January 9, 2020
Issue 305  |  View Past Issues
CoalWire

Editor's Note

Best wishes for the New Year. While 2020 has only just begun there have been both some very welcome and very alarming developments since the last edition.

In the US, a long-running campaign and legal action by a coalition of environmental groups has resulted in Duke Energy agreeing to clean up all of its coal ash dams in North Carolina. In the Netherlands, a court ruling has increased pressure on the government for the early closure of the country’s remaining coal plants.

A United Nations report has urged Ireland to end its use of coal from the Cerrejon mine in Colombia due to human rights impacts. A Chinese-Government-backed think tank has co-authored a study outlining a pathway for China to help meet the climate target of limiting the global temperature increase since industrialisation to 1.5 degrees Centigrade. The study is a counterpoint to lobbying by industry-backed think tanks promoting more coal plant construction.

Other countries with a politically well entrenched coal industry continue to fail to protect their citizens. The firestorms engulfing larges parts of Australia point to a destabilised climate and have spurred increased debate over the impact of continued fossil fuel development. However, so far, the Australian Government remains wedded to the continued expansion of the coal industry. In India, the office of Prime Minister Narendra Modi is proposing to waive the carbon tax to boost the profitability of coal power generators. A December 2019 deadline first issued by the Indian Government in 2015 requiring the installation of new pollution control equipment has come and gone but numerous coal plants continue to flout the law. Others, such as Adani and NTPC, are lobbying for major deadline extensions for some of their plants.

Bob Burton

Campaigns

Netherlands court upholds climate ruling increasing pressure for coal closures

The Netherlands Government is under increasing pressure to accelerate the closure of coal plants after the Dutch Supreme Court upheld a lower court ruling requiring the government to reduce greenhouse gas emissions by at least 25 per cent by 2020 compared to 1990 levels in order to meet its obligations under the European Convention on Human Rights. In 2018 Dutch greenhouse gas emissions were estimated to be 15 per cent below 1990 levels with current projections varying between a 19 and 23 per cent reduction by the end of 2020. While Vattenfall’s 680 MW Hemweg 8 plant closed in December, the government faces pressure to close further capacity at one of the country’s three remaining coal plants including RWE’s 1600 megawatt (MW) Eemshaven Power Station or Engie’s 800 MW Maasvlakte Power Station, both of which were commissioned in 2015. (DutchNews.nl, Urgenda)

Top News

Report urges China to scrap plans for new coal plants: A study by the Chinese government-backed Energy Research Institute and the University of Maryland Center for Global Sustainability argues that China can help meet the Paris Agreement goals by cancelling plans for new coal plants and closing the 112,000 MW of plants which don’t meet current pollution standards. The study argues that China should cut annual operating hours which would lower the risk of stranded assets and shift the role of coal plants to meeting peaks in demand. This phased reduction would in turn facilitate the growth of renewables and cut emissions. Ahead of the development of China’s 2021-2025 five year energy plan Chinese coal industry-backed think tanks have promoted a major expansion in coal capacity as a way of boosting the country’s sluggish economy. (Reuters)

Study finds US coal plant closures cut death toll and boosted agriculture: A study published in Nature Sustainability estimates that the closure of old coal plants between 2005 and 2016 cut premature deaths in the US by 26,610 due to a reduction in fine particle and ozone pollution. The study also estimated that reduced pollution boosted the production of corn, soybeans and wheat by an estimated 570 million bushels in the immediate vicinity of the closed plants. The study estimated that the costs of not shutting coal plants down over the period caused over 329,000 premature deaths and reduced agricultural production by 10.2 billion bushels of grain crops. Between 2005 and 2016 the study estimates that 334 coal-fired units at 138 facilities in the continental US were closed. Even with the commissioning of 612 new natural-gas units, the study found that the combination of coal plant closures and pollution control upgrades resulted in net reductions in sulphur dioxide and nitrous oxides emissions of over 80 per cent and 60 per cent respectively. (The Hill, Nature Sustainability)

US NGOs settlement leads to massive coal ash cleanup: On behalf of a coalition of NGOs the Southern Environmental Law Centre (SELC) has reached an agreement with Duke Energy and the North Carolina Department of Environmental Quality requiring the company to excavate about 80 million tons (73 million tonnes) of coal ash from six unlined and leaking dams. The excavated ash will either be reused for other purposes or be relocated to a properly constructed landfill suitable for toxic coal ash by 2037 at the latest. Under previous agreements, Duke Energy was required to excavate 46 million tons (42 million tonnes) of coal ash at eight other sites in North Carolina. Since 2012 legal actions by SELC has resulted in agreements for the excavation and relocation of coal ash from every unlined coal ash dam in both North and South Carolina. (Southern Environmental Law Center)

Australian fires turn spotlight on climate and coal policies: Massive bushfires and the subsequent extreme levels of smoke pollution across major cities have revived debate over the Australian Government’s climate polices and support for coal generation and exports. Prime Minister Scott Morrison has been widely criticised for his limited response to the rapidly growing crisis which is affecting significant areas of Queensland, New South Wales, Victoria and the Australian Capital Territory. Morrison, who in February 2019 held a lump of coal aloft in Parliament to mock opposition MPs, has cancelled his participation in a trade trip to India with a delegation of industry leaders which included promoting coal sales with Mark Vaile, the CEO of Whitehaven Coal. (Guardian, Dan Gocher [Twitter])

UN report flags human rights concerns over Ireland’s use of Colombian coal: The United Nations Committee on the Elimination of Racial Discrimination (CERD) has called on Ireland to “consider stopping purchasing coal from the Cerrejon mine” in Colombia due to human rights impacts. The Electricity Supply Board, a utility owned by the Irish Government, buys some of its coal from Cerrejon for use in its 915 MW Moneypoint power station. Cerrejon supplies an estimated 60 per cent of the plant’s coal supply. The CERD report states that the Cerrejon mine “has been linked with serious abuse of human rights, particularly affecting people of African descent and indigenous peoples.” Each of BHP, Anglo American and Glencore own one-third shares in the Cerrejon mine joint venture. The Cerrejon mine is projected to produce about 27 million tonnes of thermal coal in 2020. (The Green News, Office of the United Nations High Commissioner for Human Rights)

Indian Government cancels coal block allocation: India’s Ministry of Coal has revoked the allocation of the Bankhui coal block in Odisha to the Power Finance Corporation (PFC), a national government agency charged a decade ago with developing a suite of major coal power projects. The Bankhui coal block had originally been allocated in 2010 to a PFC subsidiary to supply the proposed 4000 MW Sakhigopal Ultra Mega Power Project. With the failure of the proposed power project the associated mine was not developed. (Economic Times)

Adani and public utility seek more pollution control extensions: Despite extreme pollution across much of India, the country’s two largest utilities – the privately own Adani Power and the publicly-owned NTPC – have requested further extensions on the requirement to install flue gas desulphurisation units on some of their coal plants. The new pollution standards were first announced in 2015 with a two year compliance deadline for December 2017. After lobbying by power producers the deadline was amended to December 2019 with some plants granted extensions up to December 2022. NTPC has requested a two-year extension for its 750 MW Bongaigaon plant in Assam while Adani has sought a three-year extension to March 2023 for fitting FGD unit to its 1370 MW Raikheda in Chattisgarh. The requested extensions come as power plants surrounding New Delhi continue to operate despite not complying with the December 2019 deadline. (Reuters, Times of India)

Doubts over Adani project for Bangladesh: Hemant Soren, who was sworn in as Chief Minister of Jharkhand state in late December, has indicated that he will revisit the issue of Adani’s proposed 1600 MW Godda power plant which is being built to supply power to Bangladesh. “The interest of state will be the first priority,” he said. The project has been mired in controversy over forcible land acquisition without a landowners meeting being convened, which led to protests against the project. The Institute for Energy Economics and Financial Analysis (IEEFA) has criticised the project as  economically unviable as it proposes to sell electricity for double the cost of solar or wind generation in Bangladesh. IEEFA argues Adani wants the project to provide a captive buyer for coal from its proposed Carmichael coal mine in Australia. (Telegraph India)

Ally of Hungarian PM offloads coal plant to state: Opus Global, a company owned by a close friend of Hungarian Prime Minister Victor Orban, has sold the 876 MW lignite-fired Matrai Eromu plant to the state-owned utility MVM. The terms of the deal have not been disclosed. However, the purchase means that the state utility will have to cover the estimated 300 billion forint (US$1 billion) cost of upgrading the plant to meet European Union pollution standards.  Opus Global had proposed an end to lignite generation by 2029 and the replacement of the existing five units with a mix of gas generation, a biomass unit, solar capacity, batteries and a waste burning unit. The European Union’s carbon price is making burning lignite, the most polluting form of coal, uneconomic. (Bloomberg)

News

Australia: After completing construction of two water pipelines for its Maules Creek mine, Whitehaven Coal has gained retrospective approval.

Australia: Just before Christmas the NSW Independent Planning Commission approved a five million cubic-metre expansion of Eraring Power Station's coal-ash dam.

Cambodia: Prime Minister Hun Sen issues directive to agencies to cut pollution but NGO queries lack of information about three proposed coal plants.

India: Environmental clearance for Maharashtra State Power Generation Company’s proposed Gare Palma coal block in Chhattisgarh has been deferred once again.

India: The Central Bureau of Investigation has registered a case over alleged irregularities in the 1998 allotment of Kilhoni block in Maharashtra to Nippon Denro Ispat, now JSW Ispat Steel.

Philippines: Department of Energy partially lifts suspension order imposed after a November 15 mudslide killed a worker at Semirara Mining’s coal mine in Antique.

South Korea: Restrictions on coal generation result in fine dust emissions from coal plants falling by 36 per cent in the first three weeks of December compared to the same period in 2018.

Spain: Government of Belearic Island announces that two coal units at the Es Murterar coal plant have been closed and reduced operating hours imposed on the remaining two units until replacement in 2021-2026 period. [Spanish]

Sri Lanka: Catholic Archbishop of Colombo, Cardinal Malcolm Ranjith, opposes more proposed coal plants due to health risks to nearby residents.

US: Fifth railway blockade delays coal deliveries destined for Merrimack power station, one of the last plants in New England.

Companies + Markets

US coal index stocks shed half value in 2019: The stocks of US coal companies included in the SNL Coal Index declined by 53.5 per cent in 2019 while the broader S&P 500, which covers the 500 largest companies registered on US stock exchanges, increased by 28.5 per cent over the same period. The SNL Coal Index includes, amongst others, Peabody Energy, Contura Energy and Arch Coal. (S & P Global)

Bank of England head warns on need for finance sector action to accelerate: The outgoing head of the Bank of England, Mark Carney, has warned that “up to 80 per cent of coal assets will be stranded” if companies and governments aligned their policies and practices with the 1.5 degree Paris Agreement goal. Carney warned that current commitments put the world on track for a temperature increase of 3.7-3.8C. He said that while banks and asset managers are increasingly disclosing their investments in fossil fuels, “it’s not moving fast enough.” (BBC)

Adani loses bid for plant and faces troubles in India and Australia: Adani Power lost out to NTPC in the auction of the distressed 600 MW Jhabua power plant in Madhya Pradesh which was commissioned in 2016. Meanwhile, the CEO of Siemens is expected within days to finalise his decision on whether the company will supply railway signalling equipment for Adani’s proposed Carmichael coal mine in Australia. (Economic Times, Market Forces)

Modi Government proposes axing carbon tax on imported coal: The office of Prime Minister Nahrendra Modi has proposed waiving the imposition of a carbon tax of 400 rupees (US$5.61) per tonne of coal in a bid to boost the financial viability of power generators and distribution utilities. Private power utilities have been lobbying the Indian Government for subsidies to cover the cost of upgrading pollution controls on coal plants, with most due to meet the new standards in 2022. The carbon tax comprises about 0.25 rupees of the 3.50 rupees per kilowatt hour which coal generated power sells to distribution utilities for. However, with renewable power selling for about 2.50 to 3.0 rupees per kilowatt hour, Nandikesh Sivalingam from the Center for Research on Energy and Clean Air fears the suspension of the carbon tax would slow both the growth of renewable generation and the pace of the transition away from coal. The Modi plan comes as private coal power generators demand a suite of policies aimed at boosting declining plant load factors of otherwise unprofitable plants. (Reuters, The Hindu)

Australian council opposes mine expansion over dubious job claims: Narrabri Shire Council in north-west New South Wales has withdrawn its support for Whitehaven’s proposed expansion of the Vickery coal mine due to doubts about the company’s claimed jobs. A report by council staff argued that the company’s claim that an additional 450 jobs would be created during operation “appear flawed and the purported economic benefits to the community of Boggabri seem unlikely to materialise.” The Council had been negotiating a voluntary financial contribution from the company but rejected the company’s proposal of $125,000 a year for each year of the mine’s operation. “That wouldn't even fix the pot holes they create in the road,” said Councillor Ron Campey. (Northern Daily Leader)

Regulator slashes coal costs for Pakistan project:  A bid by Sino Sindh Resources Limited (SSRL), which is developing the 7.8 million tons per annum (mtpa) Thar block-1 coal mine, to supply coal for a nearby coal plant at US$50.625 per tonne has been rejected by the Thar Coal Energy Board (TCEB). The TCEB has directed that coal from the mine be supplied to 1320 MW Thar Block-I power station for US$35.84 per tonne. TCEB argues SSRL needs to employ more efficient mining methods to lower the cost of supply to the plant. The power station is currently being built by a subsidiary of Shanghai Electric with support from Chinese banks. (The News, Global Energy Monitor)

Indonesia retains domestic market obligation unchanged: The Indonesian Government has rebuffed lobbying by coal companies and decided to retain its domestic market obligation which requires mining companies to supply 25 per cent of production to the local market at a price of no more than US$70 per tonne in 2020. Coal companies had been lobbying for the obligation, which was introduced in March 2018, to be softened. The policy has also been criticised as subsidy of well over US$1 billion a year for domestic coal power generators and undercutting the market for new renewables generation. The Indonesian Government favours the retention of the policy as a way of avoiding politically unpopular power price increases. (Reuters)

Resources

A High Ambition Coal Phaseout in China: Feasible Strategies through a Comprehensive Plant-by-Plant Assessment, University of Maryland Center for Global Sustainability, the Energy Research Institute of the National Development and Reform Commission of China and the North China Electric Power University,  January 2019. (Pdf)

This 44-page report outlines a pathway which would enable China to meet its stated “high ambition” goal of helping meet the Paris Agreement goal of limiting global heating to 1.5 degrees above preindustrial temperatures.