August 2, 2018
Issue 239  |  View Past Issues

Editor's Note

The latest global data on coal power reveals that the shift away from coal projects continues to accelerate but not at a pace fast enough to meet the Paris Agreement goal to limit global warming to well below a 2 degree increase. In Japan, TEPCO — the utility of Fukushima infamy — has announced it plans to rapidly increase its renewables capacity at home and abroad. In India, two big coal plants are teetering on the edge of being cancelled. In Vietnam, the Prime Minister is promoting a new gas plant as an alternative to a coal plant in the Mekong Delta. In South Korea, the government has proposed a significant increase in duty on imported thermal coal and cutting the tax on LNG to drive a fuel switch. These changes are all consistent with the high-level trends Bloomberg New Energy Finance sees driving the rapid shift away from fossil fuel generation.

For those still pursuing coal projects, a financial day of reckoning is looming. In South Africa, Eskom’s proposed completion of two huge coal plants will pile more debt on the floundering utility. In Pakistan, the new Prime Minister has backed the completion of new coal projects but a growing financial crisis and soaring coal import costs are likely to force reappraisal of many projects.

Coal scandals continue to unfold. In Indonesia, the head of state-owned utility PLN failed to respond to a summons from the government’s anti-corruption agency to submit to questioning as a witness in an alleged coal plant bribery scandal. In South Africa, the Treasury has completed its investigation into Eskom’s extraordinary support for the coal mining plans of a Gupta-owned company. In Japan, former Mitsubishi executives face charges over allegedly bribing a port official in Thailand over a gas plant. Mitsubishi is a major coal plant promoter as well.

Bob Burton


‘Peak coal’ is getting closer, latest figures show

Total global coal power plant capacity continues to inch up, but a peak is on the horizon. In the first half of 2018, retired capacity has nearly matched newly operating plants and the global pipeline for proposed coal is quickly diminishing, writes Christine Shearer from CoalSwarm in CarbonBrief.

Power system will dance to tune of wind, solar, batteries

By 2050 coal power is projected to lose the market for bulk electricity to cheaper renewables and the market for round-the-clock availability to more flexible gas, which better complements variable wind and solar, writes Seb Henbest from Bloomberg New Energy Finance.

Is Japan finally turning away from coal?

Japan seems to be slowly awakening to the risks that come with the country’s short-sighted dependence on coal, writes Marie Tanao from Japan in The Diplomat.

Top News

Vietnam’s Prime Minister pushes LNG as alternative to Mekong Delta coal plant: Vietnam’s Prime Minister, Nguyen Xuan Phuc, is promoting a 3200 megawatt (MW) LNG-fired plant in Bac Lieu Province in the Mekong Delta as an alternative to a proposed coal plant. In May a US company, Energy Capital Vietnam, signed a memorandum of understanding (MOU) for the project. The Prime Minister’s statement and the MOU suggest the long-delayed 1200 MW Than Bac Lieu coal plant has finally been cancelled. In September 2016, Bac Lieu Province leaders urged the Prime Minister to drop the coal project due to concern over likely impacts on public health and fisheries in the Mekong Delta. (VNExpress, CoalSwarm)

Mitsubishi reaches deal over Thai corruption allegations: Japanese prosecutors have charged three former Mitsubishi Hitachi Power Systems (MHPS) executives with allegedly paying US$329,000 in February 2015 to a Thai port official for the unauthorised use of a dock to unload construction equipment for a major gas power plant. MHPS entered into an agreement with Japanese prosecutors and has not been charged. An internal investigation launched by the Electricity Generating Authority of Thailand is due to report soon on whether the MHPS bribery case involved officials from the Thailand’s Ministry of Energy. MHPS is facing fierce competition from Siemens and General Electric in the declining thermal power plant market. Mitsubishi is a major components supplier for coal plants and in recent years has lobbied for projects in Myanmar and Thailand. (Nikkei Asian Review, Bangkok Post, Mitsubishi Hitachi Power Systems)

Head of Indonesian power utility fails to attend questioning over coal plant scandal: Sofyan Basir, the President director of Indonesia’s state-owned utility Perusahaan Listrik Negara (PLN) has rejected a summons by the Corruption Eradication Commission (KPK) to attend a July 31 meeting for questioning as a witness over the alleged bribing of a high-placed MP over the proposed 600 megawatt (MW) Riau I plant. A spokesperson for the KPK said that one of Sofyan’s staff delivered a letter which “stated he could not come because he has work to do.” On July 13 the KPK arrested 13 people over the project and searched Sofyan’s home two days later and seized documents. The Riau I project is one of the coal plants under consideration for allocation by PLN as part of its procurement plan without a public tender. Indonesian civil society groups are calling for all of PLN’s direct allocation projects to be suspended. (Jakarta Post)

Adani submits low-cost plan for Australian coal port expansion: Adani has submitted a plan to expand the capacity of the existing Abbot Point Coal Terminal by 10 million tonnes a year as an alternative to building a new terminal to cater for the proposed Carmichael mine. However, the proposed construction of a new a conveyor and transfer tower at the existing terminal may trigger an application for a stop work order by Juru Enterprises, which is the authorised representative body for the traditional Aboriginal landowners. Juru Enterprises is challenging Adani’s reliance on a cultural heritage assessment undertaken by another Aboriginal group which the Federal Court of Australia ruled was not the appropriate representative body. (Guardian)

Court rebuff for Adani’s defamation suit against Indian media outlet: A Gujarat court has set aside an order sought by Adani Power summonsing the online news website The Wire and the authors of an article investigating regulatory changes to taxes on imported equipment and supplies for projects in special economic zones. Adani Power imports coal for the 4620 MW Mundra plant in Gujarat and is one of the beneficiaries of the amended tax policy. The court said Adani’s complaint lacked clear argument and referred it back to the original magistrate for reconsideration. However, five other cases brought against The Wire by Adani Power — two criminal defamation cases and three civil defamation cases — are ongoing. (The Wire, The Wire)

Indian court challenges backdown on coal plant pollution: India’s Supreme Court has challenged the Ministry of Power’s failure to require power plants to meet the December 2017 deadline for the installation of flue gas delsulphurisation (FGD) on coal power plants as specified in pollution control standards adopted in 2015. The court also found little evidence the ministry would ensure coal power plants would meet the revised 2022 deadline. “How can you violate your own norms?” asked Justice Lokur. The court directed the ministry to submit a revised statement detailing the number of plants over 500 MW and steps for plants to tender for the installation of FGD units. A further hearing on the case is scheduled for August 2. (Economic Times)

South African investigation of Eskom corruption nears completion: South Africa’s National Treasury has concluded its investigation into an August 2015 decision by Eskom executives to award a coal supply contract to the Gupta family-owned Tegeta Exploration and Resources. The report has been provided to those named who have been given two weeks to respond. The report will be made public after it is finalised. Central to the investigation was Eskom’s decision to pre-pay Tegeta for future coal supply which enabled the company to buy the Optimum coal mine from Glencore. A separate South African Government inquiry into ‘state capture’ is set to begin in August. (Reuters, Mail & Guardian, National Treasury)

“When the Italian authorities began a nationwide judicial investigation into corruption in the 1990s, it was known as Manu Pulite or “Clean Hands”. If Indonesia is to have Clean Hands, it must be free of the dirty fuel which is dragging down the country, corrupting our politics and our businesses, and poisoning our air,”

writes [paywalled] Tata Mustasya from Greenpeace Southeast Asia in the Jakarta Post.


Australia: NSW Government approves South32’s coal mine expansion in Sydney water catchment.

Brazil: Government agency reveals plan to auction off coal exploration rights in Rio Grande do Su state in December.

Indonesia: Coal barge carrying 7000 tonnes of coal for Lafarge cement plant sinks at dock in Aceh province.

Mozambique: Delay in negotiations over proposed 300 MW coal plant causes share price of UK-listed developer to plummet.

Myanmar: Police arrest protesters against pollution from coal-fired cement plant in Dahattaw village in Mandalay region.

South Africa: Coal-to-oil producer Sasol has refused to consider a shareholder resolution seeking assessment of the company on compliance with the Paris Agreement goals.

US: State Department refuses to intervene in controversy over Canada withholding data on selenium-polluted rivers flowing into Montana.

Companies + Markets

Two Indian plants teeter on brink of cancellation: Two proposed coal plants with a combined capacity of 3780 MW may be cancelled if the states of Bihar and West Bengal indicate to NTPC that power from the projects is no longer required. Power purchase agreements for the 1980 MW Nabinagar-2 and the 1600 MW Katwa plants were signed in 2010. However, the state of Odisha, which originally had a power offtake agreement for the projects, recently requested permission to end its support for the plants due to the projected high fixed costs and the current power surplus in the state. (Financial Express)

South Korea proposes increased tax on thermal coal imports: The South Korean Government has proposed to increase the tax on thermal coal imports by 10,000 won (US$8.90) per tonne from April 1, 2019. The government is also proposing to reduce the tax on LNG imports by 75 per cent to 23 won (US$21) per tonne. In 2017 it was estimated that South Korea imported an estimated 116 million tonnes of thermal coal; the major suppliers were Australia, Indonesia, Colombia and Russia. The proposed tax increase is the latest measure by the government to reduce pollution from coal power plants. On July 1 it instituted a ban on thermal coal with over 0.4 per cent sulphur content and in mid-2017 restricted the most polluting plants from operating during the summertime pollution peak. (Reuters)

Japan’s largest power utility signals renewables switch: In a major switch in business strategy TEPCO’s President, Tomoaki Kobayakawa, has flagged that it plans to invest in 6000–7000 MW of renewables capacity in both Japan and abroad. TEPCO, the operator of the Fukushima nuclear plant, has far less renewables capacity than its rivals and has lost hundreds of thousands of retail customers in the wake of the Fukushima nuclear disaster. In Japan TEPCO is most likely to pursue the development of offshore wind capacity. (RenewEconomy)

New Pakistan PM backs lignite plants but financial crisis looms: The election of Imran Khan as Pakistan’s new Prime Minister may initially have little impact on the country’s plan for a 9500 MW expansion in Chinese-funded coal plant capacity, with the new leader backing new lignite plants in the Thar coalfields. Under the China–Pakistan Economic Corridor, $35 billion has been earmarked for energy projects, some in the Thar coalfields and others based on imported coal. However, Pakistan’s dwindling foreign exchange reserves may soon force the country to seek a bailout from the International Monetary Fund which may require increases in electricity tariffs, the renegotiation of the terms of some of the projects and the cancellation of others. Pakistan has a total of just over 6000 MW of coal plants under construction and a further 8990 MW of proposed plants. (Financial Times)

India pursues resolution of bad power sector loans: The Government of India will appoint a high-level committee comprising senior officials from the Ministry of Railways, Ministry of Finance, Ministry of Power, Ministry of Coal who, along with power sector lenders, will propose measures to avoid financially stressed power projects being forced into bankruptcy. In February this year the Reserve Bank of India directed banks to resolve bad loans or place the stressed projects into bankruptcy. With the August 26 deadline looming several banks are proposing to accept major reductions in the value of loans in return for one-off payments from stressed power project developers. (Livemint, Bloomberg Quint, Ministry of Power)

Chinese companies pursue plan for metallurgical complex in South Africa: Chinese state-owned companies and the South African Government have signed a MOU for the development of a proposed US$10 billion metallurgical complex, including a coal power station, in the Musina-Makhado Special Economic Zone in Limpopo province. While few details of the MOU are public, the proposed project includes stainless steel, ferrochrome and silicomanganese plants and would require a new coal power station, a coking plant and a coal washery. (Reuters)

Chinese banks courted over proposed Mozambique coal railway: A consortium proposing to build a 639 kilometre coal railway from Moatize and Chitima in Tete province to a new floating terminal off the coast at Macuse is seeking project funding from Chinese banks. Thai Mozambique Logistica (TML), a subsidiary of the controversial Thai company Italian-Thai Development, is touting the prospect of construction of the long-delayed project commencing in 2019 and due for completion in 2022. While Vale and other companies export metallurgical coal from Moatize via the Sena and Nacala railway lines, thermal coal exports were not viable due to the low prevailing global coal price. Vale has raised funds to upgrade the existing Nacala corridor from 13 million tonnes per annum (Mtpa) capacity to 18 Mtpa. (, CoalSwarm, MiningWeekly)

Eskom debt soars as blackout risk increases despite generation glut: Eskom’s new CEO, Phakamani Hadebe, has flagged that the utility’s debt will balloon over the next four years from the current 398 billion rand (US$32 billion) to 600 billion rand (US$46 billion) if all projects in the approved corporate plan are completed. Hadebe is currently proposing to defer some transmission network projects but to allow the completion of the 4680 MW Kusile and Medupi coal plants, which will each cost an additional 36 billion rand (US$2.7 billion). (Moneyweb)


Marubeni’s Coal Problem A Japanese Multinational’s Power Business Is at Risk, Institute for Energy Economics and Financial Analysis, July 2018. (Pdf)

This 47-page report finds that Marubeni, a major Japanese company, is facing growing reputational and financial risks due to the reliance on coal of its global power business.

Phasing in Renewables: Towards a prosperous and sustainable energy future in Kosovo: challenges and possible solutions, Germanwatch, together with Balkan Green Foundation, July 2018.

This 60-page report features contributions from a range of experts on how renewables can be phased in in Kosovo as an alternative to reliance on a new lignite plant.

Making Concrete Change: Innovation in Low-carbon Cement and Concrete, Chatham House, July 2018. (Pdf)

This 138-page report reviews options to make the rapidly growing cement sector compliant with Paris Agreement goals. About eight per cent of greenhouse gas emissions are from cement production which consumes about 330 million tonnes or four per cent of annual global coal production.