June 13, 2019
Issue 279  |  View Past Issues

Editor's Note

As public and financial pressure on utilities increases, closures of old coal plants are suddenly being accelerated. In Austria, EVN has announced it will close its Durnrohr coal plant this year, far earlier than the 2025 deadline it had previously flagged. In the US, the retirement of two units at the Colstrip plant in Montana has been brought forward by 30 months. When Norway’s sovereign wealth fund sold US$4.5 billion in coal stocks in 2015, it was huge news. This week new guidelines adopted by the Norwegian Parliament will result in the divestment of another US$5.8 billion from some of the world’s biggest coal-burning private power utilities and mining companies.

Elsewhere, debate over renewables versus coal rages on. A new report argues that the proposed Lamu coal plant in Kenya, which has already seen landowners dispossessed and clean energy advocates harassed, would be a huge economic liability for the country. Another report argues that Vietnam should stop building new coal plants as renewables will be cheaper before they are commissioned and are on track to undermine existing coal plants. In Australia, Adani has suffered a legal setback for a water supply scheme for Adani's proposed Carmichael coal mine. In Russia, residents of the Kuzbass region despairing of action to eliminate coal mining dust pollution are pleading to be allowed to migrate to Canada. In South Africa, a court action has been launched against President Cyril Ramaphosa and his government over pollution from Eskom’s coal plants. In India, a Coal India subsidiary has been directed to cut air pollution from coal mines affecting the city of Dhanbad by 20 per cent in two years.

CoalWire will take a one-week break and return on June 27.

Bob Burton


When coal comes to paradise

Preliminary construction work for a proposed coal plant on Kenya’s Lamu Island, with financial support from Chinese banks and General Electric, is already having adverse impacts on the local community and human rights, writes Dana Ullman in Foreign Policy.


Austria’s last coal plant to close in 2020

EVN, the final Austrian utility to commit to a coal phase-out by 2020, has announced that its 352 megawatt (MW) Durnrohr coal plant will be closed later this year. As recently as early June EVN had stated that the plant may operate until as late as 2025. Austria’s only other operating coal plant, the 246 MW Mellach plant operated by Verbund is scheduled to close in 2020. (DerStandard [German], EVN)

Top News

Legal setback for Adani’s Carmichael coal mine: The Australian Government has conceded it failed to properly assess the impacts of the proposed North Galilee Water Scheme intended to supply up to 12.5 billion litres of water for Adani’s proposed Carmichael coal mine. Responding to legal action by the Australian Conservation Foundation, the government acknowledged that it did not properly consider the over 2000 public submissions on the proposal to construct a 110-kilometre pipeline to access water for Adani’s proposed mine. The project will now be reconsidered by the new Minister for the Environment, Sussan Ley, after a public comment process. (Australian Conservation Foundation)

Indonesian anti-corruption agency completes investigation of utility head: Indonesia’s Corruption Eradication Commission (KPK) has completed its investigation into Sofyan Basir, the suspended President Director of the government-owned utility PLN over his role in the approval of the proposed 600 MW Riau 1 coal plant. His lawyer said the possibility of Sofyan becoming justice collaborator is under consideration. A KPK spokesperson said the case has been handed to prosecutors who he said were preparing an indictment to be submitted to the court. Sofyan was arrested on May 28 after allegedly accepting a bribe from Johannes Budisutrisno Kotjo, a shareholder of the mining company Blackgold Natural Resources, for approval of the Riau 1 plant. Two Golkar Party politicians and Kotjo have already been sentenced to prison terms for their role in the scandal. (Jakarta Post)

Norway votes to tighten coal divestment criteria: The Norwegian Parliament has voted to substantially tighten the coal exclusion criteria of the US$1.1 trillion Government Pension Fund Global (GPFG) which the NGO Urgewald estimates will result in the divestment of €5.1 billion (US$5.8 billion) in stocks and bonds in eight coal mining and/or power companies. The eight companies affected are the Australian coal mining and power generator AGL Energy, global mining companies BHP, Anglo American, South32 and Glencore and European power generators Enel, RWE and Uniper. When in 2015 the GPFG first instituted restrictions on coal investments, €4 billion in stocks were divested. (Guardian, Urgewald)

Bloomberg tips US$500 million into anti-coal and climate campaign: Former New York Mayor Michael Bloomberg has announced US$500 million in funding over three years to dramatically expand US climate campaigns. Part of the funding will be to help ensure all 241 remaining coal power plants are retired by 2030 and to prevent “increased reliance on oil or gas anywhere in our economy.” The funding will also will be directed to support local clean energy initiatives, expand the climate movement and support pro-climate state and local candidates. Since 2010 the Bloomberg-funded Beyond Coal campaign, along with other groups, has resulted in the closure or announced closure of 289 of the country’s 530 coal plants. (New York Times, Bloomberg Philanthropies)

Constitutional challenge launched against South African air pollution: Two South African NGOs, groundWork and Vukani Environmental Justice Movement in Action, have launched legal action against President Cyril Ramaphosa and the South African Government arguing that their failure to take action to curb air pollution from Eskom’s fleet of 12 coal plants breaches residents’ constitutional right to an environment that is not harmful to their health. The Centre for Environmental Rights, which is representing the NGOs, argues Eskom’s pollution of the Highveld Priority Area by power stations — along with emissions from Sasol’s coal-to-chemicals plant and Total’s Natref oil refinery — is having a devastating effect on public health. Monitoring by US air pollution consultant Dr Andrew Gray has found that World Health Organisation air quality standards were being breached at all 120 sites he monitored. Gray estimates that the 305–650 premature deaths caused by the pollution in the region could be reduced by 60 per cent if air quality standards were enforced. (News24, Daily Maverick)

Indian coal state orders pollution reduction at Coal India mines: Jhakhand State Pollution Control Board (JSPCB) has ordered Coal India subsidiary Bharat Coking Coal (BCC) to develop a plan to cut air pollution in the city of Dhanbad by 20 per cent over the next two years. Dhanbad, a city of over a million people, is surrounded by 60 active mines. In 2017 Greenpeace India reported that Dhanbad recorded PM10 fine particle air pollution of 238 micrograms per cubic metre, making it the ninth most polluted city in India. JSPCB said measures BCC should adopt include a ban on transporting coal in uncovered vehicles, the installation of sprinklers in the mines and a tree planting program. (The Telegraph)

Russian residents’ plea to be allowed into Canada as environmental refugees: In a video addressed to Canadian Prime Minister Justin Trudeau dozens of residents from the Russian city of Kiselyovsk have pleaded to be allowed to migrate to Canada to avoid coal dust pollution from nearby mines. The residents argue that the widespread air pollution from coal mining in the Kuzbass is the equivalent of “discrimination on social grounds” which is recognised by Canada as a factor in determining eligibility for refugee status. While Canada’s refugee policy is silent on environmental factors, the residents’ plea has gained international attention. Coal dust pollution is so bad in Komerovo, 180 kilometres to the north of Kiselyovsk, that black snow covered the town in February. (CBC)

Japan’s Cabinet backs unambitious renewables target: In its 2019 review of its climate and energy policies, Prime Minister Shinzo Abe’s Cabinet has endorsed the Energy White Paper 2019 which aims for renewables to gradually increase from 15 per cent of generation currently to 24 per cent by 2030. Faced with opposition from industry lobby groups, the government’s official position is weaker than some major utilities and companies which are looking to expand wind and solar capacity and gradually back away from coal generation. (RenewEconomy, Ministry of Economy, Trade and Industry)


Australia: Anglo American investigates driverless truck fleet for part of Dawson open cut mine.

Australia: AGL reveals that repairs to the 550 MW Unit 2 of the Loy Yang A plant will take at least six months rather than the two to four months originally envisaged.

Australia: Right-wing One Nation Party, which potentially holds the balance of power in the Senate, says it won’t pass the Morrison Government’s tax cut plan unless they support a new coal plant in Australia.

France: Government-owned utility EDF will close the 580 MW Le Havre coal plant in 2021 despite the opposition of unions.

India: Coal India plans to appoint a merchant banker to acquire an interest in an Australian metallurgical coal mine or one with an offtake agreement.

Indonesia: A proposed coal haul road threatens part of the Harapan forest in southern Sumatra.

Ireland: Clean air campaigners argue residents in towns without ban on coal for home heating suffer worse air quality.

Russia: Major coal exporter SUEK has signed a memorandum of understanding with Nippon Export and Investment Insurance to explore business opportunities.

Companies + Markets

Greenpeace urges Eskom coal plants be sold off with closure schedule attached: A study commissioned by Greenpeace Africa has recommended the decommissioning of Eskom’s coal plants that are over 40 years old and the sale of the remaining plants on condition they have binding closure dates and comply with existing air quality standards. The NGO flagged that the issue of whether the sale of the coal plants should be open to private investors or only public companies needs to be discussed further. The report recommends that Eskom retain control of the transmission system and should be allowed to bid for renewable independent power producer projects. They argue the sale of coal assets would allow Eskom to pay down its almost 500 billion rand (US$34 billion) debt, earn income from the transmission infrastructure and play a role in the transition to renewables. (Engineering News, Greenpeace Africa)

Study urges Vietnam to back away from new coal as renewables become cheaper: A new report by Carbon Tracker argues that new coal projects in Vietnam are becoming uneconomic compared to renewables even without the imposition of stricter air pollution standards or a carbon price. The report Here comes the sun (and wind) argues that by 2020 new solar capacity will be cheaper than new coal plants while new onshore wind capacity is expected to be cheaper than coal in 2021. The report argues that Vietnam’s proposed 32,000 MW of new coal capacity risks becoming a stranded asset as coal plants typically require 15–20 years to recover the capital cost. With solar and wind generation costs in Vietnam having declined by 50 and 30 per cent respectively over the last four years the think tank expects that by 2024 and 2028 existing coal plants will be more expensive to run than renewables. Carbon Tracker argues Vietnam should immediately cease supporting new coal plants to avoid having to subsidise generators or alternatively to protect consumers from unnecessarily higher electricity prices. (Carbon Tracker)

Reserve Bank of India unveils revised bad loans directive: Following a successful legal challenge by private power producers against strict default procedures on loans the Reserve Bank of India (RBI) has unveiled its revised directive which allows lenders greater flexibility in restructuring non-performing loans. Under the original February 2018 RBI directive, as soon as a lender defaulted on a loan the banks were required to commence negotiations to restructure the debt. The RBI originally required that all affected banks had to reach agreement within 180 days on a payments plan or begin bankruptcy proceedings. The then RBI Governor, Urjit Patel, refused to buckle to pressure from the government and private power generators to weaken the restrictions aimed at addressing the US$146 billion in bad debts, mostly to the power sector, held by Indian banks. However, in April 2019 the Supreme Court ruled the directive was beyond the powers of the RBI. The revised RBI directive allows banks more than 180 days to restructure loans, only requires the approval of lenders with over 75 per cent of the debt and allows banks flexibility in dealing with power projects stranded for reasons the developers claim were beyond their control. (Times of India, Reuters, Economic Times, Reserve Bank of India)

Move to end US coal tax credit which boosts pollution: Three US Democratic Party Senators have written to the Internal Revenue Service (IRS) seeking evidence that a US$7 per ton (US$6.30 per tonne) coal tax credit actually reduces nitrogen oxides, sulfur dioxide and mercury emissions at plants in line with the original stated goal. The tax credit for chemically treated coal was introduced with bipartisan support by George W. Bush in 2004 and currently costs about US$1 billion a year. The tax credit is up for reauthorization by Congress in 2021. The IRS allows power companies to qualify for the credit based on the results of a one-day lab test rather than actual plant emissions. Resources for the Future estimates that the credit has applied for almost 20 per cent of US coal consumption in recent years. (Reuters, Resources for the Future)

US renewables gain ground as coal fades fast: Two old units at the Colstrip plant in Montana will close in December 2019, 30 months earlier than planned, due to coal costs. Talen Montana had been pressing Westmoreland Coal for cheaper coal after its current contract expires in December but the mining company declined. The two units have a combined capacity of 614 MW. The US Government’s Energy Information Administration (EIA) estimates that coal generation will fall to 24 per cent of energy generation in 2019 and drop to 23 per cent in 2020. In 2018 coal accounted for 27 per cent of electricity generation. The EIA estimates that US coal consumption will decline by about 12 per cent in 2019 and a further six per cent in 2020 to 567 million tonnes. The EIA notes that the 2018 consumption of 687 million tonnes, overwhelmingly in the electric power sector, was a 39-year low. (Associated Press, US Energy Information Administration, US Energy Information Administration)

Study argues Kenyan coal plant would be a liability: A report by the Institute for Energy Economics and Financial Analysis (IEEFA) estimates that electricity from the proposed 981 MW Lamu coal plant in Kenya could cost consumers up to 75 US cents per kilowatt hour, as much as ten times higher than estimated by the coal plant developers. The plant, which has been subject to legal challenges and is still seeking final financial support, is proposed to be commissioned in 2024. IEEFA estimates that under the existing 25-year power purchase agreement Kenya would pay at least US$360 million in annual capacity charges and that the project developers have underestimated the cost of imported coal and overestimated the likely actual generation from the plant. IEEFA argues that renewables growth will render new coal generation unnecessary while there are also significant additional costs in port and transmission infrastructure. Kenya’s Energy Principal Secretary, Joseph Njoroge, conceded electricity growth had slowed and progress of the Lamu project and a LNG plant delayed. (Bloomberg, Institute for Energy Economics and Financial Analysis, Standard)

Polish coal union protest against ousting of JSW CEO: Solidarity, the union which represents coal mine workers, has protested against the sacking of Daniel Ozon, the chief executive of the state-owned metallurgical coal mining company JSW. Ozon said he had rejected lobbying by the Minister for Energy, Krzysztof Tchorzewski, for JSW funds to be invested in the construction of the proposed 1000 MW Ostroleka C coal plant and for the purchase of the Brzeszcze thermal coal mine owned by the financially stressed state-owned coal mining company, Tauron. Tchorzewski also objected to Ozon’s plan to buy a majority stake in the Debiensko metallurgical coal mine and the Jan Karski mine which produces semi-soft coking coal and thermal coal. The mines are owned by the Australian company, Prairie Mining. (Reuters, Argus Media)


The Proposed Lamu Coal Plant: The Wrong Choice for Kenya, Institute for Energy Economics and Financial Analysis, June 2019. (Pdf)

This 26-page report finds the proposed Lamu coal plant is likely to become a massive financial liability for Kenya and its electricity consumers.

Eskom: A roadmap to powering the future, Commissioned by Greenpeace Africa, June 2019. (Pdf)

This 56-page report reviews the options for slashing Eskom’s debt and moving away from coal power and into renewables.