May 3, 2018
Issue 227  |  View Past Issues

Editor's Note

The latest World Health Organization (WHO) data on global air pollution makes for sobering reading. The WHO estimates seven million people die prematurely from outdoor and indoor air pollution and notes coal power plants are one of the significant sources. Data like this has fuelled the public opposition that has made the push for new coal plants, such as in Myanmar, virtually impossible. In countries such as Poland the combination of air pollution and falling renewable power prices has spurred support for offshore wind farms. In China, a similar phenomenon has occurred, with the central government stepping up pressure on provincial governments to ensure grid access for renewable power projects and to cut the wastage of wind generation.

In the US, the economics of coal generation are so bad that Peabody and other groups are suing a power consumer to compel them to buy expensive coal power despite the availability of cheaper alternatives. In the Powder River Basin, which spans Wyoming and Montana, major US coal companies are slashing production forecasts and conceding that in the US, coal generation is in long-term decline.

As is so often the case, there have been more developments in coal industry scandals. In India, a director of a company has been sentenced to four years in jail over a coal allocation. In China, a former high-ranking official has been dumped from the Communist Party over corruption allegations and in Australia the securities regulator has expanded its case over a failed Mozambique coal deal.

Bob Burton


Indonesia’s supercharged power plans come unplugged

President Joko Widodo’s plans to build 35,000 megawatts (MW) of new power capacity by 2019, much of it coal-based, has been undercut by slowing demand, the financial woes of the public utility PLN and the sheer logistics of moving large volumes of coal for new plants, writes John McBeth in Asia Times.

Can the world kick its fossil-fuel addiction fast enough?

While renewable energy deployment is accelerating rapidly even small economic shifts can quickly overwhelm the gains made with clean energy to cut fossil fuel emissions, writes Jeff Tollefson in Nature.

Top News

World Health Organization warns of massive air pollution death toll: The WHO has warned that, based on 2018 data from 4300 cities across 108 countries, an estimated seven million people die prematurely a year from air pollution exposure. Greenpeace notes 15 out of the 20 most polluted cities are in India, while 16 of the most polluted cities in the European Union are in Poland. The WHO notes that coal power plants are one of the “major sources of air pollution from particulate matter.” (World Health Organization, Greenpeace)

Indian coal company director convicted on coal allocation: A special court established to oversee “Coal Scam” cases has found Gondwana Ispat and its director, Ashok Daga, guilty of cheating and criminal conspiracy to have the Majra coal block in Maharashtra allocated to it in 2003. The company, which sought a coal allocation to support a sponge iron plant, falsely claimed to government agencies it had negotiated land acquisition and iron ore supply, and that it was a registered company even before it was formed. After gaining the coal allocation, Daga sold his entire interest in the company. The court sentenced Daga to serve four years in prison, fined him 10 million rupees (US$150,300) and fined the company 6 million rupees (US$90,180). (Economic Times, Business Standard)

US coal export company looks to bypass state regulation: Lighthouse Resources, the parent company of Millennium Bulk Terminals which is seeking approval for coal export terminal in Washington State, has flagged that it is looking at using negotiations over the North America Free Trade Agreement (NAFTA) to bypass the state government approvals process for the project. Millennium aims to export up to 44 million tonnes of thermal coal a year from the proposed terminal. A recent letter to President Trump by senior Republican senators argued a new NAFTA deal should include provisions for “a streamlined, coordinated permitting system” for export infrastructure projects. (

Study argues European carbon prices to climb to meet Paris goals: In a new report, Carbon Tracker argues European Union carbon prices could double from the current €13 (US$16) per tonne by 2021 if the European Commission sets emissions reduction targets in line with the Paris Agreement. The report estimates that the EU carbon price would need to increase to €45–55 (US$66) per tonne by 2030 for generation of the most efficient coal and lignite plants in Germany to be displaced by the most efficient gas plants. (Business Green, Carbon Tracker)

Officials seek to keep Myanmar coal plant proposal alive: Following a statement on March 14 by Myanmar’s Minister of Electricity and Energy, U Win Khaing, that the national government would not approve the proposed 1280 MW Hpa-an plant in Kayin State, government officials have sought to suggest the project may yet be allowed. In an April 9 statement the Toyo Thai construction company told the Stock Exchange of Thailand that it had not yet been informed that the project had been cancelled. However, in January the Ministry of Electricity and Energy issued notices for four LNG plants with the Minister, Win Khaing, stating public opposition to coal plants made it too hard to proceed with them. (Frontier Myanmar)

Rebuff for Rio Tinto over climate activism of lobby groups: A resolution submitted by Australasian Centre for Corporate Responsibility (ACCR) calling on Rio Tinto to evaluate the discrepancy between the company’s support for the Paris Agreement and advocacy of industry lobby groups it belongs to gained the support of 18 per cent of shareholders in the Australian arms of the dual-listed company. (Rio Tinto blocked shareholders on the UK listed part of the company voting on the resolution at their AGM.) The resolution also called on the company to detail payments to industry lobby groups it belonged to. The Chairman of Rio Tinto, Simon Thompson, claimed that a significant amount of time would be required to compile the costs of its memberships because it belongs to “hundreds” of lobby groups. Brynn O’Brien, the Executive Director of ACCCR of the resolution, said the 18 per cent vote for the resolution may be “the highest vote ever … on an environmental, social or governance issue - that has ever been received against a board in Australian corporate history.” (Rio Tinto, Sydney Morning Herald, ACCR)

“I think realistically, most utilities... longer-term, their plan is to close plants,”

said Colin Marshall, the President and CEO of Cloud Peak Energy, a major US coal producer.


Australia: Stock exchange regulator broadens its legal action against Rio Tinto over Mozambique debacle.

Bangladesh: Police file case against cargo owners of coal ship which sank near Sundarbans World Heritage area.

Botswana: Maatla Energy seeks mining licence for new thermal coal mine for Southern African and export markets.

China: Ex-Shenhua executive and former Deputy Director of the National Energy Administration with oversight of the coal industry expelled from Community Party over corruption allegations.

India: Residents near Magdalla port protest against coal dust pollution from uncovered trucks.

Greece: Parliament backs bill to part-privatise Public Power Corporation coal plants, including rights to new unit in Florina.

Pakistan: In anti-corruption case, outraged Supreme Court judges demand Sindh Coal Authority submits details of spending on projects.

Russia: SUEK, the country’s largest coal miner and exporter, has joined the World Coal Association.

US: Health problems abound for residents near AES Corporation’s coal plant in Puerto Rico.

Zimbabwe: Hwange mine output has fallen by 38 per cent as lack of foreign exchange cripples maintenance.

“The pressure on the investment industry to reduce the amount of capital that we make available to the coal industry is increasing ... That will lead to this industry facing a rising cost of capital,”

said Nick Stansbury, a fund manager at Legal & General Group, the U.K.’s largest manager of pension assets.

“The pressure on the investment industry to reduce the amount of capital that we make available to the coal industry is increasing ... That will lead to this industry facing a rising cost of capital" Nick Stansbury, Legal & General UK.

Companies + Markets

China wind generation climbs rapidly as curtailment falls: China’s National Energy Administration (NEA) has directed provincial governments to improve access to the transmission grid for renewable energy generators. The NEA has also directed provincial governments to slash the curtailment rate where wind power is not supplied to the grid. In the first three months of 2018 the curtailment rate of China’s 168,000 MW wind capacity fell by 8 per cent to 8.5 per cent compared to the January to March period in 2017. Reduced curtailment will have a reduce coal generation. (Reuters, China Energy Portal)

Poland shifts towards offshore wind: Poland’s dependence on imported Russian thermal coal for about 20 per cent of power generation has boosted government support for the development of offshore wind farms using the infrastructure of ailing shipyards. Following the 2015 election of the nationalist Law and Justice party effectively blocked new onshore wind farms with restrictive planning limits. However, rapid falls in the cost of offshore wind farms, rising carbon prices and increasing pressure to meet European Union renewable energy targets has led to a proposal for 8000 MW of offshore wind farms in the Baltic Sea. (Bloomberg)

Eskom faces coal price hike to rescue stressed company: The administrators of the Gupta family company, which owns the Optimum coal mine, have reportedly proposed halving the 400,000 tonnes a month supplied to Eskom for the 2000 MW Hendrina plant and increasing the cost from the current 200 rand (US$16) per tonne to 450 rand (US$37) per tonne. Eskom has rejected the claim it has agreed to the new price but confirmed lower volumes have been canvassed. The current 40-year coal supply agreement expires at the end of 2018. The Optimum mine is the sole supplier to the Hendrina plant, which was one of seven power stations Eskom confirmed was running short of fuel. (Fin24, EWN)

US Powder Basin coal producers feeling squeezed: The President and CEO of Cloud Peak Energy, Colin Marshall, told investors that it was “obviously very close” to where it was not worth selling additional volumes of thermal coal. Cloud Peak Energy, which was spun off from Rio Tinto in 2009, has faced increased costs, flat prices, declining demand and increasing competition from other fuels. Arch Coal, another major Powder River Bain producer, has flagged it expects its Black Thunder mine in Wyoming to produce somewhere between 62 million and 68 million tons (56–62 million tonnes) of coal in 2018, down by between 11 and 15 per cent on the company’s previous statements. The Black Thunder mine, one of the world’s largest, produced 101 million tons (92 million tonnes) in 2014. (S&P Global, S & P Global)

Indian banks called to discuss 75,000 MW of stressed plants: The State Bank of India (SBI) has called a meeting of power plant lenders to discuss a possible framework on how to handle 34 thermal power projects struggling with 1.7 trillion rupees (US$26.6 billion) in debt. The projects — which include existing and part-built plants — have a combined capacity of 75,000 MW. The SBI has reportedly proposed lenders write-off half their loans to the stressed projects rather than have them forced into liquidation. SBI has proposed the projects would then be offered to the National Investment Fund to facilitate bids from private companies. Alternatively, if no private bids were submitted it would allocate the plants to the publicly owned utility NTPC or to private generators to operate on a contract basis. (Economic Times)

Peabody struggles to keep US customer afloat: Peabody Energy has hired the investment banking firm Lazard Freres to help find potential buyers for the 2250 MW Navajo Generating Station (NGS) in Arizona which is schedule to close at the end of 2019. Lazard has advised Peabody the plant’s continued operation is contingent on a long-term power purchase agreement with the Central Arizona Project (CAP), which sources 90 per cent of its power supply for pumping water from the plant. However, the CAP is seeking cheaper power supply. Peabody Energy, the Hopi Tribe and the United Mineworkers of America have launched a federal court action seeking to compel the CAP to buy its power from the NGS. The plant is the sole customer for Peabody Energy’s Kayenta mine. However, the Institute for Energy Economics and Financial Analysis (IEEFA) argues increased operating costs and cheaper power alternatives will make the continued operation of the plant unviable. (US News & World Report, Hopi Tribe, IEEFA)


Global ambient air pollution, World Health Organization (WHO), May 2018. (Media release here.)

The WHO’s updated global database of air pollution monitoring results from 4300 cities in 108 countries reveals 9 out of 10 people breathe air containing high levels of pollutants with coal plants one of the significant contributors.

Accidents Waiting to Happen: Coal Ash Ponds Put Our Waterways at Risk, Environment America Research & Policy Center and US PIRG Education Fund, April 2018. (Pdf)

This 21-page report details the risk from coal ash dams at 14 coal plants located within US Federal Emergency Management Agency 100-year flood zones.

Creating up to 5,000 jobs in Central Queensland by eliminating the coal mine rehabilitation deficit, Lock the Gate, April 2018. (Pdf)

This 6-page submission argues the 10 largest coal mines In Queensland currently have 51,000 hectares of rehabilitated land which would create 4,250 jobs if rehabilitation is required to be undertaken over the next five years.