Editor's Note
Best wishes for the New Year to all CoalWire readers.
After the usual end-of-the-year political hiatus in most countries, a lot has already been happening on coal in 2018. Coal India has announced a substantial price increase for thermal coal, underlining the results of a recent Greenpeace analysis that many existing coal plants in India are already uneconomic due to the rapid decline in the cost of renewables. Insurance companies, hit by the mounting costs of natural disasters, are also increasingly realising that they need to pull back from insuring new coal projects.
In the US, a proposed coal export terminal in Louisiana has finally collapsed. In Europe, Finland is considering bringing forward its coal phase-out from 2030 to 2025. The UK has also detailed its plan to phase out coal by 2025, albeit with subsidies in the meantime. In the US, the energy market regulator has rebuffed the coal industry’s pitch for new subsidies to keep old plants open. In India, pollution at the coal port of Goa has prompted the environmental regulator to cancel the permit for coal import operations.
Elsewhere, controversy over coal pollution continues. Residents of Nakhodka in Russia’s Far East continue to agitate for coal dust controls despite opposition from port operators. In Germany, the two main potential coalition partners in a new government have reportedly agreed to back away from a 2020 emissions reduction target but boost renewable generation and appoint a commission to set a coal phase-out date for coal and lignite plants.
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India could save billions replacing old coal plants with renewables
A Greenpeace analysis has found India could save US$8 billion a year by replacing old, inefficient coal plants with new solar and wind projects, write Ashish Fernandes and Joe Sandler Clarke in Unearthed.
The ground is shifting under BHP
While BHP has signalled it may dump its membership of the World Coal Association over differences over climate policy, the company is far from consistent in its treatment of other lobby groups it belongs to, writes Josh Bornstein in the Sydney Morning Herald.
Unanswered questions over murder of Philippines campaigner against coal pollution
Many questions remain unanswered about the July 2016 murder of Gloria Capitan, a Philippines resident campaigning against pollution from a local coal stockpile, writes Jonathan Kaiman in the Los Angeles Times.
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Proposed US coal export terminal permit lapses
The proposal by RAM Terminals to build a new coal export terminal in Louisiana has collapsed after the company failed to seek an extension to a US Army Corps of Engineers (USACE) permit approving the construction of the project. Despite strong local community opposition, in late 2014 USACE granted a permit for the construction of the project. However, the permit expired on November 30, 2017. The collapse of the project has been welcomed by local groups which had campaigned against pollution from the proposed coal stockpiles, uncovered railway wagons and damage to coastal restoration work. (The New Orleans Advocate, Sierra Club)
Indian regulator revokes Goa coal port permit
The Goa State Pollution Control Board (GSPCB) has revoked South West Port Limited’s (SWPL) permit to operate all coal operations at its berths in Mormugao port after finding the company had committed a “gross breach” of its permit conditions by importing almost twice the volume allowed. SWPL, which is a subsidiary of JSW, did not dispute it had imported over 10.11 million tonnes in 2016/2017 when it is only authorised to import 5.48 million tonnes a year. The board has given the company 15 days to remove coal currently stored at the port. The GSPCB also found the Mormugao Port Trust had transhipped coal for Vedanta from unauthorised moorings and had no pollution control measures in place. The board’s action follows a strong community campaign and intense media interest in coal pollution caused by the port operations. (Herald)
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Finland open to accelerated coal phase-out: Finland’s government has announced it will consider closing its remaining three coal plants by 2025 rather than the current 2030 target. The plants, which have a combined capacity of 2300 megawatts (MW), are likely to be hit by a carbon tax from 2019. The country’s Minister for Energy, Kimmo Tiilikainen, said the faster more European Union (EU) countries can phase-out coal power “the easier it will be to increase the common emissions reduction targets within the EU emissions trading scheme.” (Argus) UK confirms 2025 coal phase-out deadline, but keeps subsidies flowing: The UK Government has confirmed it will legislate for the phase-out of unabated coal plants by 2025 but has rejected appeals to bring the deadline forward. The government has also decided the remaining coal plants, which have a combined capacity of 6000 MW, will be eligible for as much as £650 million (US$880 million) in capacity payments to keep them online as reserve generators. The Department for Business, Energy and Industrial Strategy estimates one of the country’s remaining coal plants will close this year. (Guardian, Climate Home) Germany coalition negotiations downgrade climate target: In negotiations over the formation of a new German Government, Angela Merkel’s Christian Democratic Union and the Social Democrats (SPD) have reportedly agreed to drop Germany’s pre-election target of cutting greenhouse gas emissions target of 40 per cent by 2020 and to defer the target for several years. The parties reportedly are proposing to stick to the 55 per cent emissions reduction by 2030 target, issue tenders for 4000 MW of solar and 4000 MW of onshore wind capacity to be built in 2019 and 2020 and further increase offshore wind capacity. It also proposes to appoint a commission to develop a coal phase-out plan by the end of the year. (Reuters, Clean Energy Wire) Birth weight of babies increases after coal plant closure: A study of residents after the June 2014 closure of Portland Generating Station in Pennsylvania found the likelihood of a low-birth-weight baby fell by 0.89 percentage points or about 15 per cent. The study also found the risk of a preterm birth fell by 2.83 percentage points or about 28 per cent after the plant closure. An earlier study by the same authors found air pollution from the plant had a measurable impact on the health of women living within 48 kilometres downwind. (Clean Technica, Journal of Environmental Economics and Management) Russian coal port pollution angers locals: Coal dust pollution from the seven coal berths at Nakhodka in Russia’s Far East has angered residents and became a major political issue prompting President Putin to pledge a crackdown. A further five coal berths are located at Vrangel Bay about 30 kilometres away. However, despite rising rates of asthma and pneumonia potentially caused by the dust, major stevedoring companies are resisting proposals to shift the coal terminals out of Nakhodka or alternatively ensure a ban on open-air stockpiles. (Reuters) “European insurers clearly believe coal is now a bigger reputational threat than it is a commercial opportunity. Politicians should take note, and summon the resolve to hasten the demise of an industry with no long-term future,”
states an editorial in the Financial Times.
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Australia: Complaint may force reopening of investigation into coal on Mackay beaches. Czech Republic: A Swiss court opens door to recovery by the Czech Government of funds from controversial mine privatisation. India: High Court suspends three year prison sentence of Jharkhand’s ex-Chief Minister, pending appeal against his conviction on corruption and conspiracy charges over coal allocation. Thailand: Four killed after Pakistani coal ship sank fishing boat and then failed to stop. Thailand: Police lay new charge against 17 activists arrested over protest against proposed 2000 MW Thepa coal plant. US: Department of Interior retracts announcement that Westmoreland Coal mine expansion in Montana had been approved. US: Eight states sue the Environmental Protection Agency over failure to implement coal plant pollution standards. “Coal is the most polluting industry and the most damaging for world temperature … for us it is critical to stop production of new coal capacity,”
says Jad Ariss, head of public affairs and corporate responsibility at AXA, a major insurance company.
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US regulator rejects pitch for coal and nuclear power subsidies: The Federal Energy Regulatory Commission (FERC) has rejected a proposal by US Secretary of Energy, Rick Perry, for the adoption of new subsidies to prop up uneconomic coal and nuclear plants. In its response to Perry’s proposal, FERC stated submissions by market operators “do not point to any past or planned generator retirements that may be a threat to grid resilience.” However, FERC has announced it will “holistically examine the resilience of the bulk power system” and requested submissions from market operators within 60 days. (Bloomberg, Federal Energy Regulatory Commission) Insurance industry retreats on coal: Insurance companies are increasingly pulling back from insuring new coal and other fossil fuel projects, with the French company AXA revealing it had refused to cover projects which would have paid €10 million (US$12 million) in premiums a year. Harry Floyd, who works for mining clients seeking insurance, acknowledges some mining companies “are very concerned” about the growing pressure on insurance companies to stop insuring coal projects. (Financial Times) Indonesian Government backs off coal export cap: A senior Indonesian Government official has conceded it is unlikely a cap on coal production will be imposed due to the continued growth of the industry. The government had originally flagged a 2017 cap on coal production of 413 million tonnes but by late December about 477 million tonnes had been produced. After promoting a rapid increase in coal production since the 1990s to boost tax revenue, the government has recently unsuccessfully sought to slow exports to cater for potential increased domestic coal generation. (Jakarta Post) China talks up coal mine consolidation: China’s powerful National Development & Reform Commission has announced it wants to further consolidate coal production by requiring the formation of more companies that produce over 100 million tonnes per annum (Mtpa) and are efficient enough to compete in the global export market. At present there are just six companies that produce over 100 Mtpa with 500 million tonnes of annual production from small, inefficient mines slated for closure by 2020. (Reuters) Council challenges BHP’s NSW rehabilitation plan: Muswellbrook Shire Council in the NSW Hunter Valley is challenging a move by BHP and the NSW Department of Planning to apply rehabilitation conditions imposed by the NSW Planning Assessment Commission (PAC) only to newly mined areas of the vast Mt Arthur mine rather than the whole project. The Council, which alleges BHP is not complying with consent conditions imposed by PAC in 2014, has been granted permission by the NSW Land and Environment Court to present expert witness on the standard of rehabilitation at the Mt Arthur mine. (Muswellbrook Chronicle) Coal India approves thermal coal price increase: Coal India has announced it will immediately increase the price of thermal coal by an average of nine per cent to cover increased labour costs. The price increase comes at a time when court cases are challenging the legality of coal plants operating in violation of new pollution control standards and rapid falls in the cost of power from solar and wind generation undermine the viability of existing plants. (Economic Times, Greenpeace India) Eskom cash crisis looms: Despite controversy over Eskom’s dealings with the controversial Gupta family companies the utility has agreed to pay more for coal from Tegeta Resources and Energy’s Optimum mine for its Hendrina plant. Eskom also agreed to amend the coal supply contract to allow boiler-damaging iron impurities as much as 50 per cent higher than currently permitted. Eskom has also reinstated acting CEO Matshela Koko after he was cleared of failing to declare a conflict of interest over a contract to a company in which his stepdaughter had a stake. However, the reinstatements are unlikely to satisfy Eskom’s lenders, which are being called on to refinance the utility’s growing debt. A senior executive at Sasol, which operates coal-to-oil plants and is a major energy consumer, has called for a major restructuring of Eskom. (Business Day, Times Live, Fin24) |
Resources and Energy Quarterly: December 2017, Australian Government’s Department of Industry, Innovation and Science, December 2017. (Pdf; large file)
This 136-page report includes two chapters on thermal and metallurgical coal which provide a useful overview of key trends in demand and supply affecting the global export market. |
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