October 7, 2021
Issue 389  |  View Past Issues

Editor's Note

As coal and other fossil fuel prices surge, which way will importers flip? They could double-down on reliance on coal and gas for power generation or reduce their risk by diversifying into renewables. For importers originally sold on the idea that coal power would be cheap and reliable, the current instability in global energy markets exposes the original hype as a shallow marketing ploy.

India, which has long sought to reduce reliance on expensive imported coal in the quest for cheap power, is reeling from the high global coal prices. In Germany, a coal plant reliant on imports has shut down repeatedly due to congestion in barge transport. In Panama, the government is pushing the owner of the country’s only coal plant to consider upgrading it or converting it by 2030.

Two other countries – Turkey and Vietnam – face a moment of reckoning over proposed coal plants too. A new report highlights the appalling air quality problems in Turkey, with coal plants a significant contributor. Analysts are wondering whether a raft of proposed coal plants may wither with the government’s recent commitment to the Paris Agreement and announcement of a net-zero carbon goal. Vietnam, on the other hand, is likely to approve another coal-heavy power development plan even though the prospect of financing many of the proposed projects seems remote.

Bob Burton


Asia's energy crunch boosts coal but threatens its future

The current high coal price may be good for exporters in the short term but it undermines the central selling point of coal, namely that it is cheap and reliable, writes Clyde Russell in Reuters.

Cambodia counts the cost of its push to expand coal power

The potential cost of Cambodia's push to build news coal plants has increased sharply since it began to ramp up two years ago, prompting calls for the government to rethink its strategy and promote renewable energy, writes Shaun Turton in Nikkei Asia.

Indian tribal people rally and march to fight Adani coal mines

On October 2, the birthday of Mahatma Gandhi, hundreds of indigenous tribal people turned out to defend the Hasdeo forests from an onslaught of coal mines, despite the efforts of supporters of Adani and the coal industry to disrupt proceedings, writes Geoff Law in Adani Watch.

Top News

German plant runs out of coal due to barge bottleneck: The German utility STEAG has temporarily shut its 780 megawatt (MW) Bergkamen-A plant in North Rhine-Westphalia after running out of coal. With limited supply and high prices for gas, German power utilities have increased coal generation leading to coal shortages. In September STEAG reported the plant ceased generation four times for up to six days at a time due to external factors. “There is a strong demand for coal per se and secondly, there is a strong demand for transport by barge. And since Bergkamen has no rail connection, there are no logistical alternatives available here,” said Daniel Muhlenfeld, a STEAG spokesman. (Bloomberg)

German utility seeks to close plant: EnBW has announced it aims to submit plans by mid-2022 to the Federal Network Agency for the closure of its 517 MW Rheinhafen 7 hard coal-fired power station at Karlsruhe in Baden-Wurttemberg. The plant was commissioned in 1985. If the network and transmission agencies approve EnBW’s closure plan, the plant could cease operations by mid-2023. The company’s announcement does not affect the 910 MW Block 8 unit which was commissioned in 2014. (Reuters, EnBW)

Panama aims to end coal imports: The Panama Government is pressing Minera Panama, a copper mining company owned by Canadian-headquartered First Quantum Minerals, to commit to the closure of its 306 MW coal plant by 2030. The two units of the plant, which relies on coal imports from Colombia, were built to service the development of the mine and associated processing plant and were commissioned in 2018 and 2019. Panama is seeking to renegotiate the agreement governing the mining and smelting operation and has sought a proposal from the company on upgrading the power plant. In 2018 Panama’s Supreme Court of Justice ruled in favour of the Center for Environmental Impact, which challenged the 2009 legislation ratifying the mining concession agreement. (Reuters)

Canadian minister reinstates federal review of coal mine expansion: Canada’s Minister for the Environment, Jonathan Wilkinson, has reinstated his decision to subject Coalspur Mines’ proposed expansion of the Vista thermal coal mine to a federal review after the Federal Court ordered him to reconsider his initial decision. This followed a legal challenge by the Ermineskin Cree Nation, which supports the mine, in which they argued their treaty rights were violated when Wilkinson failed to consult them before making his initial decision. Since then the Impact Assessment Agency of Canada has met with 44 First Nations, including the Ermineskin. Wilkinson said the proposed mine expansion would adversely affect the treaty rights of other First Nations that oppose the project. (CBC, Government of Canada)

Audit report changed to downplay Ohio coal subsidies: Internal Public Utilities Commission of Ohio (PUCO) documents reveal staff requested that a report by an auditor adopt a “milder tone and intensity” when discussing the subsidies for two coal plants provided under Ohio’s controversial 2019 nuclear and coal plant bailout legislation. The legislation, which extended the coal plant subsidies until 2030, has been at the centre of a FBI investigation into payments to former Ohio House Speaker Larry Householder and others. In a September 2020 email a PUCO employee specifically identified the statement that “keeping the plants running does not seem to be in the best interests of the ratepayers” as problematic. The statement did not appear in the final report. The official also requested that the auditor reduce the “level of detail/specifics” about the scandal, including a mention of the charges against Householder. (Ohio Capitol Journal)

Coal plant closures eased Turkey’s air pollution but problems remain: A report by the Right to Clean Air Platform (THHP), a Turkish NGO, has found the average annual PM10 fine particle pollution levels recorded at 97.7 per cent of the 175 measurement stations exceeded World Health Organization standards. The report notes air quality temporarily improved in the first half of 2020 after five coal-fired power plants were forced to shut down for breaching environmental legislation. However, some of the plants were later restarted. THHP also notes there is still no national PM2.5 fine particle pollution standard and the highest sulphur dioxide pollution levels in 2020 were recorded in Manisa province where the 510 MW Soma coal plant is located. In a significant shift the Turkish Government has recently announced it would ratify the Paris Agreement and has adopted a target of net-zero emissions by 2053. Turkey has 25 proposed coal units with a combined capacity of 12,135 MW and a further three units with a combined capacity of 1465 MW currently under construction. (Right to Clean Air Platform, Al Jazeera)

“We hope that Japan will not only end the domestic use of coal, but also find a way to pull out of or find alternatives to remaining coal projects it is financing in Indonesia and Bangladesh,”

said Julia Longbottom, the UK’s Ambassador to Japan.


Australia: Minister for Environment approves Glencore application to expand Mangoola thermal coal mine in NSW.

Canada: Fears Teck Resources’ potential sale of its British Columbia coal mines could leave taxpayers with rehabilitation liabilities.

Chile: As senate vote nears on 2025 coal phase-out bill, industry proposes 2028 to 2030 as an alternative end date.

Europe: A coalition of civil society groups has called for a ban on fossil fuel advertising and sponsorships.

Germany: In a protest against the proposed demolition of Lutzerath village, activists blocked roads and occupied machinery in the Garzweiler lignite mine in North Rhine-Westphalia.

New Zealand: Two milk and meat processing plants have entered into agreements to decommission coal boilers and convert them to electricity.

Norway: The state-owned Mine 7 to close in 2023 as Svalbard switches to renewable generation.

Papua New Guinea: Church and community groups urge Australian company Mayur Resources to drop plans for coal mine and power plant.

UK: Planning inspector’s report into West Cumbria Mining’s proposed mine to be finalised by late December or early January.

US: Kentucky officials seek court order for over US$3 million from West Virginia Governor, Jim Justice, and associated companies for failure to meet environmental standards on coal mining leases.

US: Four former Armstrong Coal officials charged with falsifying coal mine air quality data will face trial in November.

“I’d be highly surprised if there is still a significant coal mining industry after 2040,”

said Frans Timmermans, the European Union’s Executive Vice-President for the European Green Deal.

Companies + Markets

Indian utilities hit by high prices: In response to increasing imported coal prices and rebounding power demand, Indian utilities turned to cheaper domestic coal supplies in the hope global prices would decline. However, data from the Central Electricity Authority (CEA) shows that since the start of the year domestic stockpiles have dropped from over 37 million tonnes to just 8.3 million tonnes in late September. CEA data also show 101 coal plants, with a combined capacity of 125,530 MW, have less than eight days supply of coal stockpiled. While Coal India has increased production, Indonesian exports have been affected by heavy rainfall. Some Indian utilities have sourced discounted cargoes of up to 2 million tonnes of coal stranded in Chinese ports due to the Chinese ban on Australian imports. The government has also amended regulations to allow coal from mines initially allocated for ‘captive’ industrial use to sell half of their production into the market. (Platts, Bloomberg, Reuters)

Vietnam’s draft power plan to be submitted to PM soon: Vietnam’s Ministry of Industry and Trade plans to submit the latest draft power plan for 2021–2030 to Prime Minister Pham Minh Chinh soon. It is expected the plan will be finalised this year. A survey of energy industry insiders by GreenID, a leading Vietnamese NGO, suggested that 18 coal power projects with a combined capacity of 20,400 MW included in the draft plan are considered likely to struggle to attract finance. Fourteen of the proposed projects would be reliant on imported coal. The Director of GreenID, Nguyen Thi Khanh, said recently announced restrictions on coal finance by China, Japan and South Korea meant the door was almost closed for international finance for the countries’ coal projects. Vietnam has the world’s fourth largest pipeline of proposed and under construction coal plants after China, India and Indonesia. (Dan Tri Online [Vietnamese], Saigon Times [Vietnamese])

South African regulator rejects Eskom’s proposed power price increase: Eskom’s bid for a power price rise for the period 1 April 2022 to 31 March 2025 has been rejected by the National Energy Regulator of South Africa. The magnitude of Eskom’s requested power price rise is unknown but is rumoured to be a double-digit increase to cover its operating losses. Over the last decade the power price has increased by 175 per cent with Eskom’s sales declining by almost 15 per cent. The regulator said Eskom can apply for an interim price rise under a new process that has yet to be finalised. However, the utility said the new application process would not be completed by April 1 2022 and would be vulnerable to legal challenges. “If the consumer doesn't pay, then it’s the taxpayer that needs to pay,” said an Eskom spokesperson. (Eye Witness News, National Energy Regulator of South Africa [Pdf], Eskom)

NGOs alarmed at World Bank’s support for Indonesian utility: A coalition of a dozen Indonesian civil society groups has criticised the World Bank’s new Country Partnership Framework for Indonesia for 2021–2024 arguing it proposes providing significant financial support for PLN, the government-owned utility, despite its plans to press ahead with 20,000 MW of coal plants. The groups have expressed alarm that support by the World Bank’s private risk insurance arm, the Multilateral Investment Guarantee Agency, as a debt guarantor for PLN’s debt of 500 trillion rupiah (US$35 billion) will help enable PLN’s push for more coal plants. They also expressed concern that the International Finance Corporation, the Bank’s private investment arm, has provided loans though Hana Bank Indonesia for the 2000 MW Java 9 and 10 coal plant. (Bretton Woods Project)

Zimbabwe temporarily lifts ban on coal exports: The Coal Producers Association, Zimbabwe’s coal industry lobby group, says the government has agreed to allow the export of 200,000 tonnes of thermal coal due to low demand by the 920 MW Hwange coal plant. Exports have previously been banned. The plant, which is often offline due to breakdowns, is being expanded; two new units with a combined capacity of 670 MW are due to be commissioned in 2022. While the associated mine is producing about 250,000 tonnes of coal a month, the power station is currently running well below capacity and consuming about 150,000 tonnes per month. Although global coal prices are at an all-time high, exports to other Southern African countries or overseas will require resolving port and other logistical challenges. (Reuters)

The allure of automation for coal companies: Estimates by the New South Wales Treasury that 18,000 jobs or 80 per cent of current jobs will disappear by 2050 allows for the increasing automation of mine sites. While mining automation, such as autonomous drilling and haul truck operations, has been pioneered in the huge iron ore mines in Western Australia, the technology is increasingly being deployed in open cut coal mines in Queensland and New South Wales. “Now we're starting to see more customers coming to us and wanting to talk about automation on the east coast coal market,” said Alex Grant from Epiroc, a mining services company. Grant said the vision was of turning mines into “a full sort of production line … that is fully automated.” (ABC News)

IEA sees limited role for hydrogen fuels in power sector: An International Energy Agency (IEA) report into the potential of hydrogen in a clean energy transition finds little prospect of hydrogen-based fuels substituting for coal in bulk power generation. While some countries, such as Japan, have touted using ammonia to co-fire coal power plants to reduce emissions, the IEA estimates that by 2050 hydrogen-based fuels may account for only 1–2 per cent of electricity primarily in assisting with power system stability and flexibility. The IEA’s modelling assumes the use of hydrogen-based fuels as an alternative to coal generation requires high carbon prices to offset the cost of plant modifications, high fuel costs and transport charges. (International Energy Agency)

Global coal exports still lower than pre-pandemic levels: While global coal exports by the major exporters — Australia, Colombia, Indonesia, Russia, South Africa and the US — have increased each of the last five months to August, volumes are still lower than before the COVID-19 pandemic began. Coal exports by the top six exporters for January to August 2021 were 634 million tonnes or a 3.2 per cent increase on the same period in 2020. However, it is still 6.5 per cent or 44.4 million tonnes lower than for the same period in 2019. (Argus)


Phasing out coal in the EU’s power system by 2030, Agora Energiewende, October 2021. (Pdf) (The modelling is available here.)

This 34-page report argues that the European Union’s emissions reduction target of 55 percent by 2030 based on 1990 levels can only be achieved if coal is overwhelmingly replaced by solar and wind energy.