March 26, 2020
Issue 315  |  View Past Issues

Editor's Note

The impact of the coronavirus crisis continues to grow. In Europe, where infections have escalated dramatically and restrictions have been extended, electricity demand has fallen. In South Africa, a three-week notional lockdown will hit the coal export industry. In India, which has also announced a 21-day lockdown, coal imports have also been impacted.

While the economic crisis caused by the restrictions is likely to have significant impacts on the energy sector, China is moving to clear the way for even more coal plants as a way of boosting the construction sector. In the US, the coal lobby is seeking financial favours as part of a coronavirus stimulus package. In Indonesia, a bill before parliament includes provisions aimed to axe or weaken restriction on the coal mining sector including in regards to rehabilitation and anti-corruption measures.

However, the broad trends away from coal in the energy sector remain. New data reveals that global coal plant construction reveals a 16 per cent year-on-year drop in capacity under construction and in pre-construction development. In the US, no qualifying bids have been made for the assets of Murray Energy, the largest private coal company in the country, because of the decline in domestic coal generation. The Japanese bank, MUFG, has cut its losses on a loan for a major Australian coal port. A new study estimates that the benefits of phasing out coal power are now so significant that they can be considered as a ‘no-regrets’ strategy.

Bob Burton


Will China build hundreds of new coal plants in the 2020s?

The constraints on another coal power boom in China are likely to be financial and economic, rather than regulatory, write Lauri Myllyvirta, Shuwei Zhang and Xinyi Shen in Carbon Brief.

China moves to allow coal power drive

In a little-noticed announcement at the end of February, China has approved a policy drafted before the coronavirus outbreak to allow 34,000 megawatts (MW) of new coal plants to proceed, writes Lauri Myllyvirta from the Centre for Research on Energy and Clean Air in Unearthed.

China’s post-COVID-19 stimulus must reject costly coal power

China should avoid coal power investments when stimulating the economy after COVID-19 has been contained, writes Matt Gray from Carbon Tracker Initiative in the World Economic Forum.

Adani versus villagers — the battle over the Godda power plant in India

The Godda power station, which is central to Adani’s plan to create a market in India for coal from its Carmichael coal mine in Australia, is progressing despite opposition from affected villagers, writes Geoff Law from Adani Watch.

Top News

Global coal plant construction starts decline: The Boom and Bust 2020 report on global coal plant construction reveals a 16 per cent year-on-year drop in capacity under construction and in pre-construction development, and a 66 per cent drop since 2015. The global coal plant fleet grew by 34,100 MW in 2019 with the commissioning of 68,300 MW of new plants offsetting closures. Almost two-thirds of the newly commissioned plants are in China. Coal plant capacity has been declining since 2011 in OECD (Organization for Economic Cooperation and Development) countries. In 2019 half of the retired coal power capacity in 2019 was in the US, the second highest on record. The report was produced by Global Energy Monitor, Greenpeace International, the Sierra Club, and the Centre for Research on Energy and Clean Air. (Global Energy Monitor, Global Energy Monitor [reports available in English, Chinese, Hindi, Indonesian, Japanese, Korean and Turkish))

Electricity generation slumps across Europe with coronavirus crisis: Research by the climate think-tank Ember has revealed that over the last week power demand has slumped by between two and seven per cent in every European country in large part due to restrictions aimed at curtailing the spread of the coronavirus. In Italy, power demand has slumped by about 20 per cent over two weeks with declines of over 10 per cent in Spain and France, three of the worst affected countries in Europe. Electricity demand in Germany, which has more cases of coronavirus than France and almost as many as Spain, was down by six per cent on Friday last week when restrictions began to tighten. (Ember)

South African coronavirus lockdown to hit coal industry: In a bid to curb the spread of the coronavirus South African President Cyril Ramaphosa has announced a 21-day national lockdown from March 26. The lockdown includes the coal mining industry but with an exemption for mines supplying domestic power stations. Demand for South African coal is also being hit by reduced demand from Indian sponge iron producers which are estimated to import about 10 million tonnes a year from the seaborne market. The coal industry has also suffered setbacks on other fronts. The Supreme Court recently rejected an application by the Coal Transporters Forum, representing coal truckers, for leave to challenge a lower court ruling dismissing their attempt to block Eskom’s power purchase agreements for 2000 MW of wind and solar power. (Reuters, Argus Media, Recharge)

US coal industry seeks bailout in wake of coronavirus crisis: The peak US mining industry lobby group, the National Mining Association (NMA), has urged President Trump to take executive action to prop up the finances of the coal industry and keep coal plants operating. The NMA is also seeking Congressional support for the suspension or reduction of royalties, the costs of assistance to victims of black lung disease and rehabilitation requirements. The NMA is also pressing for the administration to invoke the provisions of the Defense Production Act — which provides for private companies to be directed to produce strategic materials — to keep units online. US coal production has been declining rapidly, a trend which is likely to be accelerated, with the recent devaluation of the Australian dollar and Russian rouble against the US dollar likely to undercut US exports. Some US grid operators report that electricity demand has declined as coronavirus restrictions tighten. (Reuters, Platts)

Indonesian bill seeks to weaken mining regulations: A draft omnibus bill before the Indonesian parliament has been criticised by NGO groups as further weakening the regulation of the coal mining sector. Draft provisions would exempt coal mining companies from having to rehabilitate exhausted mines and removes the possibility of fines and imprisonment for public officials found guilty of having accepted bribes for mining permits. The bill also proposes tax and royalty incentives for downstream processing of coal such as the development of power plants and coal gasification. The bill also removes the role of local officials in issuing and monitoring permits and restores that role to the central government but without addressing how enforcement would be undertaken. Indonesia has a target of 550 million tonnes of thermal coal in 2020, with domestic demand estimated at about 150 million tonnes. (Mongabay)

Methane emissions from coal mines higher than previously estimated: A paper published in the Journal of Cleaner Production estimates that emissions of methane, a potent greenhouse gas, from operating coal mines will increase by a factor of four by 2100. The study also finds emissions from abandoned coal mines, which will continue to grow in number, will increase by a factor of eight. The study estimates that methane emissions will continue to grow throughout this century “even with aggressive mitigation actions.” (Journal of Cleaner Production, Carbon Brief)

Indian companies charged with criminal conspiracy: The Central Bureau of Investigation (CBI), India’s national anti-corruption agency, has filed charges under the Prevention of Corruption Act against four senior officials from Coal India subsidiary, Mahanadi Coalfields, and 25 companies. The CBI alleges the 29 defendants conspired to allow the supply of coal in breach of fuel supply agreements, with customers not making correct payments for the coal they received. The companies named in the case include Adani Power, Jindal Steel and Power, and Vedanta. The CBI alleges that between 2012 and 2017 the loss to the exchequer was estimated to be worth 970 million rupees (US$12.7 million). (NewsClick)

Secret recording reveals Adani’s Australian big export plans: A leaked September 2019 contract with the French mining services company, Sodexo, reveals Adani Australia is proposing to carry up to 100 million tonnes of coal a year over its proposed railway. Adani Australia has approval to produce up to 60 million tonnes of thermal coal a year from its Carmichael coal mine but other proposed mines in the regions could substantially increase export volumes. In India, the company’s lenders have demanded the company provide increased security against the company’s existing debt. According to Bloomberg estimates, in the last month the Adani family has provided US$1.4 billion in shares in Adani Enterprises and its power and ports subsidiaries as security against existing debts. The personal wealth of Gautam Adani is estimated to have halved this year due to the collapse in the value of the companies owned by the family. (ABC News, Bloomberg)


Australia: Study finds mine dust exposure of workers is likely to be underestimated.

Australia: Bid by Delta Electricity to win funding for an upgrade of the Vales Point power station from an emissions reductions grants fund has been rejected.

China: China Hongqiao Group, the world’s largest aluminium producer, has sold its coal power plant as it switches to a hydro-based plant in Yunnan province.

India: The Ministry of Environment has issued a show cause notice to Mahagenco over environmental violations at its 2400 MW Koradi thermal power station in Maharashtra.

Malaysia: Coronavirus shutdown drives coal generation fall of over one-third.

Mongolia: Coal exports to China resume after coronavirus restrictions on trade are eased.

Netherlands: Dutch cabinet will present its plan on reaching climate targets by April 1 as coal generation falls.

US: The 685 MW Somerset plant, the last coal power station in New York state, will close in late May.

US: A Colorado business group established to challenge a coal plant retirement was backed by a front group supported by coal companies and Wyoming.

US: Washington State Court of Appeals has rejected an appeal by Millennium Bulk Terminals against the State Shorelines Hearing Board's refusal to issue a shorelines permit for the company’s proposed coal port.

Companies + Markets

Study finds benefits of coal phase-out outweigh costs: A study by researchers from the Potsdam Institute for Climate Impact Research published in Nature Communications argues that the local environmental and health benefits of a coal phase-out greatly outweigh the costs. The authors argue that even with the exclusion of the climate protection benefits a rapid phase-out of coal power can now be classed as a ‘no-regrets’ strategy. The study estimated the benefits to human health and biodiversity from ending coal generation were greater than reduction in economic growth and additional investments in the energy system. (Nature Communications, Potsdam Institute for Climate Impact Research)

Japanese bank cuts losses on Australian coal port: Mitsubishi UFJ Financial Group (MUFG), a major Japanese financial services company, has reportedly sold its US$85 million loan for the Wiggins Island Coal Export Terminal to a hedge fund for about 52 cents in the dollar. The A$3.5 billion (US$2 billion) coal terminal, which was commissioned in 2015, is owned by a consortium of coal mining companies including Glencore, New Hope Corporation, Yancoal, Coronado Global Resources and Aquila Resources. While the terminal has an annual capacity of 27 million tonnes a year, the charge for coal exported through it is about double that of other Australian ports. (Reuters)

Mechel looks to offload its Elga coal mine in Russia: Gazprombank, Russia’s third largest private bank, has agreed to sell its 49 per cent stake in Mechel’s Elga metallurgical coal project in Siberia to businessman Albert Avdolyan for US$557 million. In 2014 Mechel began development of the first stage of the US$2–4 billion project, which is regarded as one of the world’s largest deposits of coking coal. Avdolyan’s company, A-Property, is reportedly seeking to buy the remaining 51 per cent stake in the project with part of the proceeds earmarked by Mechel to repay some of its debt to Gazprombank and VTB Bank. (Reuters)

Indian ministry significantly overstates new coal plant construction activity: The Institute for Energy Economics and Financial Analysis (IEEFA) has disputed claims made by the Indian Ministry of the Environment to the Indian Parliament that 62.2 gigawatts of coal-fired power plants are under construction. IEEFA analyst Kashish Shah said that the latest data from Global Energy Monitor revealed that only 37,000 MW is under construction. A further 29,000 MW of coal plants are in pre-construction phases with over half of this capacity not yet approved. Shah pointed out that 46,000 MW of proposed coal plants in India were cancelled in the last year making 600,000 MW of projects abandoned over the last decade. (Institute for Energy Economics and Financial Analysis)

Questions raised about SGS self-exoneration in coal testing scandal: The global testing company SGS has rejected claims made in a lawsuit by Justin Williams, a former executive with the Australian mining company TerraCom, that coal analysis results on export cargoes were falsified to meet specifications. In a statement filed with the Federal Court of Australia, Williams alleged that both SGS and the lab services company ALS had changed test results. ALS has suspended four staff after it confirmed results were changed. However, SGS has rejected the claim but declined to detail how its investigation was conducted given it exonerated itself within days of the allegations being made. The Australian Federal Police has confirmed that the matter is subject of an “ongoing investigation” by another unspecified agency, which is most likely to be the Australian Securities and Investment Commission. (Australian Financial Review [paywall])

Despite shutdown threat, Tata Power’s Mundra price bid still up in the air: State governments of Haryana and Rajasthan are considering whether they will bow to pressure from Tata Power and agree to increase the price paid for their respective shares of power from the 4150 MW Mundra power plant. Maharashtra and Punjab governments are reportedly due to make a final decision on paying an increased price soon. To date, only Gujurat has agreed to Tata Power’s demand that the price paid be increased from 2.7 rupees per kilowatt hour (KWh) to about 3 rupees (US$0.04 cents) per KWh. Tata Power had previously threatened that it would shut the plant down by March 20 unless all five distribution companies agreed to pay a higher tariff. (Economic Times)

New uses emerge after old coal plants close: The closure of coal plants across the US has led to some of the sites being repurposed for uses such as a student union and recreation centre, a new port and a support centre for offshore wind development. Other proposed uses include as an energy storage site and biofuel manufacturing centre. A private company, Environmental Liability Transfer, has bought up six disused coal plants because they have established infrastructure such as access to rail, ports, waterways and grid connections allowing them to be repurposed for other uses. (Energy News Network)

No bidders for bankrupt US company: Murray Energy, the largest private coal company in the US, received no bidders for its coal assets which were put up for auction as part of its Chapter 11 bankruptcy plan. With no qualified bidders, Murray Energy has declared an offer by senior lenders as the winning bid. Murray Energy, which produced about 76 million short tons (69 million tonnes) of mostly thermal coal for the US market, had a separate auction process for its metallurgical coal subsidiary. This too attracted no qualified bidders other than an offer from Blackhawk Mining of US$750,000 for the 435,000 short tons (395,000 tonnes) per year Maple Eagle metallurgical coal mine. A bankruptcy court hearing on April 2 will consider whether to approve Blackhawk Mining’s offer. (S & P Global Market Intelligence, S & P Global Market Intelligence)