September 12, 2019
Issue 291  |  View Past Issues
CoalWire

Editor's Note

How fast can a transition away from coal power happen? Endesa, the Spanish subsidiary of the Italian utility Enel, thinks that on current trends Spain’s transition out of coal power could be largely completed by 2025 instead of 2030. In Australia, new opinion polling indicates strong support for the closure of coal plants and their replacement with clean energy and for the phasing out of coal mining. In Botswana, President Masisi has ruled out support for the proposed US$9.5 billion Trans-Kalahari coal railway to Namibia and South Africa. In Gujurat in India, the home state of Adani and Prime Minister Modi, the state government after being burnt by the heavy costs of two mega coal plants has ruled out approving any more.

In Germany, a ministry proposal for implementing the coal exit commission recommendations is to auction off early closures of hard coal capacity before 2030 and offer no compensation after then. In the US, Moody’s has warned that the rapid decline in coal power generation will hit major railway companies with the impact magnified if export sales also significantly decline. While the railway companies are facing big losses, GE is doubling down on its involvement in new coal plant projects around the world. While major exporters have been hit by the recent fall in global coal prices and shifting market dynamics, the Russian Government is going all out to expand exports. Over the last week it has promoted deals to boost exports to India and South Korea and to help Mongolia build a coal railway to lift exports to China.

Bob Burton

Features

General Electric’s global coal plant spree

Despite promoting itself as a leader in decarbonisation, General Electric is involved in the construction of at least a dozen new coal plants around the world, writes Han Chen from NRDC.

Local people challenge coal plant expansion in Bali

Three Indonesian villagers have launched a legal challenge against the doubling of the Celukan Bawang power plant in Bali, writes Tommy Apriando in China Dialogue.

Poland’s new generation pushes slowly toward renewable energy

Poland’s trenchant opposition to phasing out coal and lignite plants may be softening, writes Jaclyn Diaz in Bloomberg Law.

Top News

Spanish utility says coal exit could happen faster than 2030 target: Jose Bogas, the CEO of Endesa, has flagged that the phase-out of coal power in Spain could happen far sooner than the current 2030 target. “Assuming coal-fired [capacity] should be reduced between 2025–2030 [under current energy policy], market conditions today say this has changed to 2020–2025, at least,” he said. In late 2018 Endesa, a subsidiary of the Italian energy company Enel, announced it planned to close the 1101 megawatt (MW) Teruel and 1051 MW Compostilla plants in 2020. It also operates the 1158 MW Carboneras plant. (Montel, Global Coal Plant Tracker)

Polling reveals climb in support for Australian coal phase-out: Opinion polling for the Australia Institute indicates that 64 per cent of Australians support an end to coal mining and 31 per cent oppose the establishment of new coal mines while allowing existing ones to operate to the end of their licence. Thirty-one per cent want existing coal mines shut down as quickly as possible. Only four per cent of those surveyed supported government subsidies for new coal mines. While the Australian Government is currently considering offering financial support for new or existing coal plants, 70 per cent of those surveyed support the orderly closure of coal power plants and their replacement with clean energy. The survey, which was undertaken by YouGov Galaxy, surveyed 1960 Australians aged over 18. (Guardian, Australia Institute [pdf])

North Macedonian prosecutor files criminal charges over coal ash pollution: The public prosecutor’s office in the city of Bitola has filed criminal charges against the state-owned company REK Bitola over its failure to properly manage the plant’s coal ash site at its 699 MW Bitola coal power plant in North Macedonia. The charges allege that between January 2015 and February 2017 the company and its director breached environmental laws by permitting coal ash from the power station to be dumped in the landfill without covering it with overburden to prevent air pollution. The case is seen as precedent setting for a regulator in the Western Balkans taking action against coal ash pollution. (Bankwatch)

Under legal pressure, Eskom outlines first steps in cutting pollution: In a briefing for journalists, Eskom’s Chief Operating Officer, Jan Oberholzer, noted that in late 2018 the utility was not implementing emission retrofit projects or complying with pollution limits. Eskom’s plan for the coming summer is to initially focus on reducing emissions at seven of its 87 generation units “where emissions are high” and where there is a “potential risk” that 4470 MW of capacity could be forced to shut down. Oberholzer also said Eskom will have a “strong focus on expediting projects to ensure timeous legal compliance.” In June 2019, groundWork and Vukani Environmental Justice Movement in Action launched legal action against the South African Government over pollution from Eskom’s 12 coal plants in the Highveld Priority Area. (Eskom [p. 22, pdf])

Australian court ruling upends challenge against coal mine expansion: The Queensland Court of Appeal Court of Appeal has ruled the Land Court did not have the power to consider groundwater impacts from mining when it recommended that New Hope Corporation’s Acland Stage 3 mine expansion not be approved. Instead, the court ruled that the impacts on groundwater could only be considered during the water licencing process rather than in the granting of an environmental authority. The effect of the ruling is unclear but the Court of Appeal has given parties two weeks to file submissions on the next steps in the case. The Oakey Coal Action Alliance, representing local farmers and residents, has opposed the mine expansion arguing the groundwater depletion would adversely affect the agricultural sector. Lock the Gate has called on the Queensland Government not to approve the water licence for the Stage 3 mine expansion. Last week New Hope sacked 150 workers, half its mine workforce. The company has also called on the Queensland Government to approve the expansion, which is proposed to produce 7.5 million tonnes of thermal coal a year. (Lock the Gate, Environmental Defenders Office)
 

Kenyan coal plant promoters appeal court decision: Amu Power, a joint venture of Kenyan and Chinese firms, has lodged an appeal against the June 2019 decision of Kenya’s National Environment Tribunal (NET) to cancel the licence issued by the National Environment Management Authority (NEMA) for the proposed 1050 MW Lamu coal plant. The court found NEMA’s approval of the environmental impact assessment breached its own procedures and failed to take account of Kenya’s Climate Change Act. The NET also found that there was no proper process of public participation in the environmental assessment. Amu Power argues its environment assessment proposed adequate mitigation measures and that alternative sites had been considered. Amu Power also challenges NET’s finding that there was no proper public consultation process. (The East African)

News

Australia: Chinese owned coal ship detained over A$64,000 (US$44,000) in alleged unpaid wages owing to eight crew from Myanmar.

Australia: BHP urges shareholders to oppose resolution urging it to dump lobby groups over climate policy but says it will review its membership of the coal-promotion group Coal21.

Bosnia and Herzegovina: Residents complain of pollution from lignite mine and the recently built Stanari plant owned by UK-based company, EFT Investments SE.

Bulgaria: Prosecutor orders raids on four coal plants suspected of illegally burning waste.

India: Central Pollution Control Board directs the Punjab State Power Corporation to install flue gas desulphurization on the 840 MW Ropar and the 920 MW Guru Hargobind Lehra Mohabbat coal plants.

Malaysia: Government seeks recovery of national pension funds misallocated to Mongolian coal and other projects.

Mozambique: Vale signs non-binding MOUs with Kibo Energy to supply coal to, and buy power from, the proposed 150 MW Benga coal plant.

Poland: Greenpeace’s Rainbow Warrior blocks the unloading of a coal ship at the port of Gdansk.

Russia: The capacity of the Vostchotney coal port has doubled with the commissioning of the new export terminal in Russia’s Far East.

Thailand: Thai Minister of Energy flags possibility of the Electricity Generating Authority of Thailand co-investing in the proposed 2000 MW Koh Kong coal plant in Cambodia.

UK: GCM Resources enters into a £12,000 (US$14,800) a month lobbying contract with DG Infratech to win approval for the proposed Phulbari mine and 6000 MW of coal plants.

US: Montana lawmakers propose spending US$1 million to market the state’s thermal coal to global buyers.

Companies + Markets

Botswana abandons proposed coal railways: Botswana’s President Mokgweetsi Masisi has ruled out government financial support for the proposed US$9.5 billion Trans-Kalahari railway to Walvis Bay in Namibia and then to Johannesburg in South Africa. Masisi said the project is not economically viable. “As coal is currently out of favour, those projects will not proceed,” he told a World Economic Forum event in South Africa. A road to Walvis Bay already exists but the push for a new railway was aimed at facilitating the development of the Mmamabula coal field in south-eastern Botswana by connecting it to the coal export market and coal plants in South Africa. (Iol)

Draft law proposes no compensation for shutdown of German coal plants: The Ministry of Economy has reportedly proposed Germany’s coal power exit be implemented by calling tenders up until 2030 from the owners of hard coal plants wanting to retire plants early. After 2030 the ministry proposes no compensation be offered and plants be shut down according to age. However, the draft proposal does not address the closure of lignite plants. It is proposed that the draft law be finalised by the end of September. (Clean Energy Wire)

Coal India seeks coking coal deals in Russia’s Far East: Prime Minister Narendra Modi announced at the Eastern Economic Forum in Vladivostok that India would extend a US$1 billion line of credit for projects in Russia’s Far East. Modi claimed that 50 agreements worth $5 billion had been signed at the forum. One of the agreements was between the government-owned Coal India and Far Eastern Agency for Attracting Investments and Supporting Exports for mining coking coal. Another Coal India agreement was with Eastern Mining Company to investigate coal projects in the Far East. Russia and South Korea have reached a preliminary agreement to resume shipping Russian coal via the North Korean port of Rason by the end of the year. In 2016 South Korea suspended imports of coal through Rason following the imposition of sanctions on North Korea. (Indian Express, Economic Times, UrduPoint)

Facing increased competition in coal export market, Mongolia lands Russian loan: Faced with increased Chinese coal quality standards, the Mongolian Coal Association has flagged the need for coal exports to be of higher quality as it increasingly competes with washed and blended metallurgical coal from exporters such as Australia. Mongolia’s thermal coal exports compete with imports from Russia, China and Indonesia. In 2018 over 40 per cent of China’s 64.2 million tonnes of imported coking coal originated from Mongolia. On a one-day visit to Mongolia, Russian President Vladimir Putin agreed to loan Mongolia 100 billion rubles (US$1.5 billion) to construct a new railway connection to the Chinese border to facilitate increased exports of coal and other minerals. Coal is estimated to provide one-third of Mongolia’s export income. (Platts, Daily Times)

Moody’s flags US railways exposed to decline in coal power: Moody’s Investment Services estimates that US railroad companies could lose up to US$5 billion in revenue as thermal coal demand falls to half current levels by 2030. Coal accounts for between 16 and 18.3 per cent of the revenue of three railroad companies – CSX, BNSF and Norfolk Southern Corporation. Moody’s estimates that BNSF and Union Pacific are the most exposed to the expected rapid decline in demand for thermal coal from the Powder River Basin mines in Wyoming and Montana. Moody’s notes that coal exports will become a “more volatile source of revenue” for railways but one which companies such as CSX and Norfolk Southern will rely on for coal sector revenue. (S & P Global, Moody’s)

Major Indian state rules out more coal plants: Gujarat Minister for Energy, Saurab Patel, has announced that the state will not approve further coal plant proposals but will be “going very high on solar renewable energy.” The Gujarat Government has pressed state-based utilities to bail out Adani and Tata Power’s stranded coal plants at Mundra. A local analyst said that most of the coal plants owned by Gujarat State Electricity Corporation are currently not operating due to their high generation costs while the plant load factor of those plants that are operating is only about 40 per cent. The state utility is entering into power purchase agreements for new solar generation at three rupees (four US cents) per kilowatt hour, a fifth of the cost of older agreements. (Indian Express)

South32 looks to offload South African coal mines to Seriti Resources: South32 has entered into a non-binding agreement to sell its South African coal mines to Seriti Resources, for a “modest” initial payment. An additional payment based on the global export price has yet to be finalised. South32 CEO Graham Kerr told analysts he would be happy to sell the coal mines for a dollar if the buyer took on all the US$756m in closure liabilities. South32 was spun off from BHP in 2015 to hold mining projects the parent company no longer wanted. If the deal is completed, Seriti Resources could become the largest coal supplier to Eskom. Questions have also been raised about the appropriateness of a meeting between South32 and Seriti Resources with the Department of Mineral Resources and Energy before the agreement was announced. (Business Day, Mail & Guardian)

Resources

The Lowdown on coal, Climate Analytics, September 2019.

This interactive tool displays the current and planned coal power capacity around the world and the estimated greenhouse gas emissions from them.

General Electric’s coal plant profiteering, NRDC, September 2019. (Pdf)

This 8-page report documents General Electric’s role in continuing to support new coal plants around the world with case studies of proposed projects in Kenya, Kosovo, Bosnia, and Vietnam.

Risks Growing for India’s Coal Sector, Institute for Energy Economics and Financial Analysis and the Applied Economics Clinic, September 2009. (Pdf)

This 27-page report details how India's coal power generation sector is being hit by declining water availability, huge overcapacity and growing competition from renewables, especially in the monsoon season.