November 9, 2017
Issue 207  |  View Past Issues
CoalWire

Editor's Note

As the United Nations (UN) climate negotiators gathered in Bonn, thousands of people marched through the streets to demand that Germany commit to phasing out coal power. In a separate protest thousands of people occupied RWE’s nearby Hambach lignite mine. Germany, a renewable energy pioneer, remains a coal phase-out laggard. Ahead of the UN climate summit the CEO of Norway’s largest private pension fund ridiculed the World Coal Association for lobbying for more coal plants. More efficient coal plants, he wrote, are “death factories”. In India and Pakistan, air pollution crises are gripping major cities, further sharpening debate over coal power.

Elsewhere, the coal dream is fading. In New Zealand, the new government has announced it will block new coal mines on public conservation land. In the US a power utility is seeking approval for earlier retirement of an old coal plant because wind power is now so cheap. In its annual update on US power generation costs, Lazard notes that even the most expensive unsubsidised solar and wind projects now generate power for less than the cheapest coal plant. Across the Canadian border, economics is catching up with Carbon Capture and Storage (CCS) projects too, with SaskPower set to abandon its dream of rebuilding two old coal units with the expensive technology.

Bob Burton

Features

Coal, the killer investment

The finance sector should divest from the coal industry “given its role in air pollution and a widescale public health disaster,” writes Jan Erik Saugestad, the CEO of Storebrand Asset Management, Norway’s largest private pension fund.

The cost of coal in Colombia

The development of the Cerrejon mine in Colombia — jointly owned by BHP, Glencore and Anglo American — and its demand for water has had a profound impact in the indigenous Wayuu people, writes Tim Ball in Politico.

Campaigns

New Zealand bans new coal mines on public land

The New Zealand Government has announced it will ensure public land set aside for conservation will be off limits for new mining projects. The announcement will specifically affect proposed open-cut coal mines on the West Coast of New Zealand’s South Island. After the September 2017 general election the Labour Party reached a coalition agreement with the New Zealand First party to form a minority government with the support from the Green Party of Aotearoa/New Zealand. Eugenie Sage, the Minister of Conservation and a Green MP, said “coal mining adds to the climate crisis” and that New Zealanders expected public conservation land to be protected. The ban will affect several proposed projects including one by Stevenson Mining. The company has proposed to remove the top of the mountain known as Te Kuha, which is public conservation land and part of a local council’s water conservation reserve. (NZ Minister of Conservation, Forest and Bird)

Top News

Coal protests marks start of UN climate talks: Up to 25,000 people marched through the streets of Bonn demanding that Germany phase out coal power. In a separate protest over 1000 people occupied RWE’s Hambach lignite mine. The protests were held ahead of the restart of international climate negotiations in Bonn. In 2016, 40 per cent of Germany’s electricity came from coal plants with a further 23 per cent from lignite plants. The German Greens have insisted that without a coal phase-out plan they will not support a coalition government led by Angela Merkel. However, they have flagged they will compromise on their stated target phase-out date of 2030. (Deutsche Welle, Guardian)

Air pollution crisis grips Indian capital: The Indian Medical Association has declared a public health emergency as PM2.5 fine particle air pollution in Delhi, India’s capital, was recorded at the US Embassy website at over double the levels classed by the Indian Government as hazardous. The origin of Delhi’s air pollution includes cars, burning agricultural waste and coal plants in adjoining states. Delhi’s smog is expected to last for at least several days. (Guardian)

Pakistan opposition leader warns against coal plant pollution: As extreme air pollution gripped parts of Pakistan, the Opposition Leader in the National Assembly, Syed Khursheed Shah, has called for the cancellation of the Chinese-backed 1320 megawatt (MW) Sahiwal plant. Shah warned that pollution from the plant, which was commissioned earlier this year despite strong community opposition, would cause the deaths of residents. In response to a petiition before the Lahore High Court, the Punjab Government stated that there was no data on current pollution levels. (Express Tribune, The News)

Queensland Government pledges to block Adani loan: Queensland Premier Annastacia Palaszczuk has vowed that if her party is re-elected the Queensland Government will veto Adani’s application for a loan of up to US$700 million (A$1 billion) from the Australian Government’s Northern Australia Infrastructure Facility for the proposed Carmichael mine. The election is being held on November 25. An opinion poll of 1652 Queensland voters has revealed that 70 per cent oppose a taxpayer loan for Adani’s project. (Guardian, Brisbane Times)

Indian power plant explosion kills 37: A massive boiler explosion at a newly commissioned NTPC coal plant has killed 37 workers and resulted in the hospitalisation of over 50 more, many with serious burn injuries. The 500 MW unit at NTPC’s Feroze Ghandi Unchahar plant was commissioned in March and brought into commercial production in September. Engineers at the plant reported a problem with the ash evacuation system which was detected an hour before the explosion but operators were under pressure to keep the plant running for NTPC’s 42nd anniversary celebrations on November 7. (TimesNow, Times of India)

South African parliamentary committee told of slow investigation of coal scam: A business rescue practitioner, Piers Marsden, told a parliamentary committee that in July 2016 he informed the South African anti-corruption agency of Eskom’s role in funding the purchase of the Optimum coal mine by the Gupta-linked company, Tegeta Energy and Resources. Despite this, Marsden said that other than being requested to submit an affidavit, he wasn’t contacted by the agency until late October 2017. One of the opposition parties has called for parliament to end Tegeta’s coal supply contract with Eskom, even though the Gupta family sold the company to a little known Swiss company in August. (City Press, Times Live)

“The [coal] industry’s smog, acid rain, toxic mercury, and fine particles enter deep into our lungs and no amount of greenwashing can ever change that,”

writes Jan Erik Saugestad, the CEO Storebrand Asset Management, Norway’s largest private pension fund.

News

Australia: Community rejects third attempt by Korean company to establish Wallarah 2 mine in water catchment.

India: Amid growing alarm over Goa coal dust, Railways Minister pledges to consider covered wagons.

Jamaica: Alumina refinery drops plan for 230 MW coal plant, opting for LNG power instead.

Philippines: Twenty families seek emergency shelter from coal ash pollution from Concepcion coal plant.

Russia: Japan’s Itochu agrees to buy thermal coal from Mechel’s New-Olzherasskaya mine.

Taiwan: After being rescued from grounding, Panamanian-registered coal ship broke free from tow and drifted for three days.

Taiwan: Greenpeace calls for details on government aim to cut coal power from current 45 per cent to 30 per cent by 2025.

US: Detroit City Council bans open-air storage of coal and petcoke following alarm over dust pollution.

Companies + Markets

Leaked documents shine light on Glencore currency deals: Leaked internal Glencore documents have revealed that the company, which is the world’s largest coal exporter, converted A$25 billion (US$19 billion) from Australian dollars to US currency via a currency swap arrangement with one of its Australian subsidiaries. Tax authorities are clamping down on the use of currency swaps which, while legal, can be used to shift profits to tax havens. Other leaked documents revealed how Glencore concealed its major shareholding in a global shipping company, SwissMarine. One of the other shareholders and director of SwissMarine was facing fraud and money laundering charges. (Guardian, Australian Financial Review [paywall])

Rebuff for Polish coal cash grab: Seven European Union (EU) countries have expressed opposition to a bid by Poland to revise the rules governing the Emissions Trading System (ETS) to allow up to US$34 billion (€29 billion) from the clean energy fund to be used to subsidise old coal plants. The UK, France and Germany — with support from Sweden, Denmark, the Netherlands and Luxembourg — expressed support for using ETS funds to accelerate a switch to clean energy, and for a EU Parliament proposal for excluding funding from projects which emit over 450 grams of carbon dioxide per kilowatt hour. An EU vote on the proposal is scheduled for November 8. (Climate Home)

Saskatchewan cools on plans for more CCS coal units:  SaskPower, a government-owned utility, is “highly unlikely” to recommend the construction of two further CCS units at its Boundary Dam plant. In late 2014 SaskPower commissioned the world’s first commercial CCS unit on its 140 MW Boundary Dam Unit 3, which cost C$1.5 billion (US$1.2 billion). The lignite plant, which has been plagued with technical problems, now generates power at about double the cost of other generation options. (CBCNews, CBCNews)

Wind claims another coal victim as costs keep falling: The Empire District Electric Company has requested approval for the early retirement of the 213 MW Asbury Generating Station and the construction of 800 MW of new wind power capacity. Empire argues wind power is one-third cheaper than continuing to operate the coal plant. Lazard, a major energy consultancy, estimates the cost to produce wind power in the US at between US$30 and $60 per megawatt hour (MWh) and utility scale solar at between US$43 and $53 per MWh. It estimates coal power at between US$60 and $143 per MWh. (POWER Magazine, Lazard)

Resources

Europe Beyond Coal, Climate Action Network Europe.

This new website provides resources and data on the push to phase out Europe’s 293 existing coal plants.

European coal: the beginning of the end?, Argus Media, November 2017. (Pdf – registration required)

This 10-page briefing paper provides a useful overview of current coal phase-out plans in the European Union.

The Alternative Power and Energy Plan for Bangladesh, National Committee to Protect Oil Gas Mineral Resources Power and Ports, Bangladesh, July 2017. (Pdf)

This 35-page plan, which promotes renewables and gas power, has been drafted as an alternative to the Bangladesh Government’s bias towards coal and nuclear power plants. Comments are welcome.

“Metallurgical Coal: Will Mozambique's Potential be Fulfilled?”, AMR Research, November 2017.

This article provides an overview of major, though financially risky, plans for expansion in metallurgical coal exports from Mozambique.