May 2, 2019
Issue 273  |  View Past Issues

Editor's Note

Over the last two weeks there has been a spate of significant announcements. The giant European utility RWE has scrapped a long controversial 1100 megawatt (MW) plant at Niederaussem, which had been touted internationally as a poster child for new coal plants. In Japan, Osaka Gas has decided to bail out of a consortium proposing a 1200 MW plant, leaving the joint venture in disarray. Another utility, JERA, is shifting its investment emphasis to heavily focus on renewables. In the US, a federal court judge has overturned a Trump administration decision to reopen federal lands for new coal leases. An opinion poll puts some hard data to the long-held suspicion that most people in the key countries targeted for new coal plants far prefer renewables. Perhaps reflecting this shift, the Talanx Group and Hannover Re have ruled out support for most new coal plants, albeit with a significant loophole. The Singapore-based bank DBS has ruled out financing any new coal plants beyond a handful they are already involved with.

Despite these gains, significant shifts in Chinese policy to end support for new coal plants at home or abroad remain elusive. While some analysts doubt that recently announced easing of restrictions on new coal plants in some provinces will make much difference given the poor economics, China continues to be a big promoter of coal projects abroad. At the recent Belt and Road Forum a raft of new deals were announced in countries such as Turkey, Vietnam, Pakistan and Mongolia. One little-known feature of these overseas deals is the risk being taken on by China’s government-owned export credit insurer, Sinosure.

Bob Burton


China’s export insurance giant is taking a risk on coal

Sinosure, China’s state-owned export credit insurer, is increasingly exposed to growing climate and overcapacity risks by its continued support for new coal power plants in the Belt and Road Initiative, writes Danqing Li in Medium.

Time for China to stop bankrolling coal

China has recently loosened restrictions on new coal plants in 11 provinces and keeps backing projects abroad through its Belt and Road Initiative despite a cleaner pathway being available, writes Aiqun Yu and Christine Shearer from Global Energy Monitor in The Diplomat.

Asia continues to pivot away from coal

The rapidly falling number of proposed new coal plants in major Asian countries should be a warning to the world’s biggest exporters of thermal coal in Australia and Indonesia to scrap major mine expansions, writes Tim Buckley in Asia Times.

Does Japan’s new climate strategy go far enough?

A new climate strategy presented to Japan’s Prime Minister Shizo Abe in early April fails to address calls to end support for proposed new coal plants at home or abroad writes Daniel Hurst in The Diplomat.


German utility cancels 1100 MW lignite plant proposal

RWE has announced it has cancelled plans for the proposed 1100 MW BOAplus project in Niederaussem in the wake of the German coal exit commission’s recommendation to phase out all coal plants by 2038.The plant, which was first proposed in 2012 to replace existing units at the site, has faced strong community opposition and legal challenges. In November 2018, the Munster Higher Administrative Court ruled in favour of local residents who submitted that the construction of the power plant violated the state development plan and the climate protection law of North Rhine-Westphalia. (Reuters, PV Magazine, RWE)

Top News

Japanese utility rules out involvement in new coal plant: Osaka Gas has announced that it will not continue to be involved in the joint venture proposing to build a new 1200 MW coal plant in Ube in western Japan. Osaka Gas, which has a 45 per cent stake in the joint venture, stated that it was ending its involvement in the project “in light of the changing business environment of the electric power industry and future risks.” J-Power and Ube Industries, which respectively have 45 per cent and 10 per cent stakes in the joint venture, said they would suspend environmental assessment of the plant and consider reducing its proposed capacity to 600 MW or several smaller 300 MW integrated gasification combined cycle plants. The project was proposed in 2015 but the then Environment Minister said he planned to submit an objection to the power station, saying it was incompatible with Japan's target to cut greenhouse gas emissions by 26 per cent from 2013 levels by 2030. (Reuters, Osaka Gas, Global Energy Monitor)

Survey reveals public dislike of coal in key countries: A public opinion survey commissioned by the UK-based NGO E3G has found a strong preference by citizens of Indonesia, Pakistan, Philippines, South Africa, Turkey and Vietnam for clean energy rather than coal power. Asked what source of energy they preferred their country to invest in, renewable energy was ranked highest by 89 per cent of respondents in Vietnam. The country with the lowest preference for renewable energy was Pakistan (61 per cent of respondents). Coal was ranked lower than nuclear power in four of the six countries. In all six countries foreign investment in renewables was strongly supported but opposed for coal plants. (E3G)

US court rejects Trump administration opening up federal lands for new coal leases: A United States District Court judge has ruled that the Department of Interior’s decision to overturn President Barack Obama’s 2016 moratorium on new coal mining leases on federal lands was “arbitrary and capricious.” The judge found the agency had not undertaken sufficient studies on the potential environmental impact as it is required to do under the National Environmental Policy Act. About 40 per cent of all US coal production occurs on land owned by the federal government. The decision does not automatically reinstate the Obama era moratorium but requires the agency to reconsider the environmental impacts. (New York Times, E & E News, WildEarth Guardians)

Spanish election vote for progressives grows in coal country: The pro-climate Spanish Socialist Party (PSOE) is set to lead negotiations to form a coalition government after increasing its share of the vote in the national election. The election results revealed that PSOE increased their vote in coal regions even though they had committed to phasing coal out. PSOE is set to start negotiations with the left-wing Unidos Podemos, which also supports decarbonising the economy. However, it will also need to win the support of other minor parties to form a government. In October, the government reached an agreement with unions and the coal industry on a €220 million (US$246 million) package to invest in coal mining regions, retrain workers and provide attractive packages for those who want to retire. (Climate Home News)

New coal deals signed at China’s Belt and Road Summit: Despite China’s President Xi Jinping telling the Belt and Road Forum in Beijing that the scheme “aims to promote green development”, a raft of coal agreements were announced at the event. Some of the deals announced were for the controversial 1320 MW Hunutru coal plant in Turkey, two coal plants in Pakistan, the 1960 MW Vinh Tan and the first 600 MW unit at the Nam Dinh plant in Vietnam, and the 600 MW Jambi 2 plant in Indonesia. Other agreements were signed for the Erdenet to Ovoot coal railway and associated road in Mongolia and a coal plant to service the Sihanoukville Special Economic Zone in Cambodia. (Climate Homes News, Tan Wang [Greenpeace East Asia])

Adani lacks enough water for start of Carmichael mine: While Adani holds two temporary water licences, Queensland Government data reveals that they only entitle Adani to take 1775 megalitres (ML) of the 3358 ML the company estimates it would require during the first year of construction of its controversial Carmichael coal mine. Environmental groups are also lobbying the big American insurer Liberty Mutual to join 11 other insurance companies in ruling out involvement in the project. A coalition of groups is also lobbying Rothschild & Co to end its investment mandate for the sale of a stake in Adani’s Abbot Point Coal Terminal, the proceeds of which could be used to finance the Carmichael project. (Guardian, Sum of Us, Friends of the Earth France)

South African mining group launches pro-coal school kit: The Minerals Council South Africa, a peak mining industry lobby group, has released a pro-coal school education kit aimed at Year 12 Economic Geography students. While the kit acknowledges the health impacts form coal plant pollution, it proclaims “clean coal technologies” are being developed to address them. While acknowledging that the South African Government has ratified the Paris Agreement, the Minerals Council claims coal power “remains the cheapest baseload technology” and insists the “least cost option” must remain in the energy mix for an unspecified period during the transition to a low carbon economy. Independent studies dispute the claim that coal power is the lowest cost source of generation. Members of the Minerals Council include Rio Tinto and Glencore, both of which have proclaimed they support the Paris Agreement. (Minerals Council South Africa, Minerals Council South Africa)


Australia: Adani opponent hospitalised with spinal injuries after being hit by pro-coal horserider.

Australia: University study argues Shenhua vastly underestimated the impact of water drawdown on Liverpool Plain farmers.

Canada: Environment groups warn draft agreement between Nova Scotia and the federal government could keep coal in the mix until past 2040.

Europe: Engie sells its interests in coal plants in Germany and Netherlands to US-based Riverstone Holdings.

India: At a 300-strong protest against coal dust pollution from Coal India’s Bhowra mine in Jharkhand a man was shot in the back by security guards. Subsequently, a dozen mining vehicles were burnt.

Japan: Japan Bank for International Cooperation agrees to finance the 1320 MW Van Phong 1 plant in Vietnam despite the plant breaching the bank’s social and environmental guidelines.

South Africa: NGOs launch legal challenge against Environment Department approval of a water diversion project for coal projects.

Taiwan: Nantou County magistrate has filed a complaint against Taipower over pollution from the 5500 MW Taichung plant.

US: Ex coal baron Don Blankenship sues Donald Trump Jr. for defamation over comments in 2018 campaign for nomination as the Republican Party’s candidate for the US Senate seat in West Virginia.

Companies + Markets

DBS rules out financing new coal plants beyond existing commitments: The Singapore-headquartered DBS, one of the major coal financing banks in the Asian region, has upgraded its policy to rule out financing new coal plants “in any market regardless of the efficiency of technologies used, after honouring our existing commitments.” The “existing commitments”, DBS stated, are likely to be completed after 2021. The day after the policy announcement the bank confirmed it would help finance the 1320 MW Van Phong 1 plant in Vietnam. DBS is also involved with the 1200 MW Van Phong 2 in Vietnam and the 2000 MW Java 9 and 10 in Indonesia. (DBS, Market Forces)

More European insurers move away from coal: In mid-April the Talanx Group and its subsidiary Hannover Re announced that “in principle” it would no longer insure new coal power plants or thermal coal mines. However, the company’s policies allow for a loophole in “countries where coal accounts for a particularly large share of the energy mix and access to alternative energy sources is insufficient.” The company said in these countries it would consider insurance for new coal projects on a “case-by-case basis” and against unspecified technical standards. Unfriend Coal called on the company to disclose more detail on how it intended to reduce its exposure to coal plants and mines by 2038. Talanx is the only remaining non-Polish insurer which could support the 7000 MW of new lignite plants proposed in Poland. (Insurance Business, Talanx)

Japan’s largest utility looks to boost renewables but keep coal: JERA, a joint venture that took over 26 power stations owned by Tokyo Electric Power Company Holdings and Chubu Electric Power Company in April, has signalled it intends to expand its large-scale offshore wind generation capacity at home and abroad from its current 650 MW to 5000 MW over the next seven years. The company’s previous target for offshore wind was 3000 MW. The merger of the power generation assets into the joint venture makes JERA Japan’s largest thermal power generator; it owns about half the country’s thermal power fleet including six operating coal plants with a further two under construction and another proposed. JERA’s President, Satoshi Onoda, said the company “will fade out the use of old and low-efficient coal-fired power plantsbut keep coal in the mix in line with Japan’s current goal of coal accounting for 26 per cent of generation in 2030. (Reuters)

New coal plants in China are too expensive: China’s National Energy Administration has announced that 10 regions will be free to start work on new coal plants after 2022 when existing overcapacity is expected to have cleared. However, some analysts doubt the major power companies will invest in more coal capacity. A Morningstar analyst, Jennifer Song, argues that with the profitability of coal plants so low there is little incentive to invest in new coal plants. Song Qiuyi, a Shanghai-based analyst with Capital Securities Corporation argues that most new capital expenditure by coal power companies will be in renewables. (Bloomberg)

Thailand’s energy plan cuts coal’s role: Thailand’s cabinet has adopted the Power Development Plan 2018–2037 which reduces the share of power generation from coal from 25 per cent envisaged in the previous plan to just 12 per cent in the new plan. The revised plan would still see an increase of just over 3000 MW of new coal plant capacity beyond new units currently under construction at the lignite-fired Mae Moh plant. While the proposed 870 MW Krabi project and the 2200 MW Thepa plant have both nominally been shelved, environmental groups remain concerned they will be revived by the Electricity Generating Authority of Thailand which continues to push ahead with environmental assessments for the projects despite strong community opposition. (Reuters)


Indonesia at the Tipping Point: Will it be Coal Lock-in or a Clean Future?, Institute for Energy Economics and Financial Analysis, April 2019. (Pdf)

This nine-page briefing note outlines how the re-elected Indonesian Government could make the finances of the government-owned utility PLN more sustainable and the electricity sector greener.

Tata Power: Renewables to Power Growth, Institute for Energy Economics and Financial Analysis, April 2019. (Pdf) (Media release here.)

This 33-page report charts the strategy switch of Tata Power, India’s largest private utility, away from coal to renewables.

Sexy Killers, YouTube, April 2019.

This 86-minute-long documentary investigates how Indonesia’s policies on coal mining and power plants are shaped to benefit a powerful business elite.