The next coal war? Industry versus its customers.
US coal companies are increasingly turning on their former utility industry allies as cleaner alternatives become the cheapest source of power generation, writes Jeffrey Tomich in E&E News.
The diversion of Colombia’s Bruno River hits local communities hard
The diversion of the Bruno River in Colombia by the Cerrejon Coal Company, a subsidiary of BHP, Glencore and Anglo American, is both in breach of a court ruling and wrong, writes Sebastian Ordonez, Senior International Programmes Officer at War on Want in DeSmog.
Mongolia’s coal boom reshapes country’s landscape and economy
The rapid growth of Mongolia’s coal exports to China is having a profound effect on the country’s water resources, landscapes and economy, writes Emily Kwong in NPR.
Australia’s largest bank to end coal lending by 2030
In its latest policy update to its environmental and social framework, the Commonwealth Bank of Australia spanCBA), the country’s largest financial institution, stated it is reducing its financial support for thermal coal mining and power generation “with the view to exiting the sector by 2030, subject to Australia having a secure energy platform.” The revised policy also states that the CBA will only provide bank and financial services to new metallurgical coal mining projects, along with oil and gas plans, “if in line with the goals of the Paris Agreement.” The NGO Market Forces has welcomed the change, noting that owners of Australian coal mines and power plants would not be able to get funding from the country’s largest bank or two of the largest insurers after 2030. Market Forces also urged the CBA to eliminate loopholes from its policy and acknowledge that the Paris Agreement requires coal, oil and gas emissions to rapidly decline. (Market Forces, Commonwealth Bank of Australia)
Malaysian state government rules out coal mining in World Heritage site: Shafie Apdal, the Chief Minister of the Malaysian province of Sabah, has ruled out the possibility of coal mining in Maliau Basin Conservation Area. Previously, Apdal had welcomed the suggestion by Prime Minister Mahathir Mohamad that coal deposits in Sabah and Sarawak could be mined.. Civil society groups in Sabah have campaigned for the protection of the Maliau Basin as a World Heritage site, and oppose mining in Maliau, urging the government to ensure new power generation was from renewables. (Malay Mail)
Australian coal lobby plans advertising campaign to boost coal: COAL21 is proposing a $4–5 million advertising campaign aimed at “maintaining and enhancing” the reputation of the coal industry and “rebutting false campaigns by activist groups and optimising opportunities.” Coal21 has called for expressions of interest from advertising agencies, and staff from the Minerals Council of Australia has been closely involved in planning the campaign. BHP, which is one of the largest funders of the two groups, claimed it supported the campaign, which would be about carbon capture and storage (CCS). However, the Australasian Centre for Corporate Responsibility called on BHP to end its membership of the two groups as the campaign was not about CCS but promoting coal despite the company’s recent warnings stronger action on climate is required. (ABC)
Court rules against Polish coal plant joint venture agreement: The District Court in Poznan has ruled that a resolution by Enea authorising support for the construction of the 1000 megawatt (MW) Ostroleka C coal plant was invalid. The Polish Government owns 51.5 per cent of Enea; the remainder is privately held. ClientEarth, which launched the legal action, also argued that Enea’s board decision should also be overturned on the grounds that support for the €1.2 billion (US$1.3 billion) project would harm the financial interests of the company and shareholders. However, the court didn’t rule on this aspect of the case. Enea has the option to appeal against the decision. (Climate Home News, ClientEarth)
RWE decides to close Aberthaw B coal plant in the UK: The giant German utility RWE will close the 1560 MW Aberthaw coal plant in South Wales on March 31, 2020. RWE announced that the closure of the plant, which was commissioned in 1971, was due to “challenging” market conditions for coal plants in the UK. RWE had won capacity market agreements for the Aberthaw plant for 2019–20 and 2020–21. The utility said that some of these capacity agreements will be transferred to other units in its fleet and some will be transferred to unnamed third parties. RWE said details of the transfer of the capacity market agreements were confidential. Only four UK coal plants will remain operating after the closure. (Guardian, RWE)
US judge rejects part of Duke Energy appeal against North Carolina coal ash decision: A North Carolina judge has dismissed part of an appeal by Duke Energy and reaffirmed that the Department of Environment Quality (DEQ) has the power to direct the company to clean up all of its coal ash ponds by 2030. Duke Energy had claimed that capping its nine leaking coal ash dams at six sites in the state would prevent further pollution. However, in April DEQ directed that all Duke Energy’s coal ash dams be excavated and the contents relocated to lined pits. While the ruling is a setback for Duke Energy, the court has yet to hear arguments on whether DEQ’s preferred solution is appropriate. (North Carolina Health News, Southern Environmental Law Center)
China approves a raft of new coal mines: In the first half of 2019, China’s National Energy Administration (NEA) has approved the construction of 141 million tonnes of new annual coal production capacity. Over the whole of 2018 the NEA approved the construction of new mines with just 25 million tonnes of capacity. The new mine approvals included expansion of existing mines as well as new ones in Inner Mongolia, Xinjiang, Shanxi and Shaanxi which have been designated as coal ‘bases’ where future coal production will be concentrated. Greenpeace energy analyst Lauri Myllyvirta said that while some of the new mines would be replacing exhausted mines it seemed that China was planning to continue high levels of coal production despite its obligations under the Paris Agreement. (Reuters)
UN report notes companies linked to Myanmar’s military in coal projects: A United Nations Human Rights Council report notes the involvement in coal projects by companies owned by the Myanmar military. The report notes that Myanmar Economic Holdings Limited has an interest in a coal mine in Sagaing State while another military business conglomerate, Myanmar Economic Corporation, is in a joint venture with the Hong Kong-based Saraburi Coal Company which has a coal mine in Shan State. Another company, the Eden Group, which donated funds to the military, operates the Tigyit mine, Myanmar’s largest coal mine in Shan State, together with a mine-mouth power plant. The report also notes the Adani Group has agreed to pay US$290 million to the Myanmar military to lease land for a port. (Human Rights Watch, United Nations Human Rights Council)
“The world’s moving away from coal, that’s the sentiment I can’t change or deny, that is the sentiment in the majority of the world. I just have to play along,”
said Yuichiro Yoi, a senior executive with the Indonesian office of the Asian Development Bank.
Australia: NSW Minister for Planning agrees to review Shenhua’s data after community group identifies 182 metre difference in projected water drawdown between two coal mine proposals in the same area.
Australia: Queensland Government calls for tenders for up to five new coal mines in the Bowen Basin.
Australia: West Australian utility to retire two units at Muja plant early as renewables undercut coal plants.
China: Sinopec says trial production has started at a coal-to-chemical plant in Anhui province.
Indonesia: Government-owned utility announces interim director for remainder of 2019 following the resignation of the previous director after corruption charges were laid over new coal plant approval.
Malaysia: Maritime authorities detain coal ship captain and engineer for dumping coal dust in sea.
Myanmar: Residents alarmed at prospect of coal-fired fish processing factory in Rakhine state.
Poland: Billionaire owner of lignite power generator Ze Pak announces it will invest in renewables and biomass.
US: Former AES lawyer who has been appointed as Governor faces challenges over his past power utility ties.
Asian Development Bank avoids coal lending without formal policy: Yuichiro Yoi, a senior Indonesian executive with the Indonesian office of the Asian Development Bank, has indicated that the bank is avoiding involvement in coal projects in Indonesia. “Going forward it’ll be more difficult to do a project with coal. Now you not only worry about reputation but also have to worry about the risk of losing money,” he said. (Jakarta Post)
Report argues most German lignite plants don’t warrant compensation: An analysis by Sandbag, a UK-based climate think tank, has found that that of the 18 units commissioned before 1990, not one covered their fixed costs during the first half of 2019. The units have a combined capacity of 8600 MW. Sandbag estimates that old pre-1990 lignite units lost €476 million (US$579 million) in the first half of 2019 compared to their estimated costs. The 10 lignite-fired units built after 1990, which have a combined capacity of 8700 MW, are estimated to have lost an estimated €188 million (US$229 million) in the first half of 2019. Sandbag argues that negotiations over RWE and LEAG bids for compensation for the closure of 3000 MW of coal plants by 2022 should only proceed after the companies have publicly disclosed details of their plant valuations. Sandbag argues German lignite plants are currently unprofitable and this is likely to continue in the near term. (Sandbag)
PetroVietnam broadens to include renewables and rescue stranded coal plant: PetroVietnam (PV) has approved the expansion of its power generation subsidiary, PetroVietnam Power Corporation (PV Power), into renewable energy. PV Power currently has interests in coal and gas plants; the wider charter reflects the rapid growth in renewables in the country. PV Power is also seeking approval to restart construction on the 1200 MW Thai Binh-2 coal plant, which stalled when international banks withdrew funding for the US$1.6 billion project after the former head of PetroVietnam was charged with embezzling funds and sentenced to 13 years in jail. The project was funded by a coalition of Japanese, South Korean and Chinese banks. PV is seeking to use its own funds to complete the project, which is about 80 per cent built. Work on the project first began in 2011 but is now delayed until at least 2021. (Nang Luong Vietnam [Vietnamese], Vietnamnet Global, Global Energy Monitor)
Indian ministry set to propose plan to cut thermal coal imports: India’s Ministry of Coal is reportedly drafting a plan to cut India’s growing coal imports by one-third to 150 million tonnes by 2024. In 2018, India imported 235.2 million tonnes of thermal and metallurgical coal. The mooted plan proposes increasing Coal India’s domestic production to 880 million tonnes from the 607 million tonnes it produced in the year to the end of March 2019. Past plans for big increases in domestic thermal coal production have struggled due to rising costs, transport bottlenecks and opposition of local communities to loss of lands and forests. (Bloomberg)
US utility dismisses CCS technology for San Juan plant as “unproven, costly” technology: The Public Service Company of New Mexico (PNM), which owns the 1848 MW San Juan Generating Station slated for closure in 2022, has told a public hearing that it abandoned the idea of fitting the plant with carbon capture and storage (CCS) technology due to costs and increased water demands. PNM’s Senior Vice President for Public Policy, Ron Darnell, told a public hearing that a study in 2010 by the consultancy company Sargent & Lundy estimated the CCS plant would cost US$1.5 billion, require 80 per cent more water and self-consume 25 per cent of the power generated. Darnell said PNM decided against “betting” on what it considered “unproven, costly technology.” The City of Farmington is proposing to enter into an agreement with Enchant Energy, a newly formed company with no previous power industry experience, to buy the San Juan Generating Station and fit it with CCS technology in a bid to keep the plant open beyond 2022. Enchant Energy is seeking a US$5.8 million Department of Energy grant to in part hire Sargent & Lundy to do another study on fitting CCS to the plant. (Farmington Daily Times, Institute for Energy Economics and Financial Analysis)
Report reveals BlackRock blows billions on dud fossil fuel assets: A study by the Institute for Energy Economics and Financial Analysis (IEEFA) estimates that BlackRock, the world’s largest fund manager, lost US$90 billion on fossil fuel investments over the last decade including in coal companies, power utilities and power plant equipment suppliers. The report argues that BlackRock’s statements on climate are not matched by their investment practices or their voting pattern on pro-climate shareholder resolutions. Aside from poor performance of its major oil investments, BlackRock has significant shareholdings in US coal companies such as Peabody Energy and Cloud Peak Energy and major power utilities such as RWE and E.ON in Europe and NTPC in India. IEEFA estimates BlackRock lostUS$19 billion from its investment in General Electric, which failed to anticipate the dramatic decline in demand for fossil fuel generation. (Institute for Energy Economics and Financial Analysis)
General Electric and Chinese company back Mozambique coal plant: General Electric (GE) and China Machinery Engineering Corporation (CMEC) have entered into an agreement with Ncondezi Energy to “co-develop and construct” a proposed 300 MW coal plant and associated mine in Tete province in Mozambique. Under the terms of the agreement it is proposed CMEC would be responsible for the construction of the plant and GE for key power plant components including the boiler, turbines and generator. The companies have yet to negotiate a power purchase agreement or power concession agreement with Electricidade de Mocambique and the Mozambique Government. Ncondezi Energy first proposed the project around 2012 but has struggled to find partners to reach financial close. (Ncondezi Energy, CoalSwarm)
Indonesian coal demand grows: The publicly owned utility PLN estimates coal use by Indonesia’s domestic power sector will increase by 12 per cent to 109 million in 2019 due to the commissioning in September of the Jawa 7 and Jawa 8 power plants. The two plants have a combined capacity of 2000 MW. In 2018, Indonesia produced 528 million tonnes of thermal coal, far higher than its target of 485 million tonnes. The higher-than-estimated production is driven partly by projects approved by regional government. Indonesia’s resources agency estimates production in 2019 of 490 million tonnes. (Jakarta Post, Platts)
The cash cow has stopped giving: Are Germany's lignite plants now worthless?, Sandbag, August 2019. (Pdf) An Excel file with the valuation of German lignite plants can be downloaded here.
This 14-page report details how Germany’s lignite-fired plants have become unprofitable at a time when major utilities are involved in negotiations with the government for compensation over proposed coal plant closures.