April 18, 2019
Issue 272  |  View Past Issues

Editor's Note

The tally of companies making significant steps away from coal continues to grow. In South Africa, Standard Bank has obliquely confirmed that it will not be involved in financing two proposed new coal plants. The Singaporean bank, OCBC, has also ruled out involvement in financing further coal plants, albeit with an exemption for two proposed plants in Vietnam. In a potential blow to mining industry lobby groups seeking to frustrate climate action, Rio Tinto has flagged it may end its membership of groups that advocate policies on coal and climate which aren’t compliant with the Paris Agreement. In the US territory of Puerto Rico, the government has signed into law an exit from coal by 2028. In Taiwan, strong public opposition to pollution from the huge Taichung power plant has spurred tougher enforcement action over water pollution. In the US, a federal court judge has directed the Environmental Protection Agency to update its power plant wastewater pollution rules.

The latest data reveals that in India new coal plant capacity was only marginally greater than closures. As the economics of coal power have soured, coal lobbyists have increased efforts to prop up ailing plants and mines. In the US state of Indiana, legislators have rejected a proposal — backed by a coal industry lobby group — to block approval of new renewables or gas generation. In India, Adani Power has partially won a long-running campaign to be granted an increased power price for almost half the capacity of its huge Mundra plant because it miscalculated the future cost of imported coal. In the US, a court has overturned the Trump administration’s rescission of a rule designed to ensure royalties for coal and gas from federal lands paid a fair rate.

Due to the Easter holiday break, the next edition of CoalWire will be out on May 2.

Bob Burton


Western Balkans waiting for a green energy revolution

Governments in the Western Balkans are pouring an estimated €170 million (US$190 million) a year into subsidising old coal power plants but a renewables revolution is waiting in the wings, writes Doris Pundy in Deutsche Welle.

Top News

Puerto Rico bans use of coal after 2028: The Governor of Puerto Rico, Ricardo Rossello, has signed into effect legislation requiring the Puerto Rico Electric Power Authority to phase out coal power by the end of 2028 and to source 40 per cent of power from renewables by 2025. The legislation requires the island to be totally powered by renewables by 2050. The country’s only remaining coal plant is the 454 megawatt (MW) Guayama plant operated by AES Corporation, which has faced sustained community opposition over pollution including from its coal ash dump. In 2017, Hurricane Maria destroyed the electricity grid of Puerto Rico, a US territory. (Utility Dive)

Taiwan utility fined over wastewater management and faces legal action: Taichung City Government has fined the state-owned Taiwan Power Company (Taipower) 20 million New Taiwan dollars (US$648,000) for breaching levels specified in the Water Pollution Control Act for nitrates in wastewater. Tests earlier in the year on wastewater emissions from four other units at the 5500 MW Taichung plant revealed they also breached regulatory limits. The Taichung Environmental Protection Bureau has given Taipower until April 30 to submit a plan to ensure future compliance with the standards. The day before the fine, the adjoining Nantou County announced that it planned to file legal action against Taipower alleging that pollution from the plant is endangering public safety. Taichung City Government said it is also considering possible legal action. (Taipei Times, Focus Taiwan)

US state rejects move to block coal alternatives: Indiana legislators have rejected an amendment that would have directed the Indiana Utility Regulatory Commission to block any new power purchase agreements or power plants over 250 MW capacity until 2021, a measure intended to block new renewables or gas generation displacing existing coal plants. The Energy Policy Network (EPN), a coalition “created specifically” to oppose local and state-based anti-coal campaigns, has earmarked US$175,000 to oppose plans by the Northern Indiana Public Service Corporation to purchase wind power to allow the closure if its coal plants. EPN, according to a 2017 filing with the Internal Revenue Service, is funded by Peabody Energy, Cloud Peak Energy and the National Mining Association. (Utility Dive, Indianapolis Star)

US court orders EPA to toughen coal plant wastewater standards: A US federal appeals court has ruled that two sections of the Environmental Protection Agency’s (EPA) 2015 power plant wastewater pollution rule are illegal and needed to be revised. Circuit Judge Stuart Kyle Duncan ruled that the EPA had failed to use the best available technology economically available, as required by the Clean Water Act, to set standards regulating wastewater emissions from old coal ash dams and impoundments. The judge noted that the last time the standards were updated was 1982, “the same year that saw the release of the first CD player, the Sony Watchman pocket television, and the Commodore 64 home computer.” (The Hill, Waterkeeper Alliance)

Rio Tinto draws boundary lines for membership of mining lobby group: Following negotiations between the Australasian Centre for Corporate Responsibility (ACCR) and Rio Tinto, the mining company has outlined that it expects policies advocated by industry associations it belongs to to be consistent with its position on climate and energy policy and the Paris Agreement. The company expects Australian industry associations to publicly oppose subsidies for coal, “not undermine” the role of renewables in the energy mix, and that any advocacy on coal in the medium to long term “must be consistent with Paris targets.” Rio Tinto stated that it will “consider our support and membership” of groups that advocate polices “consistent with these principles.” In 2018, Rio Tinto paid US$1.4 million (A$1.96 million) as its membership contribution to the Minerals Council of Australia, one of the leading opponents of reducing coal consumption. (Guardian, ACCR,  Rio Tinto)


Australia: Jindal Steel and Power's Australian subsidiary Wollongong Coal closes the Wongawilli mine, its only operating mine, after NSW regulators issued prohibition notices on further mining.

Canada: Conservative landslide in Alberta election will increase conflict with federal government over coal phase-out and carbon tax.

Greece: Major energy consumers consider buying Meliti lignite plant from PPC but carbon price poses a major risk.

Malaysia: Federal court rejects three procedural appeals by ex-Prime Minister Najib Razak over corruption charges relating to SRC International’s coal deal.

US: Cloud Peak Energy gets second extension to repay US$1.8 million originally due on March 15 with another payment of US$17.4 million due on May 1.

US: Department of Energy announces US$100 million grants program for small, flexible coal plants.

US: Duke Energy plans to appeal against North Carolina requirement to move coal ash from six unlined dams to lined storage.

Companies + Markets

New coal plant capacity in India fell dramatically in 2018: India’s coal plant growth continues to slow with 3300 MW of new plants commissioned in the year to March 2019 while 2100 MW of old plants were closed in the 11 months to the end of February. The Institute for Energy Economics and Financial Analysis (IEEFA) notes that 6700 MW of renewables capacity was commissioned in the year to the end of February, down from the 12,000 MW the year before due to factors such as duties being imposed on imported solar modules, the cancellation of tenders and transmission bottlenecks. However, the Ministry of Renewable Energy notes that 28,000 MW of new renewables has been auctioned and a further 38,000 MW is being tendered. IEEFA notes that 95 per cent of wind and solar capacity tendered out last year was for prices under three rupees per kilowatts hour, which is the average cost of generation in India’s coal-dominated grid. (Economic Times)

Standard Bank rules out funding for two new South African plants: In a new climate policy South Africa’s Standard Bank has effectively ruled out providing funding support for the proposed 630 MW Thabametsi or the 306 MW Khanyisa coal plant. The bank has ruled out support for projects over 300 MW that rely on sub-critical technology. Plants such as these have emissions of over 850 grams of carbon dioxide per kilowatt hour (g CO2/kWh). For projects below the 300 MW threshold, the bank stated only the 75 poorest International Development Association (IDA) countries as defined by the World Bank would be eligible. However, the bank will consider funding for ultra-super-critical projects with emissions of below 750 g CO2/kWh or super-critical projects of less than 500 MW or where they are in IDA countries. The largest shareholder in Standard Bank, which operates across Africa, is the Industrial and Commercial Bank of China. Previously, FirstRand Bank and Nedbank had ruled out support for the projects, which are included in South Africa’s draft Integrated Resource Plan. (Standard Bank)

Southeast Asian bank rules out more coal plants, with caveats: The Chief Executive Office of OCBC Bank, Samuel Tsien, has ruled out funding new coal plants apart from existing projects or two new Vietnamese plants he said the bank is committed to. “We hope that by doing this, we are encouraging the governments to do facilitating, arrangements for the countries to move from coal to renewable,” he said. OCBC is the second largest lender in Southeast Asia. The plants in Vietnam are believed to be the 1320 MW Van Phong 1 and 1200 MW Vung Ang 2. The NGO group Market Forces has welcomed OCBC’s shift but called on it to end its involvement in the Vietnamese plants. The Van Phong 1 plant, Market Forces said, would pollute at far higher levels than would be permitted in wealthier Asian nations. (The Straits Times, Market Forces)

Court overturns Trump administration revocation of royalty rule: A US federal appeal court judge has overturned the Trump administration’s repeal of a 2016 rule which required royalties on coal and oil and gas mined on federal and tribal lands to be paid on the basis of the price sold to the first arms-length company. The judge ruled that the Interior Department’s repeal of rule was “arbitrary and capricious.” It is estimated that the reinstatement of the rule would boost royalties collected by the government by US$71 million a year. In 2012, Reuters revealed that coal companies were selling coal destined for the export market to affiliated companies at the low domestic price which reduced the royalties payable. The affiliates then sold the coal into the export market at the far higher global price. (Reuters)

HSBC refuses to budge on coal lending: Despite protests outside and questions from investors inside its annual general meeting in the UK, HSBC has refused to back away from its 2018 policy supporting financing of new coal power stations in Bangladesh, Indonesia and Vietnam. HSBC is one of the world’s ten largest banks and is currently considering support for a proposed coal plant in Vietnam and a port-dredging project at Payra in Bangladesh. “We don't agree that we need to bring an immediate end to financing of all fossil fuels,” Chief Executive John Flint said. Flint acknowledged that coal would need to be the first fuel removed from the global energy mix but declined to rule out support for coal plants in Vietnam and insisted he had no knowledge of the Payra project in Bangladesh. HSBC’s unresponsiveness was criticised by a coalition of NGOs. (Reuters, Market Forces)

Report reveals arm of World Bank’s support for Indonesian coal mines: A report by Inclusive Development International (IDI) has found that despite the World Bank’s nominal ban on coal financing in 2013, its private sector lending arm, the International Finance Corporation (IFC), has indirectly funded six major coal mining companies operating in Indonesia. In 2017, the six companies funded indirectly via the IFC produced over 227 million tonnes of coal. One of the beneficiaries of IFC funding is Kaltim Prima Coal while another is Toba Bara, a coal mining company owned by Luhut Pandjaitan, the Coordinating Minister of Maritime and Resources in the Indonesian Government. IDI’s ongoing investigation has identified 150 projects that have been funded by the IFC since 2013, of which over half were coal-related. The IFC’s draft Green Equity Strategy, which was released in October 2018, aims to eliminate intermediary banks it funds from financing coal and increase support for renewable energy. (Jakarta Post, Inclusive Development International)

US utility pushes for coal plant subsidies as transition strategy: Vistra, which bought a fleet of eight ailing coal plants in Illinois from Dynergy last year, is lobbying state legislators to pass the Illinois Coal to Solar and Energy Storage Act which would authorise the payment of up to US$140 million a year from 2020 through 2024. Vistra argues the payments are necessary to keep the plants online while it adds solar and energy storage at the sites. However, the Natural Resources Defense Council (NRDC) argues the payments are little more than subsidies for coal plants but do not provide job training or programmes aimed at offsetting declining property tax once the plants close. In May last year a report for NRDC and the Sierra Club found that subsidies were not required and that renewables and gas generation could reliably substitute for the plants and improve public health. (St Louis Post-Dispatch)

Indian regulator approves bailout for Adani’s Mundra plant: The Indian Government’s Central Electricity Regulatory Commission has approved an increased tariff for a 2000 MW supplemental power purchase agreement between Adani Power and the Gujarat Government’s electricity provider, Gujarat Urja Vikas Nigam. Adani has lobbied for the increased tariff ever since its 4620 MW Mundra plant began incurring heavy losses after the Indonesian Government insisted in 2010 that exported coal could only be sold at or above a price benchmarked against the prevailing global price. In 2008, Adani won a competitive tender for the plant but failed to anticipate that Indonesia would regulate the export price. The decision may also lead to increased prices being paid to Tata Power for its 4000 MW Mundra plant and Essar’s 1200 MW Salaya plant, both of which are in Gujarat. (Livemint, Business Today)


Digging Deeper: Can the IFC’s Green Equity Strategy Help End Indonesia’s Dirty Coal Mines?, Inclusive Development International and others, April 2019. (Pdf)

This 20-page report reveals that the World Bank’s private lending arm, the International Finance Corporation, has lent hundreds of millions of dollars to Indonesian coal companies since 2013.

Time to pick up the pace: key elements and recommendations: insights into the draft National Energy and Climate Plans, Climate Action Network Europe, April 2019. (Pdf)

This 37-page report finds the draft energy and climate plans submitted to the European Commission do not cut sufficient coal and other fossil fuel emissions to meet the Paris Agreement targets.