September 10, 2020
Issue 338  |  View Past Issues

Editor's Note

The age of coal plants slated for closure may be about to hit a new low as the Swedish utility Vattenfall has submitted a compensation bid to close its loss-making five-year-old Moorburg plant in Germany. In India, a new report argues that the best way to restore financial health of state-owned distribution utilities is to scrap part-built coal plants, retire old plants quickly to avoid the costs of pollution control upgrades, and instead invest in renewables. In Poland, a new draft energy strategy suggests a potentially large reduction in coal and lignite’s share of electricity generation, albeit at a rate slower than is required to meet the Paris Agreement. This comes as Poland’s largest bank has revealed it quietly adopted a coal policy earlier this year ruling out support for new coal mines and power plants. Italy’s largest bank, UniCredit, has also unveiled a similar policy.

While China likes to promote itself as a climate leader, coal activities by Chinese companies overseas have long been a source of controversy. In Turkey, NGO groups want a part-built lignite plant scrapped. In Zimbabwe, the secret approval by President Emmerson Mnangagwa of Chinese companies plans to explore for coal inside the Hwange National Park prompted a public backlash, forcing the government to cancel the licences.

In South Africa, a news company has commenced legal action against Eskom for refusing to release records relating to the investigation of serious corruption allegations involving the new Medupi and Kusile coal plants. In the US, despite strong public support for the repeal of Ohio law bailing out coal and nuclear plants at the heart of a US$60 million bribery scandal, the legislature has yet to agree on whether or not to dump the legislation.

Bob Burton


A Chinese coal plant highlights Turkey’s flawed energy policy

Civil society groups are calling for the scrapping of the part-built 1300 megawatt (MW) Hunutlu coal power project which is China’s biggest foreign direct investment in Turkey, writes Elif Gunduzyeli in China Dialogue.


Planning approval rejected for proposed UK coal mine

The UK Communities Secretary Robert Jenrick has refused planning permission for Banks Mining’s proposed open cut coal mine near Druridge Bay on the grounds that it is “not environmentally acceptable”. Banks Group had proposed to produce 2.8 million tonnes of coal over a six-year mine life. Druridge Bay features a seven-mile beach, dunefields, wildlife reserves and agricultural land. The decision has been welcomed by Save Druridge Bay and national climate and environmental groups which have waged a seven-year campaign against the proposal. In a letter rejecting the company’s application for planning approval, Jenrick stated “the proposed development is not likely to provide national, local or community benefits which clearly outweigh its likely impacts (taking all relevant matters into account, including any residual environmental impacts).” Banks Mining said it will review the decision and has the option to seek judicial review. (Northern Echo, Communities Secretary Robert Jenrick [Pdf], Friends of the Earth)

Top News

Youth launch class action against Australian Government over coal mine expansion: A class action has been launched in the Federal Court of Australia by eight young people seeking an injunction to prevent the Australian Government from approving the expansion of Whitehaven Coal’s Vickery mine. In August, the New South Wales Government approved the expansion of the mine to allow the production of 168 million tonnes of metallurgical and thermal coal. The legal action, launched by Equity Generation Lawyers and open to all young people in the world under 18, argues that Federal Minister for the Environment, Sussan Ley, has a duty of care for young people and approving the mine expansion would breach that responsibility by making climate change worse. (ABC News, Equity Generation Lawyers)

Backlash pushes Zimbabwe to cancel National Park coal licences: A public backlash against the secret approval of two coal exploration licences inside Hwange National Park has forced the Zimbabwean Government to announce the cancellation of all mining titles in National Parks. NGOs were recently stunned to discover that in early 2019 the government had secretly granted permits to two Chinese companies, Zimbabwe Zhongxin Coal Mining Group and Afrochine Energy, to explore for coal in the renowned park.The exploration first came to light after a local NGO, Bejane Trust, discovered a drilling rig being operated in the National Park. The NGO was told the exploration licences had been personally approved by Zimbabwe’s President Emmerson Mnangagwa. After the Zimbabwe Environmental Law Association and a local resident filed a legal challenge against the Zhongxin Mining Group licence, the government announced Cabinet had agreed to cancel all mining licences in National Parks. (News24,  DispatchLive, Guardian, Bejane Trust)

Coal company challenges Canadian Government over assessment: Coalspur Mines has requested a judicial review of the decision by Canada’s Minister for Environment and Climate Change, Jonathan Wilkinson, to require a federal environmental assessment of the company’s proposal to expand mine production from six million tonnes to over 12 million tonnes a year. Coalspur argues Wilkinson acted “unlawfully, unreasonably and unconstitutionally” in ordering a federal assessment which was requested by the Louis Bull Tribe, Stoney Nakoda Nation and Ecojustice. University of Calgary professor in environmental law, Sharon Mascher, argues Wilkinson had no option other than to require a federal assessment given the concerns over issues such as the rights of Aboriginal peoples and potential impacts on endangered species, federal lands and fisheries. (The Narwhal)

Media company launches legal action to access Eskom corruption inquiry report: The Daily Maverick, a South African news website, has launched legal action seeking an order that Eskom provide records of the inquiry by the law firm Bowmans into allegations of large-scale corruption associated with the construction of the 4764 MW Medupi and the 4800 MW Kusile coal plants. The Bowmans inquiry was shut down by Eskom before it was completed. Eskom rejected both the Daily Maverick’s initial request and subsequent appeal under the Promotion of Access to Information Act. The challenge comes as Eskom has suspended the managers of the Kendal and Tutuka coal plants and recalled interim managers of the Kriel and Duvha plants as the utility imposed load shedding of between 3000 and 4000 MW late last week. The four plants have a combined capacity of 14,400 MW or about one third of Eskom’s capacity. (Daily Maverick, Business Tech)

Beyond Coal coalition launched in South Korea: A coalition of South Korean civil society groups has launched Korea Beyond Coal to press the government and companies to phase out coal power plants by 2030. South Korea currently has 80 operating coal units, which currently provide about 40 per cent of the country’s electricity, and a further seven units are under construction. South Korea imported an estimated 99 million tonnes of thermal coal in 2019, making it the world’s fourth largest thermal coal importer. A spokesperson for the Korea Federation for Environmental Movements, Lee Ji-eon, said the government’s current energy plan is to allow existing plants to operate for up to 30 more years. On the same day of the launch of Korea Beyond Coal, South Korea’s President, Moon Jae-in, announced a further 20 coal plants would be shut down by 2034 in addition to the 10 slated for closure by the end of 2022. (Korea Beyond Coal, Korea Herald)

US legislator pleads not guilty to charges over bailout scandal: Former Ohio House of Representatives Speaker Larry Householder has pleaded not guilty to a federal racketeering charge related to the Ohio coal and nuclear power plants bailout scandal. Householder is a Republican member of the Ohio parliament and is running uncontested for re-election in November. In July, Householder and four other associates were arrested by the US Department of Justice and face charges over a US$60 million campaign with funding from the power utility FirstEnergy and others to elect pro-Householder legislators and push through HB 6, a bill to bail out two nuclear plants and provide about US$450 million for two coal plants owned by Ohio Valley Electric Corporation. The bill also weakened the state’s energy efficiency standards and reduced the state’s 2026 renewable energy target. Despite strong public support for the repeal of HB 6, the Ohio legislature has yet to resolve whether to scrap the legislation. (News-Herald, WCPO, Eye on Ohio)

Poland concedes diminished role for coal in draft energy strategy: A draft revision of Poland’s energy strategy flags the prospect of coal’s share of electricity generation declining, depending on the European Union carbon price, to between 37 per cent and 56 per cent in 2030. Last year the share of coal generation in 2030 was estimated at between 56 per cent and 60 per cent. The revised strategy, which has yet to be discussed with coal unions or approved by the government, proposes the construction of 8,000 to 11,000 MW of offshore wind and 6000 to 9000 MW of nuclear capacity. Greenpeace Poland dismissed the revised strategy as economically unrealistic and inappropriately continuing with high levels of coal generation after 2030. Greenpeace Poland recently estimated the bulk of Poland’s coal power plants could close by 2035 based on likely market conditions and other constraints. (Reuters, Greenpeace Poland [Polish])


Australia: Chinese businessman deemed “uncooperative” in trial of former mining ministers Ian Macdonald and Eddie Obeid over the allocation of the Mt Penny coal exploration lease.

Australia: The Port of Newcastle has been urged not to renew the Carrington Coal Terminal lease when it expires in 2024.

India: Government considers open-access coal cargo monitoring system to help drive reduction in imports.

US: Bid for US$20 million grant to bail out bankrupt Californian coal port company has failed to win support of the Utah legislature.

Companies + Markets

Report finds cost savings in closing old Indian coal plants: A report by Climate Risk Horizons has found debt-laden Indian distribution utilities (discoms) could dramatically reduce the financial burden on consumers by closing 36,500 MW of old coal plants. The report estimates prompt closure of the plants could avoid the 180 billion rupee (US$2.4 billion) cost of retrofitting flue gas desulphurisation units and low-nitrogen oxide (NOx) burners by 2022. Replacing these plants, which generally supply more expensive power than available from the market, with new renewables capacity or from the market would save discoms 70 billion rupees (US$949 million) annually. The report argues that suspending early stage construction of 14,000 MW of state-owned plants in Bihar, Maharashtra, Tamil Nadu, Telangana and Uttar Pradesh would save a further 920 billion rupees (US$12.5 billion). The report argues that tackling wasteful spending on coal projects is a critical priority as Indiaʼs discoms have a critical role to play in facilitating the country’s ambitious energy transition plans. (Business Standard)

Vattenfall offers up five-year-old coal plant in Germany for closure: The Swedish utility Vattenfall has submitted a tender bid to close its five-year-old 1600 MW Moorburg plant in Germany. As part of its coal exit plan, Germany has requested compensation bids to close 4000 MW of hard coal plants in 2021. Vattenfall’s CEO, Magnus Hall said while the plant, which was commissioned in 2015, was the youngest and most efficient in its fleet, “if you are losing money with it, you have to do something.” The coal exit plan allows plants that don’t seek compensation to operate up until 2038. Greenpeace said Hall's comment that the Moorburg plant was losing money indicates that hard coal plants are “economically and politically dead”. (Clean Energy Wire)

Report finds newest Queensland coal plants the least reliable: An analysis by the Australia Institute of two years’ data has found CS Energy’s 750 MW Kogan Creek coal plant was the most unreliable unit in the National Energy Market (NEM). The NEM covers the bulk of Australian electricity grid except for Western Australia and the Northern Territory. The Kogan Creek plant, a supercritical coal plant commissioned in 2007, suffered 13 breakdowns. The institute found that between mid-December 2017 and the end of 2019 there were 185 breakdowns at coal power stations in the NEM; 65 of them were at Queensland plants. (ABC, Australia Institute)

UK utility fined for failing to inform market plants were still online: Britain’s energy regulator Ofgem has fined energy company SSE £2.06m (US$ 2.7 million) for failing to promptly inform the electricity market that on March 22, 2016 it had entered into a non-binding agreement with National Grid to continue to operate coal units at the Fiddler’s Ferry power station. Under the agreement SSE was to provide backup capacity at one of the three coal units from 1 April that year. Ofgen found the failure to inform the market until March 30 meant there was four days trading on the wholesale electricity market on the assumption that the three units would be closed after April 1, as had been previously announced. The European Union’s 2011 Regulation on Wholesale Energy Market Integrity and Transparency requires “inside information” likely to significantly affect the wholesale price of energy to be disclosed in an “effective and timely manner”. (BBC, Ofgem)

Italian bank sets 2028 end date for coal finance: In an update of its 2016 coal lending policy, Italy’s largest bank, UniCredit, has ruled out providing dedicated financial support for all new and existing coal-related projects. Under the terms of the policy, existing customers earning less than 25 per cent of their revenue from coal-related activities must have a “credible” plan in place by the end of 2021 to exit from the coal business by 2028. The changes have been broadly welcomed by Reclaim Finance which ranks it as a “high quality” policy using their new coal policy tool for assessing finance policies. (Reuters, UniCredit [Pdf], Reclaim Finance)

Polish bank rules out new coal power and mining support: In response to questions raised at its annual general meeting PKO BP, Poland’s largest bank, revealed it adopted a coal policy in February 2020 that rules out financing new coal and lignite mines and coal plants. The policy also commits the state-owned bank to a gradual reduction in financial support for companies in the coal sector but does not set absolute targets for reductions. The bank declined to comment on the reasons it renewed a revolving loan for PGE SA, Poland’s biggest power utility and, in 2018, Europe’s largest greenhouse gas emitter. (PKO BP [Pdf])

Just Transition fund could strengthen local economy: A study for ClientEarth argues financial support from the European Union’s Just Transition Mechanism could result in up to six times more jobs than currently provided by the 5420 MW Belchatow lignite plant and associated mine. Using the methods of the European Union’s Joint Research Centre, Instrat, the author of the report, estimates investments in retrofitting existing buildings, solar installations, onshore wind capacity and electric vehicle battery manufacture could result in up to 61,000 jobs. The report argues the Lodzkie region has the opportunity to obtain up to 45 billion zloty (US$ 11.9 billion) of EU funding over the 2021–2027 period, including 13 billion zloty (US$3.4 billion) from the Just Transition Mechanism. However, if Poland refuses to pledge to achieve climate neutrality by 2050 it will only be eligible for half the funding. (Emerging Europe,  ClientEarth [Pdf])


Coal Out: Fossil fuel power station breakdowns in Queensland, Australia Institute, September 2020. (Pdf)

This 24-page report argues that the prevalence of sudden breakdowns at coal and gas power stations illustrates the vulnerability of Australia’s electricity grid to large, inflexible fossil-fuelled units.

3Rs for DISCOM Recovery: Retirement, Renewables and Rationalisation, Climate Risk Horizons, September 2020. (Pdf)

This 62-page report outlines how to restore the financial viability of India’s distribution utilities (discoms) by retiring old coal plants and suspending new state-owned projects.

Proposal for the 2030 Energy Mix in Japan [English Summary], Renewable Energy Institute, September 2020. (Pdf)

This 16-page summary outlines how Japan could phase out coal by 2030 complemented by the adoption of a renewable energy target of 40–45 per cent.

Coal Policy Tool, Reclaim Finance, September 2020.

This online tool allows a comparative analysis of the coal finance policies released by financial institutions against criteria designed to test whether policies are compatible with the Paris Agreement’s goal of limiting global warming to 1.5°C.