July 14, 2016
Issue #142  |  View Past Issues
CoalWire

Editor's Note

A flurry of encouraging announcements reinforce the trend away from coal: China is set to announce a freeze on new coal plants, France will implement a tax to ensure the rapid phase-out of its coal plants and a court challenge has derailed a mine plan in Alaska. Meanwhile the costs of pursuing coal power continue to grow. The South African utility Eskom has announced a dramatic multi-billion rand cost overrun for two partly-built coal plants while Poland faces formidable challenges in trying to prop up its ailing coal industry.

A video released this week provides a great overview of the achievements of the ever-growing movement to end the age of coal.

However, the last week wasn’t all good news. The slain Filipina anti-coal activist Gloria Capitan was buried on Sunday with 500 people rallying to call for justice. Our thoughts are with her family, friends and colleagues.
 

Bob Burton

Features

Poland’s costly attempt to try and save the coal industry

Despite a deep cultural attachment to coal, the rising financial and health costs are likely to overwhelm the Polish Government’s attempt to prop up lignite mining, writes Kathiann M. Kowalski in Mid West Energy News.

Murder of Filipina activist symptom of attempt to quash rising tide of anti-coal activism

The murder of 57-year old Gloria Capitan, who led a campaign against air pollution from a small port near her home in Lucanin, is an attempt to quash the rising tide of citizen activism against coal in the Philippines, writes Bob Burton in EndCoal.

Local officials blame lignite mine for disappearing lakes in Polish nature reserve

The water level of lakes in a nature reserve in western Poland have dropped dramatically in recent years, leading the mayor, residents and farmers to speak out against the impact of coal mines on groundwater supplies, writes Claudia Ciobanu in Reuters.

Campaigns

Court blocks transfer of Alaskan mine permit

A federal court judge has ruled in favour of the Chickaloon tribal government and a coalition of environmental groups which argued the permit for the proposed Wishbone Hill mine in Alaska could only be valid if mining had commenced within three years of being issued. Usibelli, which bought the permits from two other companies in 1997 and built a road to the proposed mine in 2010, has not commenced commercial mining. Environmental groups argue Usibelli will have to seek fresh permits and complete a new environmental assessment on the project. (Alaska Dispatch News, Alaska Public Media)

Top News

China moves to freeze new coal plants until 2018: China’s next five-year plan, which is due to be released soon, is expected to announce a moratorium on new coal plants until the start of 2018. While the moratorium will be reviewed in 2018, it is expected it will be extended. With about one-quarter of wind generation wasted in 2016 and the capacity-factor of coal plants falling due to   slowing power-demand growth, the freeze is intended to prevent over-investment in coal plants and ensure greater utilisation of renewable generation. (Australian Financial Review)

Doubts raised about owner of Rio Tinto $1 Australian mine: TerraCom, the company which bought Rio Tinto’s Blair Athol mine in Queensland for $1, has been losing money and has debts of US$114 million. As part of the deal Rio Tinto has agreed to pay TerraCom US$61 million to cover rehabilitation liabilities but analysts estimate it may cost three to four times that. Environmental groups have called on the Queensland Government to block the sale. (ABC News)

South Africa’s proposed coal plants face challenges: Later this month the South African Department of Energy plans to announce which proposed coal plants have been selected through its Independent Power Producers (IPP) programme. However, only two companies submitted bids. One is the 600 megawatt (MW) Thabametsi project proposed by a joint venture between Marubeni, Kepco and Exxaro Resources, which is already subject to a legal challenge. (City Press)

France moves to phase out coal: An advisory committee to French Environment Minister Segolene Royal has recommended the country’s existing 3000 megawatts (MW) of coal-fired power should close. The committee proposed three options, including a tax on coal-fired generation or tighter carbon dioxide emission standards. Royal said she would accept the proposal to tax coal generation, with the details to be finalised later this month and included in the budget law for adoption in November. (Reuters)

Panel finds Indian legal agency head met privately with accused in ‘Coalscam’: A panel appointed by the Supreme Court has concluded former Central Bureau of Investigation director Ranjit Sinha met with representatives of some of those accused in the scandal over the allocation of coal blocks. India’s Attorney General Mukul Rohatgi told the court “inquiries might have been influenced after such meetings.” The court has reserved its decision on whether to make the report public and whether the panel should be provided with access to preliminary reports submitted by those Sinha met. (Economic Times, Indian Express)

“Why allow more coal plants? Why commit to a form of energy that has no future?”

said Gina Lopez, Secretary of the Environment and Natural Resources in the Philippines.

News

Bangladesh: Construction contract signed with BHEL for Rampal plant near Sundarbans World Heritage Site.

Botswana: Shumba Energy’s proposed 600 MW Mabesekwa project receives environmental permit.

Czech Republic: NGOs warn banks against funding Europe’s new coal powerhouse, EPH.

India: Spill from burst coal-ash slurry pipeline from NTPC’s Talcher plant prompts protests.

US: Exports from Hampton Roads, the country’s largest export coal port, slump 35 per cent in 2016.

Venezuala:  Exports from Colombia via Venezuala may resume if border re-opens.

Companies + Markets

Eskom approves cost hikes on new plants: Eskom has dramatically revised upwards the cost of its Kusile and Medupi plants by a combined US$5.7 billion. The two projects, currently under construction, each have a capacity of 4800 MW.  They are expected to have a combined cost of US$21 billion. In its annual report released last week Eskom attributes the increased costs to “ongoing schedule delays and insufficient time for front-end planning” and also notes electricity sales are “either at or nearing a 15-year low.” (City Press)

Deutsche Bank coal team jumps ship: According to one analyst the departure of six senior members of Deutsche Bank’s metals and mining investment banking team to the smaller New York investment firm Jefferies may signal the bank is pulling back from coal investment deals. Deutsche Bank has been the subject of sustained public pressure from environmental groups over its financing of coal projects. Deutsche Bank declined to comment. (New York Times)

Fall in US coal production projected to continue: The US Energy Information Administration (EIA) estimates US coal production may drop by about 26 per cent between 2015 and 2040 if the Obama Administration’s Clean Power Plan is implemented. The EIA’s Annual Energy Outlook 2016 estimates coal production could fall by about 209 million tonnes, with much of that from mines in the Powder River Basin in Wyoming and Montana. (Energy Information Administration)

Alpha Natural Resources bankruptcy plan approved: A US bankruptcy court has approved an Alpha Natural Resources’ plan to split the company in two with its most profitable mines sold to a new company, Contura Energy, backed by its senior lenders. The court also approved an agreement between the Department of Interior to replace US$411 million in self-bonds for its rehabilitation liabilities with cash. While environmental groups welcomed the deal, the federal Office of Surface Mining Reclamation and Enforcement argued the plan breached state law and Alpha lacked adequate bonding for its Wyoming mines. (Casper Star-Tribune, Casper Star-Tribune)

Resources

Ending the Age of Coal, EndCoal, July 2016. (Video)

This video, documents the success of a growing global movement to end the age of coal and highlights the challenges ahead.

Critically Assessing Energy Modeling in the United States: Reflections on the U.S. Energy Information Administration and Renewable Energy Forecasts, University of Sussex, undated.

This article is part of an ongoing exchange between two academics and the EIA over the accuracy of the agency’s renewable energy forecasts.

“A Canadian Province Turns Aggressively Toward Development of a New Energy Economy”, Institute for Energy Economics & Financial Analysis, July 11, 2016.

This article provides a good overview of the Alberta Government’s climate policy which was announced earlier this year and how it will handle the phase out of 6300 MW of old coal plants.