December 21, 2016
Issue 164  |  View Past Issues
CoalWire

Editor's Note

2016 has been a year of dramatic changes - for both good and bad.

The rise and rise of wind and solar power is dramatically reshaping the energy landscape. Renewables now routinely shatter previous low price records and, in part aided by the divestment movement, have led to an increasing number of financial institutions willing to back clean energy. Utilities, some enthusiastically and others more grudgingly, are being forced to drop coal plants as their default option. 

As the mid-year data from the Global Coal Plant Tracker shows, numerous new plant proposals around the world are being defeated by persistent grassroots activism which insists on cleaner air and water and the protection of agricultural land.

The dramatic shifts underway in India and China suggest the decline of coal may happen far faster than previously thought possible.

However, the coal industry has a huge amount of residual political power that dissipates slowly. In many countries with proposed new coal plants and mines – such as Turkey, the Philippines, Vietnam, Indonesia, Myanmar, Thailand and Colombia – standing up for clean air and water, the protection of farmlands and a safe climate is far from easy. Even so, in many of those countries advances are being made which we can only hope accelerate in 2017.

For many people in many parts of the world, 2017 is shaping up to be a scary year. New political forces taking shape pose a new challenge to world security and to the stability of the global climate. However, what is also increasingly clear is that the transition to renewable energy is inevitable, regardless of who is in power. Progress can and will be made in continuing the shift away from polluting fossil fuels.

In the meantime, CoalWire will be taking a short break and will resume on January 12. Best wishes for the New Year.

Bob Burton

Top News

Israeli agency recommends cancelling coal plant: The Israeli Electric Corporation’s latest quarterly financial report reveals that in November the Israel Public Utility Authority for Electricity – the national electricity industry regulator – recommended to the Minister of National Infrastructures, Energy and Water that the proposed 1260 megawatt (MW) ‘Project D’ coal plant be cancelled. (Israeli Electric Corporation, CoalSwarm)

Obama Administration finalises stream protection rule: The Department of the Interior has finalised the Stream Protection Rule which increases restrictions on pollution of waterways with heavy metals such as mercury, selenium, and arsenic from coal mining operations. The rule comes into effect the day before President-elect Donald Trump is sworn into office. While seen by environmentalists as a compromise, the rule is opposed by the coal industry and will be targeted by the incoming Trump Administration and the Republican-dominated Congress. (Reuters, Sierra Club)

Over 400 NGOs call for end to coal projects: Four hundred and twenty two civil society groups in Myanmar have called on the recently-elected National League for Democracy government to scrap plans for both coal and hydro projects and ensure public participation in the development of the country’s energy policy. While unofficial sources have indicated no new coal plants would be approved, the NLD has yet to officially reveal its policy. Myanmar has over 14,000 MW of new coal plants proposed or permitted. (Frontier Myanmar, Global Coal Plant Tracker)

World Bank ducks responsibility for social impacts of Kosovo mine: Residents of the village of Hade displaced by the Sibovc lignite mine in Kosovo will take their case to the European Court of Human Rights after the World Bank failed to take action on a damning review of the effects of the mine expansion. The World Bank is currently considering whether to fund the proposed New Kosovo plant near Hade. (Climate Home)

Colombian coal activist receives death threats: Jakeline Romero, a leading indigenous rights leader and critic of the Cerrejon coal mine, recently received a death threat aimed at her and members of her family. The message, left on her personal mobile phone, arrived when Romero was in the city of Cartagena assisting a working group on the right to free, prior and informed consent for indigenous communities. The Cerrejon mine is co-owned by BHP Billiton, Anglo American and Glencore. (London Mining Network)

“Our customers mining for coal, oil and gas, as well as those in coal-fired electricity generation, and related industries, are increasingly exposed and may experience transition risk as a result of decreasing demand for fossil fuels and increasing demand for clean energy,”

stated ANZ, one of Australia’s largest banks, in its Corporate Sustainability Review 2016.

News

Australia: While Queensland Opposition Leader, Lawrence Springborg, flew on Adani private jet during India tour.

Germany: Court rejects Peruvian’s case against RWE over risk from melting glacier, but appeal likely.

Mozambique: Driver of coal train injured in latest rebel attack on Sena railway line.

UK: The Kellingley mine, which closed last year, is to be reborn as 5 MW solar farm.

US: Chairman of Mississippi Public Service Commission vows to hold Kemper CCS project to cost and performance promises.

“Photovoltaic (PV) [solar] costs are essentially on par with wind and, as recent tenders for power contracts have demonstrated, PV can now out-compete fossil-fuelled projects on price,”

states Bloomberg New Energy Finance in its Climatescope 2016 report.

Companies + Markets

Solar zooms in on domestic Indian coal power: The consultancy company McKinsey estimates solar power could be competitive with domestic Indian coal plants by 2019 if costs keep falling by 15 per cent a year; and the tax on coal is increased from its current level of about US$5.90 to just over US$8.80 a tonne. Even if solar prices fall by just 10 per cent and the effect of the tax on coal is ignored, solar is expected to be cheaper than coal by 2022. India’s Minister for Power, Piyush Goyal, has stated solar is already cheaper than imported coal. (McKinsey)

ANZ signals wariness of new coal funding: Shayne Elliott, the chief executive of ANZ – one of Australia’s biggest banks – said the company’s coal loans are falling and “I can’t see a time where we’d suddenly see that trend shift.” His comment, which has been interpreted as an oblique signal ANZ may not fund Adani’s proposed Carmichael coal project, was made after the company’s annual general meeting at which there were numerous questions about the company’s potential funding of coal projects. In September 2015 National Australia Bank, one of the other ‘big four’ Australian banks, ruled out financing Adani’s Carmichael project. (Guardian, Market Forces)

China coal lending restrictions: China’s central bank and corporate regulators have issued a guideline requiring banks to end making loans to loss-making companies in the steel and coal sectors due to massive over-capacity. Central Chinese government regulators are struggling with a credit bubble caused by continued investment in the coal and steel sectors due to ongoing support from provincial governments. (Xinhua, Sydney Morning Herald)

Pakistan backtracks and allows another imported coal plant: The Pakistan Government has bowed to lobbying by the Hub Power Company (Hubco) and overturned the policy it announced in October blocking the development of further imported coal plants. Under the former policy one of Hubco’s two proposed 660 MW plants was ruled out. The Pakistan Government, which is facing an election in mid-2018, has pinned its political hopes on the quick construction of a raft of Chinese-funded energy projects. Pakistan has 18,408 MW of proposed coal plants. (Express Tribune, Wall Street Journal) [Paywall]

Japan and Philippines propose baseload market for coal: A Ministry of Trade report has proposed the establishment of a market for baseload power by 2019/20 to cater for energy retailers wanting to buy coal, nuclear and hydro power from incumbent regional monopolies rather than rely on gas power. The generators, which want predictable revenues for their old baseload plants, have complained the growth of renewables has undermined the attractiveness of investing in new fossil fuel plants. In a similar move the Philippines Energy Secretary, Alfonso G Cusi, recently proposed the scrapping of the policy of capping generation from coal, gas and renewables at 30 per cent each and instead proposed a requirement that would see 70% baseload, 20% mid-merit and 10% peaking power. (Reuters, BusinessWorld)

Call for coal export duty on Russian thermal coal exports: RusHydro, a majority owned Russian Government power utility, has called for the imposition of a coal export duty on thermal coal exports. While RusHydro predominantly operates hydro plants, it also runs 28 coal plants, mostly in Russia’s Far East. The recent increase in the price of thermal coal exported to the Asian market has pushed domestic coal prices higher, leading RusHydro to complain the increase in domestic power prices covers half the increased fuel costs. (Newsbase)

Resources

Beyond Fossil Fuels, McKinsey Company, December 2016. (Pdf)

Half of this 30-page report analyses key trends with solar power and concludes it is already cheaper than oil and gas power and – where it is not already beating coal on price – is rapidly closing in on it in countries such as India where there is domestic coal.