September 7, 2017
Issue 198  |  View Past Issues
CoalWire

Editor's Note

The fragility of the new coal plant building boom has been evident this week. Indonesia, which has plans for 20,000 megawatts (MW) of new coal plant capacity by 2019, has confirmed slower than projected demand growth has resulted in a growing power glut. In Vietnam, a member of an influential energy policy lobby group has warned the government over the economic and environmental costs of 20,000 MW of coal plants proposed to be built in the Mekong Delta. The South Korean government has announced it plans to refuse permits for new coal plants and require those under construction to be converted to liquefied natural gas (LNG).

Existing coal plants are under pressure to close too. Finland has flagged the introduction of legislation in 2018 to require the closure of its remaining coal plants by 2030. As Germany’s September 24 general election nears, the Deputy Economy Minister has confirmed the closure of 25,000 MW of coal and lignite plants will be required by 2030 to meet current climate targets.

Meanwhile, concern about the pollution impacts of coal mining and transport has sparked protests in Russia, opposition in the Indian state of Goa and bans on coal trucking in several major Chinese coal ports. In Australia, a major health study has flagged significant health impacts from the 45-day long fire at the Hazelwood coal mine.

Bob Burton

Features

The human cost of coal land grabbing in Mozambique

As the Brazilian mining company Vale has sought to press ahead with plans to build a massive new coal mine, the conflict with farmers has turned deadly, writes Burag Gurden in All Africa.

Goa residents campaign to stop coal port expansion plans

The residents of the coastal India state of Goa are struggling to stop massive port expansion plans being promoted by Adani, Jindal and Vedanta, writes Nidhi Jamwal in The Wire.

Protests grow over Russian coal pollution

As Russian coal companies have pursued new mining projects and increased exports into the Asian market through ports in the Far East this year, public protests against pollution have grown, writes Vladimir Slivyak in Endcoal.

Campaigns

South Korea vows to block new coal plants

South Korea’s Minister for Trade, Industry and Energy, Paik Un-gyu, has briefed President Moon Jae-in that the ministry plans to cut pollution and greenhouse gas emissions by refusing to issue permits for new plants, requiring any plants under construction to be converted to run on LNG and phasing out existing coal plants. The President has also proposed renewables generating 20 per cent of the country’s electricity by 2030. (The Korea Times)

Top News

To meet Paris Agreement target, Germany needs to halve coal fleet: Deputy Economy Minister, Rainer Baake, has flagged that Germany would have to shut 25,000 MW of coal plant capacity – equal to half the current coal fleet – to meet the country’s Paris Agreement 2030 emissions reduction targets. “This can be done in line with the law and without compensation,” Baake said.  (Reuters)

Chinese province to ban coal trucking at ports: In a bid to reduce air pollution, the northern province of Hebei has announced the trucking of coal will be banned at its ports from October. Hebei has some of the country’s largest coal terminals including Tangshan, Qinhuangdao and Caofeidian ports. Earlier this year the neighbouring city of Tianjin imposed limits on coal trucking and storage, which resulted in the volume of coal handled falling by over one-quarter in the first half of 2017. After the new restrictions in Tianjin came into effect, coal volumes shipped to Hebei ports increased. (Reuters, Reuters)

Colombian tribal leaders protest Cerrejon mine expansion:  Tribal leaders of the indigenous Wayuu people held a protest in Bogota, the country’s capital, against the proposed expansion of the Cerrejon thermal coal mine. In mid-August the Constitutional Court ordered a temporary halt to the Cerrejon Coal Company’s diversion of Bruno creek to more than double the amount of water available for use in the mine. The mine is jointly owned by BHP Billiton, Glencore and Anglo American. (Mining.com)

Finland plans to introduce law in 2018 to ban coal for power: The director general of Finland’s energy department, Riku Huttunen, has revealed Finland will introduce a law in 2018 to ban coal power by 2030 and increase carbon taxes. Huttunen stated the law would include “room for manoeuvre,” hinting coal plants could be kept available as reserve capacity. Coal currently accounts for about 10 per cent of the country’s power generation, with two new nuclear reactors scheduled to be commissioned in 2018 and 2024. (Reuters)

Study finds health impacts from Hazelwood mine fire: A preliminary study has found far higher levels of asthma, heart attacks and traumatic stress among 3,096 residents of Morwell affected by pollution from the Hazelwood mine fire compared to residents in the nearby town of Sale who were unaffected by the fire. Further study is being undertaken on cardiovascular and respiratory impacts on residents from the 45-day long mine fire. An inquiry into the fire recommended further health studies be undertaken after finding pollution was likely to have caused the deaths of some residents. (ABC News, Hazelwood Health Study)

Energy expert calls on Vietnam’s PM to cut Mekong Delta coal plans: The chair of the Energy Science Council of the Vietnam Energy Association (VEA), Nguyen Minh Due, has warned the proposed 14 coal plants in the Mekong Delta would bevery unsustainable.” The VEA is an influential lobby group comprising of retired energy industry professionals. Due warned the plants – with a combined capacity of 20,000 MW – would rely on imported coal and would force power prices up. In late 2016 the proposed 1200 MW Cai Cung coal plant near the mouth of the Mekong River was shelved after provincial officials stated they preferred renewable energy as it wouldn’t undermine plans for shrimp farming. (VietnamNet, CoalSwarm)

News

Australia: The CSIRO, a government-funded science agency, defends membership of coal lobby group.

Australia: NSW resources regulator to investigate whether KEPCO fit to hold mining licence after corruption scandals in South Korea and the US.

China: Illegal coal mining on Tibetan Plateau leaves legacy of pollution in nature reserve.

India: Goyal retains coal portfolio with promotion to Cabinet but loses new and renewable energy.

India: Four Jindal executives granted bail on charges over the allocation of Urtan North coal block in Madhya Pradesh.

Pakistan: KAPCO’s proposed 660 MW plant in Punjab put on hold due to push to increase LNG use.

South Africa: Eskom to sign renewables agreements pushing old coal plants closer to retirement.

US: Trump nominates former coal company CEO to senior role in Mine Safety and Health Administration.

Companies + Markets

Power glut poses challenge to Indonesian coal plant plans: Indonesia’s state-owned utility Perusahaan Listrik Negara (PLN) is facing a growing power glut as electricity demand in the first half of 2017 grew by only 1.17 per cent compared to the 8.3 per cent estimated in its latest power development plan. The prospect of lower than projected demand casts doubt on the government’s target of 35,000 MW of new plant capacity by 2019. The proposed additional capacity includes 20,000 MW of new coal plants. Faced with a growing glut, PLN has offered medium to large power consumers discounted tariffs for overnight consumption. (Jakarta Post)

Bank fined over Gupta’s coal deals:  South Africa’s Financial Intelligence Centre (FIC) has fined the Bank of Baroda South Africa US$851,000 for breaching anti-corruption and money laundering laws when it facilitated the March 2016 purchase of the Optimum coal mine by the Gupta family’s Tegeta Exploration and Resources. An audit of the Optimum-related transactions found the bank did not report the transactions to the FIC or verify the exact origin of funds it received for the deal. (Moneyweb)

Mundra restructured as uncertainty clouds Adani’s Carmichael royalties deal: Adani Power has moved to shift its loss-making 4620 MW Mundra plant into a new subsidiary in preparation for selling some or its entire stake in the project. Bloomberg estimates Adani Power has effectively valued the plant at just US$16.6 million even though it accounts for almost half of the company’s US$7.8 billion debt. The plant has been touted as a prime market for coal from Adani’s proposed Carmichael mine. While Adani claims the royalty subsidy agreement for the mine has been finalised, the Queensland Government insists it is still being negotiated. (BloombergQuint, Guardian)

Coal India drops Mozambique lease, looks to Australia: Coal India has confirmed it has relinquished its two metallurgical coal exploration leases in Mozambique after a feasibility study found mining was not viable. Due to the setback in Mozambique, the company has appointed an unnamed bank to assist it in buying metallurgical coal projects in Australia. (Moneycontrol, Coal India)

Indian analyst predicts fall in imports, climb in domestic coal: ICRA, an Indian ratings agency affiliated with Moody’s, estimates India’s thermal coal imports could fall from 147 million tonnes in 2017 to 97 million tonnes in 2022. While new coal plant capacity additions have slowed dramatically, ICRA estimates that even with electricity demand growing at 5 per cent a year, plant load factors may only increase marginally to 63 per cent by 2022. It estimates total domestic coal production could increase by almost 200 million tonnes by 2022. (Economic Times, ICRA)

Resources

Business Risks of New Coal-fired Power Plant Projects in Japan —The Decline in Capacity Factor and Its Effect on the Business Feasibility, Renewable Energy Institute, September 2017. (Pdf) (In Japanese here; Executive Summary here.)

This 35-page report finds Japan’s coal plant fleet is experiencing declining utilisation rates due to increased renewables and efficiency gains, trends that are likely to continue and undercut demand for 42 proposed coal plants.