December 15, 2016
Issue 163  |  View Past Issues
CoalWire

Editor's Note

This week the International Energy Agency’s latest Medium Term Coal Outlook Report - which had substantial input from coal industry insiders - grudgingly conceded the coal industry is ailing. But it still held out hope for coal exporters that the Indian market might come to its rescue.

Within 24 hours, India’s Central Electricity Authority (CEA) dashed that flicker of hope. In its draft five year power plan the CEA confirmed no new coal plants beyond those under construction would be required before 2022, and none would be required in the subsequent plan for the 2022 to 2027 period. A few days earlier India’s Minister for Health informed parliament a World Bank report had estimated air pollution was so bad it cut 3 per cent from the country’s gross domestic product (GDP).

India’s dramatic retreat from new coal in the years ahead owes much to the huge falls in the cost of renewables, slowing electricity demand growth and the gains from a range of energy efficiency measures. Pushed by growing public opposition to air pollution, displacement and deforestation for coal mining, India’s electricity planners and government are dramatically shifting ground.

Bob Burton

Features

Is the Indian coal domino about to fall?

The upbeat claim by the coal lobby that Indian coal power will keep growing for decades to come is being sorely tested as the country’s power sector is rapidly shifting towards renewables, write Bob Burton and Ashish Fernandes in EndCoal.

Beyond the International Energy Agency’s spin, data points to coal’s decline

Beyond the spin in the International Energy Agency’s latest coal market review the data points to a 16 per cent cut over the past two years in the agency’s global coal consumption forecast for 2019, writes Tim Buckley from the Institute for Energy Economics & Financial Analysis.

In Puerto Rico, environmental injustice and racism inflame protests over coal ash

A recent protest of over 1000 people against coal ash pollution in Puerto Rico is grounded in the struggle of poor and mostly black communities to protect their environment and health, writes Hilda Llorens  from the University of Rhode Island in The Conversation.

Campaigns

UK Government says underground coal gasification incompatible with climate goals

The UK Government has all but ruled out the development of underground coal gasification (UCG) following the release of a 2015 consultant’s report which found the carbon dioxide emissions from producing the gas would be between 40 – 100 per cent higher than gas from alternative sources. Following Scotland’s decision to ban UCG, Cluff Natural Resources proposed to pursue the use of the technology elsewhere in the UK. A UK government spokesman said since UCG would not be compatible with its climate goals “we are therefore minded to not support the development of this technology in the UK.” (Guardian, Telegraph)

Divestment doubles in a little over a year

A report on the divestment movement has found investment funds committed to divesting from some or all fossil fuel companies now account for US$5.2 trillion in funds, double the amount of just  15 months ago.  The report, by Arabella Advisors for the DivestInvest coalition, estimates 688 institutions and more than 58,000 individuals across 76 countries are now committed to divestment. (Guardian)

Top News

Huge cut to India’s coal plant plans: The draft energy plan released by the Central Electricity Authority (CEA) states that for the five years to 2022 the country does not require any more coal-based capacity beyond the 50,000 MW already under construction. Despite slowing demand growth the CEA argues over 244,000 MW in new capacity will be needed by 2022, with 175,000 MW coming from renewables. For the 2022 to 2027 period the CEA estimates no new coal plants will be required. (Business Standard, Economic Times)

Hit to India’s GDP from air pollution: India’s Ministry of Health has told Parliament the cost of serious health impacts from the country’s air pollution is estimated to be about three per cent of the country’s gross domestic product (GDP). The Minister for Health and Family Welfare, Anupriya Patel, told parliament a World Bank report on India’s environmental challenges had estimated the total cost of all environmental degradation in the country at about US$60 billion, which is equivalent to around 5.7 per cent of India's GDP. (Times of India)

Tribunal rejects investment treaty challenge over axed Indonesia licence:  The International Centre for Settlement of Investment Disputes (ICSID) Tribunal has dismissed a challenge by the London-headquartered Churchill Mining against the cancellation of the mining licences for the East Kutai coal project in east Kalimantan. Churchill Mining and an Australian subsidiary had sought $1.31 billion in damages under the provisions of the UK–Indonesia and Australia-Indonesia investment treaties. (Mining Weekly)

Indonesian residents file objection over Japanese-backed plant: Eighteen residents have filed an official objection against the Japan Bank for International Cooperation (JBIC) over human rights violations and breaches of the bank’s social and environmental guidelines associated with the proposed 200 MW Batang plant in central Java. In June JBIC decided to provide a US$2.1 billion loan for the project which includes two Japanese companies, J-Power and Itochu, as part of the consortium. The residents have called for construction to cease while the objection is investigated. (Friends of the Earth Japan, Residents Objection)

Methane emissions surge:  New research has revealed emissions of methane – a greenhouse gas which is over 25 times more potent than carbon dioxide – have leapt alarmingly; from about 0.5 parts per billion (ppb) a year at the start of the century to 10ppb a year in 2014 and 2015. One-third of methane emissions are estimated to originate from fossil fuels, with emissions from ‘gassy’ coal mines one of the significant sources. (Guardian, Environmental Research Letters Journal)

US Government excludes mining from some Tennessee mountaintops: The Department of Interior has designated over 30,000 hectares of ridgelines in the Cumberland Mountains in eastern Tennessee as unsuitable for open cut coal mining. The Tennessee state government had requested the protection of most of the area but this was expanded by about 10 per cent following public comments. The National Mining Association, the peak mining lobby group, objected to the decision while environmental groups welcomed it with qualifications. (News&Observer, Knoxville News Sentinel)

US coal port developer seeks to overturn ban: A company of developer Phil Tagami, Oakland Bulk Oversized Terminal, has launched a legal challenge against the July 2016 decision of Oakland City Council to ban transport of coal through the city and storage at a proposed coal export terminal in Oakland. The council ban was instituted after a community campaign objecting to coal dust pollution and the risks of transporting petroleum coke through the city. The port project, with a proposed US$53 million subsidy from four Utah counties, was designed to cater for the export of up to nine million tonnes of coal. (East Bay Times, High Country News)

“I’ve cautioned Mr Trump to not over commit to miners and to America as to what he can do in bringing the coal industry back,”

said Robert Murray, the CEO of Murray Energy and major donor to the Trump campaign.

Murray Energy CEO “cautioned Mr Trump to not over commit" on "what he can do in bringing the #coal industry back” http://wvmetronews.com/2016/12/12/murray-energy-ceo-cautiously-optimistic-on-future-of-coal/

News

Dubai: Chinese banks and Standard Chartered among funders of US$3.4 billion 2400 megawatt (MW) Hassyan plant.

Bangladesh: India’s plan to export low quality coal rebuffed as South African coal preferred.

China: Police arrest protesters for putting face masks on statues in protest against air pollution.

Czech Republic: Objections to Turow mine expansion to be discussed with Polish Government.

Greece: At auction, winning solar park bid is cheaper than new lignite unit at Ptolemaida plant.

South Africa: Within months the Guptas converted a US$220,000 coal licence into a US$65 million windfall.

Tajikistan: For building a US$350 million 100 MW plant, a Chinese company gains a gold mine.

US: Coal and power companies fund push to freeze clean energy and energy efficiency in Ohio.

Companies + Markets

Indian coal plant utilisation plummets, renewables rise: The commissioning of almost 4000 MW of new plant capacity at a time of slowing demand growth has pushed coal plant utilisation rates in October down by nearly eight per cent since April this year. Utilisation rates for private power generators – which predominantly use coal – have fallen by almost 11 per cent compared to October 2015. Since the April 1 start of the financial year marginally more wind and solar plant capacity has been added than coal plant capacity. (Economic Times)

Supreme Court setback for Reliance on ‘Ultra-Mega’ project: India’s Supreme Court has upheld a Central Electricity Regulatory Commission decision overturning the ruling of the Appellate Tribunal for Electricity (APTEL) which awarded US$155 million to Reliance Power against seven state utilities. The utilities had argued Reliance Power had supplied a flawed certificate on the test certifying the commissioning of the 4000 MW Sasan Ultra-Mega Power Project in order to benefit financially under the terms of its power purchase agreement. (Financial Express)

Poland objects to proposed EU limits on capacity payments:  Energy Minister, Krzysztof Tchorzewski, has objected to the European Commission restrictions on capacity payments, vowing “Poland will not be able to acknowledge these regulations.” In late November the European Commissioner for Competition, Margarethe Vestager, warned capacity payments “must not be backdoor subsidies for a specific technology, such as fossil fuels, or come at too high a price for electricity consumers.” (Reuters, Climate Home)

Spain propping up old coal plants: Spain is spending just over US$1 billion a year on capacity payments to prop up old coal and gas plants, according to a report from the Institute for Energy Economics and Financial Analysis (IEEFA). IEEFA’s Gerard Wynn argues Spain’s payments breach “almost the entire check list of criteria the Commission uses.”(Climate Home, IEEFA)

Bumi Resources looks for Chinese bailout: Bumi Resources, Indonesia’s largest thermal coal exporter, has announced plans to swap US$1.99 billion of its US$4.2 billion of debt for shares. China Investment Corporation (CIC) has US$1.06 billion of the debt and China Development Bank (CDB) has US$550 million. Under the proposed debt-for-equity swap CIC would own 22 per cent of the company. Bumi Resources, which has been embroiled in controversy over its poor human rights and environmental track record, first negotiated a debt for equity swap with CIC in October 2013.  (Jakarta Post, EndCoal)

Resources

The Global Fossil Fuel Divestment and Clean Energy Investment Movement, December 2016. (Pdf)

This 37-page report analyses commitments by 688 financial institutions with over $5 trillion under their control to divest from fossil fuel companies.

Underground Coal Gasification – Evidence Statement of Global Warming Potential, Department of Energy & Climate Change (DECC), November 28, 2015. (Pdf)

This just-released 19-page consultancy report to DECC concludes power generation based on underground coal gasification would have far higher greenhouse emissions than alternative sources of gas.