October 20, 2016
Issue 155  |  View Past Issues
CoalWire

Editor's Note

The big news of the week is the recommendation by an investigatory mission of the World Heritage Centre and International Union for the Conservation of Nature (IUCN) that the Rampal plant in Bangladesh be scrapped due to the risks it poses to the Sundarbans World Heritage site. In the past week other projects have suffered setbacks too, with two plants in Pakistan reportedly scrapped and a proposed coal port in Oregon losing its key backer.

There were also coal scandals aplenty this week. In China, in two separate cases two former government officials were sentenced to life in prison for accepting bribes: one for approving mines and the other for favours over coal company mergers. In the Czech Republic police are recommending charges against former officials relating to the 1990s’ privatisation and operation of a coal company. In South Africa debate has raged about the extent of influence of the controversial Gupta family – which has coal interests – on President Jacob Zuma’s government.

Bob Burton

Features

Coal price increase fuelled by unsustainable blips in China and India
The recent increase in seaborne coal prices has been driven by short-term changes in demand in China and India which are unsustainable, writes Tim Buckley from the Institute for Energy Economics & Financial Analysis.

Campaigns

Two coal plants in Pakistan scrapped
A community campaign has resulted in two proposed 660 megawatt (MW) coal plants in Muzaffargarh district in Pakistan being scrapped, say local sources. However, the cancellation of the projects has not yet been officially confirmed. The projects were opposed by villagers concerned about further pollution, impact on water supplies and displacement of farmers. There are already four existing power plants within a 30 kilometre radius. In May, the Private Power and Infrastructure Board determined that no new power projects based on imported coal would be approved. (Dawn, CoalSwarm)

Top News

UNESCO urges Rampal project be scrapped:  An investigation of the proposed 1320 MW Rampal plant by the World Heritage Centre and IUCN has concluded the project “poses a serious threat” to the Sundarbans World Heritage site. The agencies recommended the project “be cancelled and relocated to a more suitable location.” The National Committee for Saving the Sundarbans (NCSS), a coalition of 53 Bangladeshi organisations, called on the government to accept the report’s recommendation and for the Indian Government to abandon its support for the project. (UNESCO, National Committee for Saving the Sundarbans)

Taiwanese local government refuses to renew coal plant permit: Following sustained public protests against pollution, the Formosa Chemicals & Fiber Corporation has closed its Changhua textiles plant after the county government insisted the company must apply for a new permit for its coal-fired power plant. While the plant closed in early October both the company and the plant’s 1000 employees are lobbying for the decision to be overturned. (Reuters, Reuters)

Proposed mine in major South African watershed challenged: The Indian mining company Atha-Africa Ventures has been granted most permits for its proposed Yzermyn mine even though it is within the Mabola Protected Environment, an important water supply area. Mining has not only raised questions about the integrity of protected areas but also mining governance, with a director of one of the company’s joint venture partners listing his residential address as the estate of President Jacob Zuma. (Pulitzer Center on Crisis Reporting)

Two sentenced to life in prison over Chinese coal corruption: A former senior legislator in Shanxi province has been sentenced to life in prison for accepting US$18m in bribes over decisions  including  coal mine mergers, says government-owned Xinhua. In a separate case, a former deputy director of the coal department at the National Energy Administration was given a suspended death sentence – in effect a life sentence in prison – for accepting bribes to approve coal projects. (Global Times,  Asahi Shimbun)

Floods affect Duke Energy’s North Carolina coal ash dams: Duke Energy only discovered a bus-sized breach in one of its cooling water dams at its H.F. Lee plant in North Carolina when contacted by a news organisation which filmed the failing dam from a helicopter. A photo of the dam taken by the Waterkeeper Alliance revealed the breach in the dam was obvious on October 11. However, Duke Energy issued misleading media releases claiming there was no problem with the dam and later asserted the breach occurred after a morning inspection by its staff on October 12. (Charlotte Business Journal, Waterkeeper Alliance)

Police arrest leader of Indian land protest against NTPC mine: Police have arrested Nirmala Devi, a Congress member of the national parliament who is a prominent opponent of NTPC’s push to develop four coal blocks in Jharkhand. Opposition to the project centres on inadequate compensation for land compulsorily acquired from over 8700 families who would be displaced. On October 1 police shot and killed four protesters after Devi was arrested for leading a protest at the gates of the NTPC coal mining site. (Business Standard)

News

Czech Republic: Police urge criminal charges over alleged fraud and bribes in privatisation of coal company.

Germany: Low water levels in Rhine River hamper coal barges supplying three RWE plants.

Myanmar:  Parliamentarian raises concerns about inducements to villagers to back new coal plant.

Netherlands: Dutch Government says it can meet court-mandated climate target by increasing wind and solar.

South Africa: Legal challenge to proposed “unnecessary and destructive” private power plants.

Sri Lanka: Power cuts after Norochcholai shut for days after transmission system fault.

Companies + Markets

Oregon coal port plan withers: Lighthouse Resources has ended its involvement in the proposed Morrow Pacific coal export port and instead will export coal through the Westshore Terminals in British Columbia. While the company has dropped its legal challenge against the Oregon Department of State Lands’ rejection of a crucial permit for the project, the Port of Morrow is persisting with its appeal. (Lighthouse Resources,  Earthjustice)

Coal price set to fall, say port boss and Chinese official: The chairman of Gladstone Ports Corporation – a major Australian metallurgical coal export port – is predicting metallurgical coal prices will drop to US$115 per tonne by the end of the year. Metallurgical coal in the seaborne market has climbed from US$81 a tonne at the start of the year to US$200 a tonne in a recent deal between Peabody Energy and Nippon Steel. A spokesman for China’s National Development and Reform Commission said current prices for both thermal and metallurgical coal have “no market foundation” and are “not sustainable.” (Reuters, Gladstone Observer)

Questions raised in South Africa over Gupta transfers: In an affidavit to the High Court, South Africa’s Finance Minister, Pravin Gordhan, has provided the court with details of 72 “suspicious” bank transactions by  individuals and companies allegedly associated with the controversial Gupta family which has close ties to President Jacob Zuma. One of the transactions identified was a US$92 million transfer from the mining rehabilitation trust fund for the Optimum mine, to the Indian-headquartered Bank of Baroda which does business with the Guptas. The Democratic Alliance – the main Opposition party in the South African parliament – has called for an explanation on the transfer. (CNBC Arica, Democratic Alliance)

IEA flags big increase in renewables’ estimate: The International Energy Agency (IEA) has flagged it will “significantly” increase its estimate of future growth of renewable power in a review to be released at the end of October. The IEA has been criticised for consistently and substantially underestimating the dramatic growth in wind and solar power. The new estimate will also be incorporated into the IEA’s World Energy Outlook which is scheduled for release on November 16 in London. (Bloomberg)

Solar and wind cheaper than new coal in South Africa: A new study by CSIR, a South African government research agency, of recent bids by independent power producers finds electricity from solar and wind will be supplied at just four US cents per kilowatt hour (kwh) - 40 per cent cheaper than new baseload coal-fired generation. The authors of the study estimate cost of power from the 557 MW Thabametsi and the 306 MW Khanyisa coal-fired projects – which were announced on October 10 as preferred bidders for independent coal power projects – will be seven US cents per kWh, rather than the-under six cents per kWh price claimed. (Engineering News, CSIR)

Resources

Money to Burn? The UK Needs to Dump Biomass and Replace Its Coal Plants with Truly Clean Energy, Natural Resources Defence Council, October 2016. (Pdf)

This 23-page report argues investment in solar and wind are likely to be the least-cost option for the UK to decarbonise power generation rather than switching old coal plants to biomass.