June 23, 2016
Issue #139  |  View Past Issues
CoalWire

Editor's Note

The appointment by Philippines President-elect Rodrigo Duterte of anti-coal activist Gina Lopez as head of the Department of Environment and Natural Resources has the proponents of coal power plants in a panic. “There goes the coal plants too,” Tweeted Manny V. Pangilinan, the CEO of the pro-coal utility Meralco on hearing the news. The Philippines has over 7000 megawatts (MW) of coal plants announced or permitted and another 4000 MW-plus under construction. With many of the proposed plants yet to progress far, there are high hopes a dramatic shift in the country’s energy direction is unfolding.

Indonesia, too, has trimmed 7000 MW of new coal-plant capacity and 23 million tonnes of coal consumption a year from its latest power development plan ending in 2025. While Indonesia still hopes to double coal consumption to 148 million tonnes over the next decade, the latest change may be the first of many cuts to coal’s role, as the advantages of renewables become undeniable.

Bob Burton

Features

Turkey is at a crossroads—invest in lignite plants or the new energy economy?

Turkey is at risk of making an historic error in energy policy by investing heavily in a new fleet of lignite-fired electricity plants, write Pelin Yenigun Dilek and David Schlissel from the Institute for Energy Economics and Financial Analysis.

Meet the Alabama activist getting sued for complaining about a coal-ash dump

After Esther Calhoun and her friends in Black Belt Citizens Fighting for Health and Justice spoke out against the coal-ash dump in Alabama, the company owning the landfill hit them with a US$30 million lawsuit. Calhoun speaks to Aura Bogado from Grist.

Campaigns

Incoming Philippines President appoints anti-coal advocate
 

To the alarm of the mining industry and coal-power producers President-elect Rodrigo Duterte has announced the appointment of outspoken anti-coal and environmental activist Gina Lopez as secretary of the Department of Environment and Natural Resources (DENR). DENR has a central role in the regulation of existing and proposed coal plants. Lopez’s appointment followed the Climate Change Commission, a government agency, unveiling a six-month review of the government’s energy strategy with a view to “reshape the country’s power development plans and replace coal with renewable sources of energy.” (The Philippine Star, Business World)

Top News

Indonesia trims coal plant plans: The Indonesian Government’s 10-year electricity expansion plan flags a doubling of domestic coal consumption by 2024 but trims estimated use back by 23 million tonnes compared to the last version of the plan. The reduction of coal’s share of generation from 55.5 per cent to 50 per cent in 2025 represents the scrapping of 7000 MW of proposed new coal plants. The plan also envisages a reduced role for renewables and an expansion of gas power generation. (Jakarta Globe)

Legal challenge to Sri Lankan plant: A legal challenge against the proposed Sampur coal plant argues the Central Environmental Authority approved the environmental impact assessment for the plant even though an earlier court ruling had revoked the designation of the area as a Special Zone for Heavy Industries. Since the plant was first proposed in 2006, residents displaced by the civil war have returned to their land but this is not addressed in the assessment of the impact of pollution from the plant. (Sunday Leader)

Most Romanian coal plants operate illegally: Nine of the 11 coal plants in Romania are operating in breach of their pollution-control standards, with some plants emitting 10 times more carbon dioxide than allowed under European Union standards according to a Greenpeace report. Two old and highly-polluting plants continue to operate even though they were suspended by the regulator. (Romania Insider, Greenpeace Romania)

Alpha Natural Resources bankruptcy plan opposed by US Government: The US Department of Justice has filed an objection to Alpha Natural Resources’ bankruptcy plan to sell its assets to creditors on the grounds it does not providefor the completion of environmental reclamation and long-term water treatment" as required by US law. The agency stated it would not approve the transfer of federal leases or contracts unless mine-site rehabilitation was properly provided for. (Reuters)

Indian move to muzzle NGOs draws UN ire: Three United Nations special rapporteurs on human rights have expressed alarm over the Modi Government’s use of the Foreign Contribution Regulation Act (FCRA) to muzzle dissenting NGO groups. The rapporteurs stated the FCRA provisions “are being used more and more to silence organisations” including environmental groups “which may differ from those backed by the Government.” In 2015 the Modi Government blocked funding of Greenpeace and prevented one of its staff travelling to the UK and others from entering India. (Reuters, United Nations)

Queensland parliamentary committee slams leak to coal lobby: The Ethics Committee of the Queensland Parliament recommended Liberal National Party MP Stephen Bennett be found in contempt for giving the Queensland Resources Council (QRC) a copy of confidential draft recommendations on proposed legislation requiring stricter rehabilitation of mining sites. Bennett circulated suggested amendments to the draft recommendations to committee members - but it was later discovered the document metadata suggested its author was Leanne Bowie, a lawyer who represented the QRC at public hearings on the bill. Bennett  apologised to Parliament. (ABC, Queensland Parliament Ethics Committee)

“We have a very ambitious target of about a billion tonne of coal production by Coal India by 2020. But the problem is that if we are not going to pick up the coal which we are producing now [about 550 million tonnes] then what we will do with the one billion tonne of coal that we are coming up with?”

asked Anil Swarup, the Secretary of the Indian Government’s Ministry of Coal.

News

New Zealand: Climate activists decry approval of coal boiler for Fonterra milk powder plant.

Russia: Enel discusses sale of 3700 megawatt (MW) Reftinskaya coal plant to owner of SUEK.

Sweden: Almost half of Swedish voters oppose sale of Vattenfall’s German coal assets.

US: Judge alarmed at massive ongoing leak from Colstrip plant coal-ash dams in Montana.

US: Call for federal investigation into Utah plan to invest US$53 million in Oakland coal port.

Companies + Markets

Indian public utilities urged to end coal imports: At a meeting of state governments to discuss power supply issues the Secretary of the Ministry of Coal, Anil Swarup, urged all state-owned power stations burning imported coal to “immediately” switch to domestic coal. “We have coal but there aren't many takers for it… let me request the delegates from the states which are currently importing coal should immediately stop the imports because Coal India will offer coal to them,” said Mr. Swarup. In April and May Indian thermal coal imports fell by 19.6 per cent compared to the same period in 2015. (Business Standard, Platts)

Rampal plant financially flawed: The proposed 1320 MW Rampal plant – proposed by a joint venture of Bangladesh and Indian Government companies – would drive up power prices, rely on US$3 billion in subsidies and be more expensive than solar power. The Institute for Energy Economics & Financial Analysis estimates the Bangladeshi Government’s 15-year income tax exemption would amount to a $936 million subsidy, with a below-market-rate loan from the Indian Government’s EXIM Bank amounting to a further US$988 million subsidy. (Institute for Energy Economics & Financial Analysis)

Mongolian producer skates on brink of insolvency: SouthGobi Resources, the owner and operator of the Ovoot Tolgoi Mine, has once again breached its agreement to repay US$18.7 million to China Investment Corporation. The company has been hit by falling Chinese demand and prices, several legal actions and investigations for tax evasion by Mongolian authorities. In its first quarter report for 2016 the company flags that if it can’t raise additional funds it may not be able to continue operating. (Bloomberg, SouthGobi Resources)

Engineer alleges flawed design and foundations of UCG plant: In a witness statement Dennis Orford, a former mechanical engineer at Linc Energy’s Queensland underground coal gasification plant, alleges he was sacked after he refused to install equipment which didn’t meet Australian design standards. The company, which in late May was put into liquidation, is being prosecuted over the contamination of up to 320 square kilometres of land. Linc Energy’s liquidation also affects the Yerostigaz UCG plant in Uzbekistan and the company’s subsidiaries in Poland, southern Africa and the US. (ABC, The Australian)

Indonesian companies resisting royalty payments: Indonesian coal-mining companies have withheld paying royalties of over US$75 million in recent years due to a dispute over whether or not the companies are eligible for tax credits. The companies, which operate 74 coal contracts of work, are arguing a regulation passed in 2000 excluding coal from taxation payments overrides the provisions of their earlier contracts. Even though royalties are collected by one arm of government and tax by another, the Indonesian Coal Mining Association has confirmed some of its members are not paying royalties in a bid to force a favourable resolution of their tax-exemption bid. (Tempo)
 

Reserve Bank of India Governor exits over bad loans: The Governor of the Reserve Bank of India, Raghuram Rajan, has decided to return to academic life in the US after increasing opposition to his insistence Indian state banks take action on bad loans to major companies. Central to the controversy are companies with a heavy involvement in the power sector such as Essar, Reliance Industries, the Adani Group, GVK and Lanco.  Early on in his three-year term Rajan decried India’s “riskless capitalism” where major companies ignored loan-repayment obligations. (Financial Times, The Wire)

Resources

Risky and Over Subsidised: A Financial Analysis of the Rampal Power Plant, Institute for Energy Economics & Financial Analysis, June 2016. (Pdf)

This 61-page report scrutinises the proposed Rampal plant in Bangladesh, finding significant financial risks associated with the project and solar power a better option for the country.

Turkey at a Crossroads: Invest in the Old Energy Economy or the New?, Institute for Energy Economics and Financial Analysis, June 2016. (Pdf)

This 27-page report investigates the Turkish Government’s support for up to 71 new lignite-fired plants and concludes the coal-centric plan poses a myriad of financial and other risks for the country.

Zero Hour: Poor Governance of Mining and the Violation of Environmental Rights in Mpumalanga, Centre for Environmental Rights, May 2016. (Pdf)

This 108-page report documents the threat posed to Mpumalanga province in South Africa from the proliferation of mining and exploration applications, especially for coal.

On Dangerous Ground, Global Witness, June 2016. (Pdf)

This 15-page report reports that in 2015, 185 land and environmental defenders were killed across 16 countries, with Brazil, the Philippines and Colombia accounting for over half the death toll. Conflict over mining was the largest driver of violence.