June 15, 2017
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The big news of the week is BP’s declaration of a “decisive” global shift away from coal in 2016. Greenhouse gas emissions from the energy sector are also flat or declining for the third year in a row. 

Shifts are occurring elsewhere too. Japanese commodity trading companies are pulling back from thermal coal while the shift of major banks away from further coal lending is increasing pressure on Polish utilities to scrap proposed plants. To cap it off a senior executive of the Asian Infrastructure Investment Bank has insisted it will not fund coal plants.

While the shifts are welcome news, the pollution impacts of the industry grow worse in many countries. In India the Central Electricity Authority is proposing to give almost 300 coal units years more to comply with new pollution control standards – despite a widespread deadly air quality problem. In Bangladesh, fisheries managers are alarmed at the likely impact of a Chinese-backed coal plant on an important food fish. In Greece, a massive mine collapse has all but sealed the fate of a nearby village, while in Bulgaria a village is struggling to have its concerns about pollution impacts taken seriously.

Bob Burton

Features

The village in Bulgaria which wants to “move” to cut pollution levels

After years of trying to get the coal power plant in Golemo Selo village in Bulgaria to cut pollution levels, village leaders want a referendum on “moving” to a neighbouring municipality where they think their concerns will be taken more seriously, writes Ioana Ciuta from CEE Bankwatch Network.

“Pit-to-Plug Strategy” Is Fraying at Both Ends

Adani’s current rationale for its Carmichael mine of exporting coal for use in its own power stations is evaporating as the Mundra plant in India loses money and banks won’t fund the company’s mine and rail infrastructure plan, writes Tim Buckley from the Institute for Energy Economics & Financial Analysis.

Top News

BP says coal’s decline structural: In its latest annual energy overview BP estimated coal use dropped by 1.7 per cent in 2016, in part due to major changes in China. However, the report states “at the heart of coal’s decline are the longer-run trends we see across the world, moving towards cleaner, lower carbon fuels.” BP estimates greenhouse gas emissions from the energy sector grew by just 0.1 per cent, marking 2016 the third year in a row in which emissions were flat or declined. (Guardian, BP)

Alarm over coal plant risk to Bangladesh fish sanctuaries: Scientists fear the construction of a proposed 1320 megawatt (MW) Payra coal plant could jeopardise two of five declared sanctuaries for ilish, an important food fish in Bangladesh. Coal for the joint-Bangaldeshi-Chinese project is proposed to be imported via the Golachipa River, the migration route for the fish. A senior scientist at the Bangladesh Fisheries Research Institute warns the plant “will definitely” affect the sanctuaries, with the Department of Fisheries expressing concern about the effect of pollution on water quality. (Dhaka Tribune, CoalSwarm)

Call for Kenyan Government to release Lamu documents: The Kenya for Justice and Development Trust has called on the Kenyan Government to publicly release the Power Purchase Agreement and any loan agreements for the proposed Lamu plant – or face legal action. The group is concerned   government-owned Kenya Power may have entered into potentially financially crippling agreements. It argues Kenya is likely to face a major oversupply given other hydro and geothermal projects are underway. (The Star)

Australian Parliament amends native title laws to mollify Adani: The Australian Parliament has amended native title laws to allow agreements with a majority of traditional owners to be sufficient to secure Indigenous Land Use Agreements for development projects. The amendments, demanded by Adani, other mining companies and some traditional owners, nullify a recent Federal Court of Australia case which determined unanimous agreement of traditional owners was required for agreements to be valid. The Wangan and Jagalingou (W&J) Family Council, traditional owners of the Carmichael mine area, have four legal challenges against Adani’s proposed mine. (SBS, Buzzfeed News)

Canadian company fined over massive coal mine spill: Prairie Mines & Royalty has been fined US$2.6 million for the 670 million litre wastewater spill caused by the October 2013 collapse of a tailings dam at its Obed Mountain mine in Alberta. The company, which is a subsidiary of Westmoreland Coal, pleaded guilty to breaches of federal fisheries and environmental laws. It has also been fined US$696,000 for breaches of provincial laws. (Edmonton Journal)

Greek mine collapse triggers evacuation of village: The village of Anargyroi has been evacuated after an estimated 80 million tonne landslide from the nearby lignite mine of the government-owned Public Power Corporation (PPC). Six years ago it had been agreed the village would be relocated but, following the national financial crisis in 2008, the proposal was not implemented. The mine supplies coal to PPC’s 600 megawatt (MW) Amyntaio plant. The landslide damaged mine equipment and has covered part of the lignite reserves of the mine. (Independent, CoalSwarm)

India delays new pollution standards: The Central Electricity Authority (CEA) is pushing the Ministry of Environment to  drop the December 2017 deadline for an estimated 295 coal power units to comply with pollution control standards intended to cut water use, fine particle pollution and sulphur dioxide and nitrogen oxide emissions. The CEA proposes power generators should have until between 2020 and 2024 to comply with the new standards, despite the widespread air pollution crisis gripping large areas of the country. (Economic Times)

Indian coal promoter arrested over defaults on bank loans: The Central Bureau of Investigation (CBI), India’s anti-corruption agency, has arrested Manoj Jayaswal and his son, Abhishek over allegations the pair’s Abhijeet Group defrauded two banks over a proposed 1320 MW plant at Banka in Bihar state. The two – along with a manager from one of the banks – will be held for eight days during which CBI will interrogate them over the alleged fraud. (The Indian Express, Times of India)

“There are things it won't finance, like coal-fired power plants,”

said Thierry de Longuemar, the vice president of the Asian Infrastructure Investment Bank, on the bank’s lending strategy.

Asian Infrastructure Investment Bank exec says it "won't finance" #coal-fired power plants #energy #climate #AIIB http://www.manilatimes.net/china-led-aiib-boasts-rising-lending-power/332864/

News

Europe: Polish Member of the European Parliament proposes weakening energy efficiency directive to promote coal.

India: Coal India plans to close 37 loss-making underground mines by early 2018, affecting 11,000 employees.

Mozambique:  Coal India seeks new exploration block with pledges of new rail and private port infrastructure.

Pakistan: For a quick build, a Chinese-backed 878 kilometre transmission line comes at a high price.

US: Concern Peabody Energy’s reclamation bonds aren’t sufficient to clean up coal mine in Arizona.

US: Californian teachers’ pension fund divests from Adaro Energy, Exxaro Resources and Whitehaven Coal.

Companies + Markets

New French President floats higher carbon floor price: The newly elected French President, Emmanuel Macron, has proposed to Germany the floor price in the European Union’s Emissions Trading Scheme be increased to €30 (US$33.55) per tonne of carbon dioxide emissions, about six times higher than the current price. Macron officials are hoping to pursue the proposal after Germany’s general election in September. Germany has previously resisted measures which would affect the coal-dependent utilities RWE AG and Uniper SE. (Bloomberg)

Polish coal struggles to find finance: The increasing difficulty of Polish power utilities in attracting finance for coal investments is pushing some industry executives to urge the pro-coal government to moderate their opposition to European Union’s (EU) policies aimed at cutting the use of high-emissions fuels. The Polish cabinet recently proposed to the EU it would support the construction of a nuclear plant if it is allowed to keep building new coal plants. Poland has 4245 MW of coal plants under construction and a further 5820 MW proposed or approved. (Bloomberg, Global Coal Plant Tracker)

Eskom crisis escalates: The crisis gripping Eskom has escalated further with the resignation of Ben Ngubane, the chairman of the publicly-owned utility. No reasons for Ngubane’s resignation were given. Eskom is under investigation by Treasury while complaints against the utility’s coal supply contracts and other matters are being investigated by the government’s own anti-corruption agency. A backlash by African National Congress MPs recently overturned the board’s re-instatement of former CEO Brian Molefe, who resigned last year after a highly critical report by the public protector. Molefe is challenging his firing. (Bloomberg)

Japanese traders offload thermal coal assets: Mitsubishi has announced it will sell its minority interests to whichever of Glencore or Yancoal buys Rio Tinto’s Hunter Valley Operations and Warkworth thermal coal mines in Australia. The mines have a combined capacity of almost 25 million tonnes a year. Other Japanese commodity trading companies are also cutting thermal coal investments, in part due to concerns over climate change impacts. In 2016 Mitsui announced it would cut its thermal coal interests by one-third within three years while Sojitz is also looking to reduce its interests in the sector. (Reuters)

Mongolian power plans may hinge on Northeast Asia super grid: The prospects for the proposed 5280 MW Shivee Energy Complex in Mongolia may hinge on the development of a Northeast Asia super grid, which has been backed by State Grid of China and Japan’s Softbank. The notional super grid, touted as catering for coal and renewable power exports, would connect Mongolia to Russia, South Korea, China and Japan. A feasibility study of the Shivee Energy Complex, which is being undertaken by State Grid of China, is due to be completed by the end of June. (Bloomberg)

Resources

Risky Business: Will the Asian Infrastructure Investment Bank choose to avoid funding coal in India?,  Bank Information Center, July 2017.

This 16-page report outlines concerns a US$150 million equity investment in the India Infrastructure Fund by the Asian Infrastructure Investment Bank may be used to support coal projects which would undermine the bank’s stated commitment to the Paris Agreement.

Pipe Dreams, Greenpeace India, July 2017. (Pdf)
An analysis of India’s coal plants reveals the Indian Government’s policy of requiring coal plants within 50 kilometres of sewage plants to use treated water for cooling will do little to alleviate the water crisis affecting farmers and urban communities.