September 17, 2020
Issue 339  |  View Past Issues

Editor's Note

The recent bid by the Swedish utility Vattenfall to close a five-year-old plant in Germany took many by surprise. This week, the Czech-owned company EPH has revealed it plans to shut a plant in France it bought just last year from the German utility Uniper as it dumped some of its old coal assets. Greece, which until a year or two ago was seen as unlikely to close its old lignite plants, has unveiled plans to spend US$5 billion to smooth a transition for its coal communities and support new industries.

If the latest energy scenarios of BP come to pass, more governments will be forced to roll out transition strategies. All BP’s scenarios see a major decline in coal generation by 2050, with two pegging it at between 85 and 90 per cent. In the US, four major coal companies have reduced the value of their combined coal assets by US$1.8 billion in just the last quarter. The slump of the coal price in the export market is hitting Indonesian coal exporters hard as they sell coal at below their breakeven price. In Australia, Brookfield is looking to offload the Dalrymple Bay Coal Terminal, an ominous indicator that the smart money is not all that comfortable with the long-term outlook for a coal port even if it mostly dispatches metallurgical coal.

The fallout from coal companies behaving badly continues in the US and South Africa. In South Africa a former chairperson of Eskom has told a commission of inquiry into state capture of the close connections between the Gupta family and the government-owned utility. In the US, a legal action against a former staffer of a consultancy has revealed the US Securities and Exchange Commission is investigating First Energy Corporation over the Ohio bailout scandal.

Bob Burton


Why would anyone finance another coal power plant in China?

Why would state-owned Chinese companies, which risk financial losses from overcapacity, actively promote a wave of new coal power plants in China, asks Max Dupuy from the Regulatory Assistance Project in Carbon Brief.

Why is Samsung still in coal when everyone else is moving towards clean energy?

While major tech companies such as Apple and Google have increased their climate commitments in 2020, Samsung remains heavily involved in the construction and financing of coal power projects across Asia, writes Yu Sun Chin from the South Korean NGO Solutions for Our Climate in CleanTechnica.

Top News

French coal plant to close a year earlier than planned as market turns down: EPH, a company owned by Czech billionaire Daniel Kretinsky, will close its 600 megawatt (MW) Provence coal plant in France two years earlier than planned. In July 2019, EPH bought the Provence plant from the German utility Uniper, along with the 1473 MW Emile-Huchet plant which has a 647 MW coal unit and two gas units. Europe Beyond Coal said the early closure of the plant was an indication of the structural decline in European coal power and that the utility had been “burned” by its cut-price purchase of Uniper’s unwanted assets. (Europe Beyond Coal)

Villagers launch legal action against German coal exit law: Thirty-six villagers have launched a legal challenge against the German Government’s coal exit legislation which allows the expansion of the Garzweiler lignite mine and the demolition of five adjoining villages. The legal case filed in the Federal Constitutional Court argues the proposed expansion of the mine would breach the constitutional rights of the residents to property and specifically challenges the clause in the legislation that states the mine is “necessary for reasons of energy policy and economics.” They argue the expansion of the mine is not necessary for Germany’s energy supply and is not in line with Germany’s obligations under the Paris Agreement. (France24, ClientEarth)

Protests against railway line upgrade for Adani’s Godda plant: Protests have erupted against the proposed construction of an additional rail track to carry coal from the port town of Dhamra in Odisha to Adani’s proposed 1600 MW Godda coal plant in Jharkhand.  An estimated 700 indigenous Adivasi families face displacement as a result of the project but South Eastern Railways have not negotiated compensation with those affected who argue that a previous court decision ruled that displaced families are entitled to receive 7 acres of land and a job with Indian Railways. Adani plans to import coal from its proposed Carmichael coal project in Australia for use at the Godda plant which will export power to Bangladesh. The Godda project has been criticised both for its environmental impacts and the excessively high cost of power. (NewsClick)

Residents push to cancel Odisha coal plant: A delegation from a local branch of the ruling Biju Janata Dal party in Odisha has called on government officials to cancel NLC India’s proposed 2400 MW Jharsuguda coal plant and associated coal ash dam. In 2019 opposition to the project grew after NLC applied to compulsorily acquire land, forcing government officials to cancel a public hearing on the proposal. Pollution of farmland and waterways by coal ash has become a more prominent issue in the last year after a series of coal ash dam collapses. (The Pioneer)

Japanese company reneged on agreement to backfill Australian mine voids: Idemitsu Australia, a coal mining subsidiary of the Japanese energy company Idemitsu, has won approval from the Queensland Government to leave coal pits on the Nogoa River floodplain in Queensland unfilled. In 2018, legislation passed by the Queensland Government banned companies from leaving mine voids on floodplains unfilled but set a November 1, 2019 start date for the new standard. Before the deadline, Idemitsu Australia gained approval for a revised Environmental Authority which will allow it to leave five unfilled pits, three of them on the floodplain. The NGO group Lock the Gate estimates the change will allow Idemitsu Australia to avoid spending hundreds of millions on the proper rehabilitation of the Ensham coal mine. (ABC News, Lock the Gate)

US regulator launches investigation of First Energy over Ohio scandal: The US Securities and Exchange Commission has launched an investigation into First Energy Corporation after a former staff member of a consulting firm provided inside information to the regulator. The existence of the investigation only came to light after a former staff member for Clearsulting was sued by First Energy and the consultancy for downloading 57 documents relating to the utility after he was fired. The employee was fired on the day former Ohio House of Representatives Speaker Larry Householder and four associates were arrested and charged over a US$60 million campaign to elect Ohio legislators and push through the HB6 bill. The bill provided a bailout to two nuclear plants and US$450 million for two coal plants. At a hearing on the possible repeal of Ohio’s HB6 bill at the centre of the scandal, State Republican Representative Laura Lanese rejected the argument of some members who claimed “the process not the policy was corrupt”.  “Even if true, the legislation is so intimately tied to the process that it would take the precision of splitting atoms to separate the two,” she said. (, WOSU Public Media)

Former Eskom chair reveals Guptas had transcripts of the utility’s board meetings: Former Chairperson of Eskom, Zola Tsotsi, has told the Zondo Commission into State Capture that he was “taken aback” at the utility’s role in funding Tegeta Exploration & Resources’ purchase of the Optimum coal mine from Glencore. Tegeta was a company owned by the Gupta family. Duduzane Zuma, the son of then President Jacob Zuma, was also a minor shareholder. Tsotsi told the commission he had the impression that there was a level of “orchestration” to “replace the top layer of Eskom people with some people who are associated with the Guptas.” He also told the commission that at a meeting with Tony Gupta the businessman had shown him transcripts of Eskom board meetings. (Daily Maverick)


Australia: Adani wins injunction blocking Galilee Blockade activist seeking information on Carmichael mine contractors.

Australia: Subsidiary of Sanjeev Gupta’s GFG Alliance fined A$15,000 (US$11,000) over pollution from its Tahmoor metallurgical coal mine.

Colombia: Coal exports halved in the second quarter of 2020 as COVID-19 drives demand collapse.

Europe: NGOs urge European Union to step up enforcement actions against Chinese coal projects breaching EU guidelines.

Poland: Coal unions want Prime Minister involved in negotiations as government-owned PGG seeks agreement on coal mine closures.

Russia: A new 12 million tonnes per year coal terminal at Vanino in the Far East has been commissioned.

South Africa: North-Gauteng High Court rules affected communities have a right to see applications for mining licences.

Ukraine: Energy Minister says Ukraine is open to participating in the Powering Past Coal Alliance.

US: Peabody Energy has terminated the employment of its Chief Operating Officer, Charles Meintjes.

“Coal consumption declines consistently over the next 30 years in all three scenarios, never recovering back to its peak level of 2013.... [in two models] coal is almost entirely eliminated from the global energy system over the next 30 years falling between 85–90 per cent,”

states the global oil and gas company BP in its Energy Outlook 2020.

Companies + Markets

US coal companies report big write-downs in second quarter: Four US coal companies — Peabody Energy, Contura Energy, Natural Resource Partners and Coronado Global Resources — have reported combined write-downs of coal assets of US$1.8 billion in the second quarter of 2020. Peabody Energy’s write-down was US$1.42 billion. Analysts said there can be a time lag between low prices and changes in asset value but the latest write-downs reflect the likelihood that coal values are not likely to go back up. The lead coal analyst at Moody's Investors Service, Benjamin Nelson, said “there's a little bit of a zombie element to the market right now because you have producers that have contracts from better times, or they have inventories and a need for cash, so they're doing some stuff from a sales perspective that's not sustainable to raise cash.” (S & P Global)

Queensland coal terminal up for sale: Brookfield Asset Management has revived its plan to sell the 85 million tonne a year Dalrymple Bay Coal Terminal in Queensland even as exports of metallurgical and thermal coal shipped through the port have fallen for the second month in a row. About 20 per cent of the world’s seaborne metallurgical coal is exported through the terminal. Brookfield, which obtained a 99-year lease on the terminal in 2009, is aiming to float a company on the Australian Stock Exchange after attempts to sell the terminal to institutional investors have stalled. However, the Queensland Treasurer has proposed putting A$500 million (US$365 million) into a Queensland Business Investment Fund which could buy a stake in the port. (Michael West News, Argus Media, Australian Financial Review [Paywall])

Adani sets up new rail company for Carmichael mine project: In August 2020 the Bowen Rail Company (BRC) was established to haul coal to the Abbot Point export terminal but the announcement did not mention the company is ultimately owned by the Adani group in India. Documents filed with the Australian Securities Investment Commission reveal the directors of BRC are all senior executives with Adani in Australia. Adani’s move to establish BRC, which may increase costs on the project by up to A$200 million (US$146 million), follows contractors ruling out work on the controversial Carmichael coal project. Market Forces campaigner Pablo Brait said BRC’s ownership meant any bank financially supporting the Indian parent company could end up indirectly supporting the Carmichael project even if was against their stated policy. (ABC News, Market Forces)

Greece announces US$5 billion funding for coal transition plan: Greece’s Minister for Energy, Kostis Hatzidakis, said the government will spend 5 billion euros (US$5.9 billion) by 2028 to diversify the economies of coal producing regions affected by the closure of coal plants in western Macedonia and Megalopoli. Hatzidakis said financial support would be provided for infrastructure projects, renewable energy plants, tourism and agricultural development, as well as subsidies for new businesses and training support. The draft plan is open for public consultation until October 31. Funding will come from the government, the European Union and European Investment Bank. The government-owned Public Power Corporation plans to close 80 per cent of its coal capacity by 2023. It is proposed that a 660 MW lignite unit at the Ptolemaida plant, which is currently under construction, will operate on coal until 2028 and then switch fuel. (Reuters)

COVID-19 fuels Indonesian coal company crisis: A Institute for Energy Economics and Financial Analysis report estimates only one of Indonesia’s 11 stock exchange listed companies is at breakeven or better at the current export benchmark price for coal of US$47 per tonne. Bumi Resources, ABM Investama and Geo Energy Resources need export prices of US$63, US$61 and US$60 per tonne to break even due to their high debt levels. The report estimates leading Indonesian coal mining companies have outstanding bank loans of US$3.8 billion which will become unserviceable if low prices persist. (Institute for Energy Economics and Financial Analysis)

Tata Power CEO endorses need to close old Indian plants: Speaking at the launch webinar for a report by Climate Trends, the CEO of Tata Power, Praveer Sinha, said coal plants in India that are between 25 and 30 years old and in breach of new pollution standards “need to close down”. This would avoid the costs of installing flue gas desulphurisation and other pollution control equipment.  This would apply to between 270 and 280 plants with an installed capacity of about 35,000 MW and a further 25,000 MW of plants over 15 years old which had already repaid their loans. However, while the report argues for the cancellation of part-built plants, Sinha proposed part of the 60,000 MW of reduced coal capacity could be allocated to allow 10–20,000 MW of stranded new coal plants to operate, with the balance “taken up by renewables”. (Economic Times)

Ratings agency warns of currency risk on debt carried by Vietnam’s power utility: In a review of the government-owned Vietnam Electricity's (EVN) the credit ratings agency estimates the COVID-19 crisis has cut electricity demand growth from an average of 10 per cent a year over the last four years to just two per cent in 2020. Strict government lockdown measures in March and again in August have limited the spread of COVID-19 cases to just over 1000 among the country’s population of 95 million people. However, Fitch Ratings warns it expected EVN’s finances to be “much stronger” and argues it needs to increase power tariffs to offset the risk that its finances could “deteriorate more rapidly than its peers given its reliance on volatile hydro power and high exposure to foreign-currency denominated debt.”  (Fitch Ratings)


No Bailout, Don’t Throw Good Money after Bad, Institute for Energy Economics and Financial Analysis, September 2020. (Pdf)

This 21-page report, the third in a series on the Indonesian coal sector, argues that despite the financial crisis affecting coal mining companies there is no justification for a government bailout of debt-laden companies.