits Of Carbon, American Coalition for Clean Coal Electricity, January 2014. (Pdf)

A report from the US coal industry claiming that the benefits of coal far outweigh the costs. A brief critique of the report by Laurie Johnson from NRDC is available here.

take action

Tell the World Bank to stop financing dirty coal plants.

CREDO is seeking signatures on a petition to the President of the World Bank, Dr. Jim Yong Kim, urging an end to the bank funding coal plants. Add your name here.

Time for KfW to stop funding new coal projects

Klima-Allianz Deutschland and Urgewald have launched an online petition calling on the German government’s development bank, KfW, to stop funding coal projects, beginning with the Ptolemais V lignite power plant in Greece. Add your name here.