Japan races to build new coal-burning power plants, despite the climate risks
As the Japanese Government continues to back new coal plants, one of the proposed new projects is facing a legal challenge from residents wanting to prevent pollution and cut greenhouse gas emissions, writes Hiroko Tabuchi in the New York Times.
Court orders cancellation of permit for Indonesian coal plant: Indonesia’s Supreme Court has ruled in favour of the revocation of a permit issued to PT Mantimin Coal Mining (MCM) for a proposed coal mine. The court ruled in favour of indigenous groups that MCM should not have been issued a permit as it had not undertaken an environmental impact assessment, a process which would have required local approval. Central Hulu Sungai is the only district in South Kalimantan province which has refused to allow both coal mining and palm oil plantations. The court ruling was issued in October but the permit has yet to be revoked. (Mongabay)
Anglo American flags thermal coal exit: Anglo American’s CEO, Mark Cutifani, has announced that the company will exit thermal coal mining during his term. “You’re not talking five years, it’ll be earlier than that,” he said. Anglo American, which produced 26 million tonnes of thermal coal in 2019, operates six mines in South Africa and has a one-third share in the Cerrejon thermal coal mine in Colombia. In 2019 it also produced 23 million tonnes of metallurgical coal from six mines in Australia. (Bloomberg)
UK brings coal exit forward by a year to 2024: UK Prime Minister Boris Johnston has announced that the UK will aim to bring the end date for coal power generation forward by a year to October 2024, subject to public consultation. The UK currently has four coal plants, one of which is scheduled to close in March 2020 with other plants reliant on the results of a forthcoming capacity auction. Drax, which operates the Drax power station, has indicated that it is unlikely to operate the two coal units at the plant beyond September 2023 when its current capacity contracts expire. Coal currently generates about three per cent of UK electricity. While the government is committed to ending coal use for power generation, it recently granted approval for the Woodhouse Colliery, a metallurgical coal mine. (UK Government, FT, Metro)
Protest shuts down new German coal plant: About 150 environmentalists occupied Uniper’s near-complete 1000 MW Datteln 4 coal plant in a protest against the German Government agreeing to allow the plant to be commissioned. In early 2019 the government-appointed coal exit commission recommend that the plant not be allowed to be brought online. Finnish environmentalists have also protested against the plant as Finland's majority-state-owned energy firm Fortum’s is set to increase its stake in Uniper from 49.9 per cent to 70.5 per cent. The protest came just after the German Cabinet agreed on a draft bill to close 18,000 MW of lignite plants and 21,000 MW of hard coal capacity by 2038. (Deutsche Welle, YLE, Platts)
Indian regulator still not enforcing pollution standards: Prashant Gargava, a member of India’s Central Pollution Control Board, has indicated possible penalties have yet to be determined for the operators of ten coal plants that did not comply with the December 2019 deadline to install flue gas desulphurisation (FGD) units. Only one of the eleven plants in the New Delhi region has installed an FGD plant and a further four have signed contracts for the installation of the units. Gargava suggested possible penalties would take account of how far the companies have proceeded in complying with the standards. While the new standards were first announced in December 2015, Gargava claimed the 2019 deadline was ambitious. (Reuters)
Australian coal baron spent over A$83 million on anti-Labor election campaign: Data submitted by Australian political parties on donations received in the 2018–19 financial year reveal that Adani subsidiaries contributed A$100,000 (US$81,635) to the National Party, a pro-coal party which is a coalition partner in the federal government and a further A$100,000 to the Liberal Party. The declarations also revealed that Clive Palmer’s private company Mineralogy, donated $83.7 million (US$56.1 million) to his Palmer United Party which campaigned strongly against the Labor Party in the May 2019 federal election. In October 2019, Waratah Coal, a company owned by Palmer, renewed its application for the proposed 40 million tonnes a year Galilee Coal project near Adani’s proposed Carmichael coal mine. (Guardian, Australian Conservation Foundation)
New Zealand Regulator pressed to refuse approvals after pollution conviction: New Zealand’s largest environment group, Forest & Bird, said that the Overseas Investment Office (OIO) should block the coal mining company Bathurst Resources from owning sensitive land following a recent pollution conviction. Under New Zealand law the OIO has the power to block foreign-owned companies’ land purchases because one of the requirements is that the applicant be of good character. In November 2019 a subsidiary of Bathurst Resources was convicted of polluting the habitat of the endangered threatened Canterbury mudfish and fined NZ$18,000 (US$11,700). Forest & Bird said Bathurst Resources had previously received 27 abatement notices from the environmental regulator, Environment Canterbury. (Stuff, Forest & Bird)
European Union coal generation plummets: A report by Sandbag and Agora Energiewende has found that coal generation in the European Union fell by 24 per cent in 2019 and is now less than half the level it was in 2007. Hard coal generation dropped by 32 per cent and lignite fell by 16 per cent. The dramatic drop in coal generation, driven by increases in carbon price and increased deployment of renewables, led to a 12 per cent fall in European power sector carbon dioxide emissions in 2019, the largest fall since 1990. The report estimates that wind and solar replaced about half of the reduced coal generation with gas accounting for the other half. (Sandbag)
“Investment in oil, thermal coal and coal-based power generation is already facing severe limitations … The pressures on our industry will only increase, become more vocal and be more visible,”
said [paywall] Bold Baatar, the CEO of Minerals and Energy for Rio Tinto, which sold the last of its coal mines in 2018.
Australia: NSW Minerals Council “cautiously welcomes” proposal to limit Independent Planning Commission hearings to only the most controversial projects.
Australia: New Hope flags it may seek over A$500,000 (US$335,000) in legal costs from residents’ group led by 82 year old pensioner.
Mozambique: Ncondezi Energy looks to commence tariff negotiations shortly with Electricidade de Moçambique for a proposed 300 MW coal plant.
New Zealand: Dairy giant Fonterra, the country’s second largest coal consumer, switches its Te Awamutu plant to use wood pellets in its boilers.
Pakistan: Hub Power company subsidiary reaches financial close of US$497 million on Chinese-backed 330 MW Thar Block-II lignite plant.
Poland: To quell protests by miners, Polish minister says state-run power producer will no longer import Russian coal.
South Africa: Coal exports from the Richards Bay Coal Terminal declined marginally in 2019, with nearly all destined for the Asian market.
Switzerland: Credit Suisse authorised spying operation on Greenpeace after the group protested at the bank’s 2017 annual general meeting.
“For several centuries, the value proposition for mining, the mining company in the community has really been around job creation. And so if you are not producing jobs or producing fewer jobs, what is that value proposition to that particular community and to that host government?,”
said Andrew Swart, global mining and metals leader at Deloitte, on the impact of automation in the mining sector.
KEPCO defers decision on Indonesian coal plant: At its January 22 meeting, the board of the publicly owned Korea Electric Power Corporation (KEPCO) deferred a decision on whether to invest in the proposed 2000 MW Jawa 9 & 10 coal plant in Indonesia. Under South Korean law, public institutions planning to invest over US$42 million in a project must undertake a feasibility study. KEPCO’s October 2019 feasibility study on the Jawa 9 & 10 project revealed the project was not viable. Rather than drop the project, KEPCO reduced their proposed equity investment to US$40 million, US$2 million under the threshold for requiring a feasibility study. KEPCO is also proposing to provide a loan guarantee of US$250 million for the project. Faced with protests and public criticism, KEPCO has flagged they will seek to undertake a new feasibility study. (Hankyoreh [Korean], Hankyoreh [Korean])
Coronavirus to hit short-term demand for both thermal and metallurgical coal: Analysts argue that Chinese Government restrictions on the movement of people because of the spread of will depress economic growth in the short term and impact demand for both metallurgical and thermal coal. Wood Mackenzie argues that a decline in in power demand will hit Indonesian thermal coal producers with reports that some exporters have already been asked to delay shipments. A slowdown in construction, a major consumer of steel products, will hit demand for both iron ore and metallurgical coal. Both Mongolia and Russia also imposed restrictions on border crossing which will affect metallurgical coal exports to China. (Mining Weekly, Argus Media)
Funding squeeze on mining companies: Julian Treger, the CEO of Anglo Pacific Group, told participants at a major mining conference in South Africa that the average cost of capital for early-stage mining projects has increased by two percentage points over the past two years. “Even for companies that have good projects it’s very difficult for them to raise any money in these markets,” said Caroline Donally, from Denham Capital in the US. Fred White, associate director at London-based Medea Capital Partners said that “if you’re a small coal explorer, I don’t think you stand much of a chance of raising any money at all.” (Business Day)
Indonesia looks to retire 20 year plants but boost coal gasification: Indonesia’s Minister for Energy and Mineral Resources, Arifin Tasrif, has announced that the publicly owned utility PLN may retire coal- and coal-gas-fired units when they reach 20 years old and replace them with renewable capacity. Arifin said the 69 units have a combined capacity of over 11,000 MW. However, Arifin also said that Indonesia will aim to expand its coal gasification industry, with the government aiming to keep the cost of coal to US$20–21 per tonne for projects. He also said the government would reduce royalty rates for coal gasification projects. In 2019 the Indonesian Ministry of Energy and Mineral Resources said 10 coal units with a combined capacity of 3017 MW were commissioned, including the 1000 MW Java 7 plant built by the China Energy Investment Corporation. (Reuters, Reuters, Jakarta Post)
Indian renewables tender reveals prices lower than stressed coal projects: A renewable energy tender issued by the Solar Energy Corporation of India (SECI) for 1200 MW of firmed clean power has resulted in the two winning bids coming in with prices lower than a recent tender by a state-owned power trading company for power purchase agreements from stressed coal plants. The two winning bids for the SECI tender were for average tariff of 4.04 rupees (5.6 US cents) per kilowatt hour (kW/h) and 4.3 rupees (6 US cents) per kWh. A recent tender for stressed coal plants yielded a price of 4.24 rupees per kWh (5.8 US cents per kWh) and other tenders for new coal plants at 5–7 rupees (7–9.8 US cents) per kWh. The two winning SECI bids were for a 900 MW pumped-hydro-plus-battery project and a 300 MW renewables-plus-battery project. The results have been welcomed by the National Solar Energy Federation of India as an indication that coal plants are being priced out of the market. (PV Magazine, RenewEconomy)
Indian Railways looks to solar potential as coal freight dips: The government-owned Indian Railways has identified 51,000 hectares of vacant land, much of it adjacent to railway tracks, which could be used to establish up to 10,000 MW of solar capacity. Indian Railways’ power demand is currently serviced by about 3800 MW of grid capacity. As Indian power generation switches to renewables and coal supply is being paired more closely with nearby power plants, demand for coal freight on Indian Railways is declining, making alternative revenue streams attractive to the company. (Business Standard)
Pension funds step up divestment pressure: The Netherlands’ biggest pension fund, ABP, has announced it plans to exit its coal investments by 2030 with some exceptions. ABP said that by 2025 it is aiming to cut the carbon footprint of its assets by 40 per cent from 2015 levels. ABP manages a €465 billion (US$515 billion) pension fund for civil servants. The New York State Common Retirement Fund, the third largest pension fund in the US, has flagged that it may divest from 27 mining companies if they are not ready to move away from reliance on thermal coal revenue. The mining companies under review, including Peabody Energy, Anglo American, Shenhua, Coal India, Exxaro Resources and Adaro, all currently earn over 10 per cent of their revenue from thermal coal. (Reuters, Reuters, New York State Comptroller)
HSBC dumps Vietnamese power project: In response to an opinion column by the NGO Market Forces criticising UK-headquartered bank HSBC’s coal lending policies, the bank revealed that it had cancelled its role as the financial advisor for the proposed 1980 MW Vinh Tan 3 coal power plant in Vietnam. HSBC was appointed as financial advisor for the US$2 billion project in 2014. In 2018 HSBC announced a new coal policy that included a loophole allowing support for new coal plants in Vietnam, Indonesia and Bangladesh, all of which have major coal expansion plans. HSBC is currently arranging finance for the proposed Payra coal port in Bangladesh, a key infrastructure development to support new coal plants. (Asia Times, Eco-Business)
The European Power Sector in 2019, Sandbag and Agora Energiewende, February 2020. (Pdf)(The Executive Summary is here and the Excel data sheets are here.)
This 48-page report details the rapid decline in coal generation in European Union countries.