September 5, 2009
Issue 290  |  View Past Issues

Editor's Note

After a decade-long campaign the proposal to build the Gubin-Brody lignite mine in Poland, which would have displaced up to 3000 people, has been defeated. In Germany, a court has ruled that a major lignite mine must close until it has completed an environmental assessment of the impacts of the project on the region’s groundwater. In South Korea, three Indonesian citizens have launched a legal challenge against three financial institutions’ support for a proposed new coal plant. In Greece, the Minister for Energy has flagged the publicly owned Public Power Corporation will exit from lignite-fired generation with the “gradual closing” of its two plants. In another interesting development an analyst with Bloomberg New Energy Finance has suggested that by 2030 hydrogen could begin to displace the use of metallurgical coal in steel production.

In India, the national government is grappling with how to resolve bad loans to stressed coal and gas power projects. Adani has also revived plans to expand its 1200 megawatt (MW) Udupi coal plant, despite a court ruling that the expansion should not be considered until a suite of studies has been done. In Australia, the Queensland Government has extinguished native title over a parcel of land Adani wants to use for infrastructure for the proposed Carmichael coal mine. Part of Adani’s plan is to export Carmichael coal to its Udupi plant. In Brazil, the new right-wing government has flagged it will seek tender bids from coal generators to replace diesel plants.

Bob Burton


Coal plant deemed too polluting for China heads to Cambodia

A retired polluting coal plant in China’s Hunan province is being dismantled to be reconstructed near Sihanoukville in Cambodia, writes Lili Pike in China Dialogue.

Navajo Nation doubles down on coal. Will it work?

Navajo Nation President Jonathan Nez found out about the controversial purchase by the Navajo Transitional Energy Company of three coal mines from the bankrupt Cloud Peak Energy at the same time the public did, writes Dylan Brown in E & E News.

The bad-debt hangover from India’s coal power boom

The Indian Government is undermining measures to force necessary bankruptcies to resolve the bad loans for stressed coal power plants rather than seizing the opportunity to facilitate the expansion of renewable energy, writes Vibhuti Garg from the Institute of Energy Economics and Financial Analysis.


Polish company abandons proposed lignite mine

Polska Grupa Energetyczna (PGE), a publicly owned power utility, has abandoned plans for the proposed Gubin-Brody lignite mine after a decade-long campaign against the project by local residents and Greenpeace Poland. The proposed open-cut lignite mine would have displaced up to 3000 people and destroyed 15 villages and agricultural land. In a referendum in 2009 a majority of voters opposed the project while over 7000 people attended an August 2014 rally against the plan. In 2016 environmental regulators found major deficiencies in the company’s environment assessment and allowed up to three years for the deficiencies to be addressed. At the expiry of the three years, the Regional Director for Environmental Protection announced the application for the project has lapsed. (Greenpeace Polska [in Polish])

German court rules lignite mine must close

A court has ruled in favour of Environmental Action Germany (DUH), a German NGO, which argued that lignite supplier LEAG did not have the necessary environmental permit for the operation of the Janschwalde lignite mine. LEAG is one of the suppliers to a nearby plant owned by Vattenfall. DUH argued the damage to the region's ground water supply from the mine threatened protected swamp and wetland areas. Earlier this year the court ruled that LEAG had until August 31 to complete the environmental assessment. However, the company sought an extension until November, a request that was rejected by the court, forcing the mine to close on September 1. While the ruling cannot be appealed, LEAG claim they aim to have the required environment assessment done soon and the mine reopened in about 3 months. DUH argue that during the proceedings LEAG had admitted that it would be difficult to reconcile continued operation with the preservation of the protected wetlands. (Clean Energy Wire, ICIS, Argus Media)

Top News

Indonesian citizens sue South Korean banks over coal plant support: Three Indonesia residents have launched a legal challenge in the Seoul Central District Court seeking an injunction against three South Korean financial institutions’ support for the Jawa 9 and Jawa 10 coal units. The legal action seeks to restrain Korea Development Bank, Korea Export-Import Bank and Korea Trade Insurance Corporation from providing financial support for the two units, each of which have a proposed capacity of 1000 MW. The two units are proposed to be built by Korean construction firm Doosan Heavy and operated by Korea Midland Power, a subsidiary of Korea Electric Power Corporation. Korean government financial institutions are among the largest global financial backers of new coal plants. (Korea Herald)

Study finds low carbon intensity of Belt and Road Initiative vital for Paris Agreement: A study has found that the carbon intensity of projects funded in the 126 countries in the Belt and Road region will determine whether the Paris Agreement target of limiting global heating to at most a 2 degree increase in global temperatures is met. The study by the Tsinghua Center for Finance and Development, UK-based Vivid Economics and US-based Climate Works estimates the Belt and Road countries currently account for 28 per cent of global emissions but if a carbon-intensive path is pursued this could increase to 66 per cent by 2050. If a carbon-intensive path is pursued, such as through continued support for the construction of international coal plants, the world would be on a pathway to a 2.7 degree temperature increase even if all other countries acted to achieve a 2 degree target. (Reuters, Eco-Business)

Queensland extinguishes native title for Adani mine: The Queensland Government has extinguished native title held by the Wangan and Jagalingou (W&J) people by granting Adani freehold title to 1385 hectares of land for the company’s proposed mine workers' camp, airport and other facilities. Adrian Burragubba and others from the W&J Council have established a protest camp on the site, raising the prospect they could be arrested for trespass on land they previously had title to. A report by the Institute of Energy Economics and Financial Analysis estimates that if Adani’s Carmichael mine proceeds it could receive A$4.4 billion in subsidies over its 30-year life. (Guardian, Guardian, Institute of Energy Economics and Financial Analysis)

Adani revives Udupi expansion plan despite court order: Despite an adverse court ruling earlier this year, Adani Udupi Power Corporation has reapplied to the Indian Ministry of Environment, Forests and Climate Change for approval to expend its 1200 MW Udupi coal plant in Karnataka. In March 2019 the National Green Tribunal (NGT) found that the existing plant was “unauthorised and illegal”. Rather than order the demolition of the plant, the NGT ordered the company, which bought the plant after it was built by Nagarjuna Power Corporation and Lanco Infratech, be fined 50 million rupees (US$700,000). The NGT also insisted that “no further activities” on the proposed expansion be pursued until a study had been undertaken on the potential impact on the environment. Another hearing on the original NGT court order is schedule for September 4. (Deccan Herald)

Far-right gains in German coal state election results: State elections in Saxony and Brandenburg, both major coal-producing regions which were formerly part of East Germany, has seen support fall for both Chancellor Angela Merkel’s centre-right Christian Democrats (CDU) and the centre-left Social Democrats (SPD). The far-right nationalist party, Alternative for Germany (AfD), which campaigned heavily against coal closures, polled 27 per cent in Saxony and 23 per cent in Brandenburg. In the coal mining districts of Lusatia, which straddles both states, AfD was the most popular party. Despite AfD’s gains, a broad coalition parties is likely to form government in both states. In the last week of the campaign the national government announced that Cabinet had agreed on a bill to provide €40 billion to support states with the costs of phasing out coal power and associated mining. However, the bill has not yet been drafted. (Euractiv, Euractiv, Clean Energy Wire)

Investors file resolution demanding BHP exit lobby groups: A shareholder resolution filed by the Australasian Centre for Corporate Responsibility with BHP call on the company to quit its membership of the Minerals Council of Australia and eight other lobbying groups that oppose action to achieve the climate goals of the Paris Agreement. BHP is the world’s largest mining company and operates two large thermal coal mines, one in Colombia and the other in Australia. The resolutions have won support from superannuation and pension funds in Australia, the Netherlands, Denmark and the UK. The resolution will be voted on at the company's annual general meetings in London on October 17 and in Melbourne on November 7. (Guardian)


Botswana: Shumba Energy forms joint venture with PowerChina subsidiary for coal-to-liquids plant.

Colombia: Tribunal rejects Glencore bid for US$575 million in damages but orders Colombian Government to repay US$19 million it fined Glencore’s subsidiary Prodeco over royalties dispute.

Poland: Minister of Energy wants [in Polish] construction work on 500 MW coal-to-gas plant underway by 2020.

South Korea: Police discover over 100 kg of cocaine worth US$250 million hidden in shipment of Colombian coal.

India: Former Secretary of Coal, HC Gupta, acquitted on charges over the allocation of the Brahmapuri coal block in Chhattisgarh.

Pakistan: China Power Hub Generation Company commissions 1320 MW plant in Balochistan province.

Philippines: San Ramon Power shortlists subsidiaries of China Energy Engineering Group and Power Construction Corporation of China for construction of the proposed 105 MW coal plant in Zamboanga City.

“It has long been thought that met-coal [metallurgical coal] is untouchable and would be unaffected by the changes sweeping the energy sector. Hydrogen extends the reach of renewables right into the front yard of met-coal miners,”

said Kobad Bhavnagri from Bloomberg New Energy Finance.

Companies + Markets

Greek Government flags exit from lignite: Greece’s Minister for Energy, Kostis Hatzidakis, has foreshadowed that, as part of a restructuring plan for the Public Power Corporation (PPC), the utility will exit from lignite-fired generation. He said PPC will proceed with the “gradual closing” of the 600 MW Amyntaio plants and the 600 MW Megalopolis plant “in consultation with the local communities.” Hatzidakis said consultation on the closure of the lignite capacity, which has been rendered uneconomic by rising European Union carbon price, must begin in the first half of 2020. The Greek Government had repeatedly attempted to sell the lignite units but, in the last round, attracted no bids that met the government’s minimum standards. (Ekathimerini)

Analyst argues hydrogen fuel could undermine metallurgical coal in steel production: A Bloomberg New Energy Finance (BNEF) analyst estimates that with appropriate carbon pricing hydrogen could be used for between 10 and 50 per cent of steel production by 2050. BNEF estimates hydrogen technology would be competitive with some metallurgical coal-based steel plants when the cost of renewable hydrogen falls below US$2.20 a kilogram and with coking coal prices at US$310 a tonne. Kobad Bhavnagri from BNEF argues the use of hydrogen in steel production requires no major technology changes and that steel from hydrogen could be viable by the 2030s. Global steel production accounts for about nine per cent of global greenhouse gas emissions. (BloombergQuint)

US coal generation slides, dragging mines down with it: The US Energy Information Administration estimates US coal power generation declined by 13.2 per cent in the first half of 2019 compared to the same period in 2018. Solar generation increased by 10.5 per cent over the same period, predominantly from small-scale installations. Wind and gas generation increased by 0.9 per cent and 6.1 per cent respectively, while total electricity generation declined by 2.3 per cent. The financial services company Moody’s recently downgraded the outlook for US coal producers from “stable” to “negative” due to the decline in domestic demand and an expected “substantive” fall in export coal prices, especially in the European market. Platts Analytics estimates US thermal coal exports will fall by 10 million tonnes to 44 million tonnes in 2019, and by a further 8.6 million tonnes in 2020. (Utility Dive, Energy Information Administration, Platts)

Brazil looks to open door for new coal plants: President Jair Bolsonaro’s government has flagged that coal plants will be eligible to compete with gas in an early 2020 tender process to replace diesel generation contracts that expire in 2024. In May, Brazil’s Minister for Energy, Bento Albuquerque, claimed at a wind power forum that coal with carbon capture and new technology can be “clean and sustainable.” Albuquerque also inaugurated the coal caucus in Congress, a group led by MPs from the country’s south where most of the country’s coal deposits and coal power plants are located. (Recharge, Recharge)

Philippines coal power deals rescinded as Meralco opens tenders for new plants: The Philippines Energy Regulatory Commission has approved Manila Electric Corporation’s (Meralco) request for the withdrawal of applications for power purchase agreements with Atimonan One Energy, Redondo Peninsula Energy and Global Luzon Energy Development Corporation. The agreements were all for proposed coal units with planned capacity of 1200 MW, 600 MW and 670 MW respectively. In May 2019 the Supreme Court ruled that all power supply agreements submitted on or after June 30, 2015 had to comply with a competitive selection process aimed at ensuring least-cost power for consumers. Meralco is currently seeking expressions of interest for three agreements, with the terms of two implying they need to be coal plants. (BusinessWorld)

India seeks Russian metallurgical coal: Indian Prime Minister Narendra Modi and Russian President Vladimir Putin are expected to enter into an intergovernmental agreement on the development of a “Far East energy corridor” for metallurgical coal and oil exports to India. It is also planned that companies will enter into project-level memorandums of understanding at the Eastern Economic Forum to be held mid-September in Vladivostok. India’s Minister of Oil and Gas, Dharmendra Pradhan, said he sees a “big prospect of Russia meeting India’s coking coal need” and mentioned that Tata Power has begun to invest in a coal mine in Russia. The Steel Authority of India, National Mineral Development Corporation and Jindal are also investigating potential projects in Russia. In 2018 India imported 51.8 million tonnes of metallurgical coal, with over two-thirds originating from Australia. (Times of India, Times of India)

India opens coal sector to wholly foreign-owned companies: The decision by the Indian Government to open the country’s coal mining sector to companies wholly foreign-owned may pose challenges to Coal India in the long term but analysts think the impact will be limited in the short-to-medium term. With Coal India supplying domestic coal at low prices, the prospects for large-scale foreign companies appear initially limited to substituting new production for imported thermal coal. JM Financial Institutional Securities argues that low margins, a 3–5 year lead time to establish new mines and the need to acquire land suggest the policy change will have little impact in the short term. (Livemint)


Decarbonising the Belt and Road: A Green Finance Roadmap, Vivid Economics, Tsinghua Center for Finance and Development and Climate Works, September 2019. (Pdf)

This 54-page report finds that ensuring China’s Belt and Road Initiative pursues a low carbon development path will be a crucial factor in whether the Paris Agreement goals are met or not.

13 Questions on NTEC’s Bid to Buy Powder River Basin Coal Mines From Bankrupt Cloud Peak, Institute of Energy Economics and Financial Analysis, August 2019. (Pdf)

This 7-page briefing paper poses a series of questions about Navajo Transitional Energy Company’s proposed purchase of three coal mines from the bankrupt Cloud Peak Energy.

Argus White Paper: Indonesia and India lift global thermal coal trade in 2019, Argus Media, September 2019. (Pdf) (Registration required)

This 10-page backgrounder provides an overview of key trends in the global seaborne thermal coal trade.