Adani rout triggers investigations by regulators: Three weeks after the release of the Hindenburg Research report on Adani, the financial and political fallout continues to grow. To date, more than US$100 billion has been wiped off the share market value of Adani Group companies. Adani Enterprises Ltd, the group’s flagship company, cancelled its US$2.5 billion share offering the day after it announced it was oversubscribed. Credit Suisse, Standard Chartered and Citigroup have announced restrictions on Adani bonds and securities. S&P Global Ratings has downgraded its outlook on two Adani Group companies to negative. The Securities and Exchange Board of India and the Australian Securities and Investments Commission will investigate some of Hindenburg’s allegations. The fallout from the report has driven up the cost of capital for Adani companies and undermined the value of its bonds, with two anonymous Indian sources suggesting that the company may have to trim capital expenditures on new projects. In the Indian parliament, opposition MPs have raised the issue of the close ties between Gautam Adani and Prime Minister Narendra Modi. (Live Mint, Guardian, Stop Adani [Twitter thread], Adani Watch)

German coal exit could happen before 2030 if key measures are adopted: Germany’s Federal Network Agency (BNetzA) has confirmed that all coal power plants could be retired before 2030 and security of supply maintained if critical measures in the energy transition are adopted. BNetzA said it will outline the required steps in a forthcoming report, but essential elements include the expansion of renewables, hydrogen production and new hydrogen-ready gas power plants. The agency believes an accelerated coal phase out can occur even with an increase in electricity demand from a switch from gas heating to heat pumps, a rapid uptake in electric cars and domestic hydrogen production. (Clean Energy Wire)

Communities call for role in ADB’s Indonesian transition pilot project: ResponsiBank Indonesia and WALHI (Friends of the Earth Indonesia) have called on Cirebon Electric Power (CEP) and its shareholders to be held accountable for the damage the 660 megawatt (MW) Cirebon plant has caused to local communities. The CEP consortium comprises Marubeni Corporation, Korean Midland Power Company, Samtan Company and PT Indika Energy. In November 2022, the Asian Development Bank (ADB) and Indonesian Investment Authority agreed with CEP to potentially retire the plant 10 to 15 years early with funding through the bank’s Energy Transition Mechanism (ETM). The ADB said the aim is to reduce greenhouse gas emissions by replacing the plant with clean energy and developing a “replicable model” that can be adopted elsewhere. “It is grossly unfair that [policies like] the ETM incentivise large companies but exclude the community from the conversation,” said Dwi Sawung Rukmono from WALHI. “Compensation goes to the [conglomerates]. How about accountability to the people directly affected by the operation of these coal plants: fishermen, farmers, salt farmers, who lost their livelihoods due to Cirebon 1?” (Eco-Business, Global Energy Monitor)

Protests shut down two Indian mines over impacts on communities: Protests by local communities have shut down work since December 22nd at the Jamkhani mine owned by the UK-headquartered Group and since January 3 at the Siarmal block held by Coal India’s subsidiary Mahanadi Coalfields (MCL). The trigger for the protests has been concerns over delays in compensating and resettling affected communities and honouring commitments to provide jobs. Residents have also protested against dust pollution from an MCL coal truck parking lot. The Siarmal project will displace 2427 families, but the resettlement of affected people has not been finalised. (NewsClick)

Canadian class action against rail company over deadly fire: A British Columbia Supreme Court hearing on an application to certify a class action lawsuit has been told a devastating wildfire originated from a Canadian Pacific Railway coal train. The fire on June 30, 2021 resulted in the deaths of two people, injured others and destroyed most of the houses in the village of Lytton. Jordan Spinks, a member of the Kanaka Bar Indian Band and one of the two applicants filing the claim, alleges he saw the flames on Canadian National’s right of way near its railway bridge over the Fraser River. The temperature had soared to 49.6 degrees on the day of the fire. The rail companies point to a report by the Transportation Safety Board of Canada (TSBC) that found no link between the train on the line and the fire. Lawyers for Spinks and Christopher O’Connor, who lost his home in the fire, argue the TSBC investigation is of limited value as witnesses had not been interviewed. (Vancouver Sun)

Utility dark money in focus at Ohio racketeering trial: A Federal Bureau of Investigations (FBI) inquiry into FirstEnergy’s US$61 million Ohio coal and nuclear bailout scandal was triggered by former Ohio Republican Speaker Larry Householder texting Republican MP, Dave Greenspan, requesting he delete all earlier texts on the proposed bailout bill. When Householder sent the text, Greenspan was with FBI Agent Blane Wetzel. Householder and Matt Borges, a former Ohio Republican Party Chairman who worked as a lobbyist for FirstEnergy, face federal racketeering charges. The court was shown texts from Borges in which he relayed that Ohio Attorney-General Dave Yost didn’t like the bill, which sought to provide US$1.3 billion in subsidies for two coal and two nuclear plants. But text messages between Borges and lobbyist Juan Cespedes, who has pled guilty and will testify in the trial, claimed Yost didn’t oppose the bill because of support he had received from FirstEnergy and Borges’s involvement in his 2018 election campaign. Yost had received US$24,000 from FirstEnergy and Borges for his campaign. Yost will be a witness in the trial. The court was told that Borges gave a US$15,000 cheque to Tyler Fehrman, his friend, for inside information on the campaign to repeal the legislation. The FBI alleges private investigators working for FirstEnergy’s campaign placed tracking devices on the vehicles of people campaigning to repeal the bailout bill. (Ohio Capital Journal, Ohio Capital Journal, Cleveland.com)

US Senator presses for coal research that would benefit family company: At a Senate Energy and Natural Resources Committee hearing, Democratic Party  Senator Joe Manchin asked Deputy Energy Secretary David Turk why more federal funds aren’t being spent investigating ways to commercialise new uses for coal waste. In 2021 Manchin received over US$500,000 from a company he founded, Enersystems, that supplies waste coal to the only plant in West Virginia that burns the low-grade material. Manchin’s interest is held in a blind trust with the company operated by his son. Manchin defended his advocacy saying the company cleaned up waste and reduced acid mine drainage. “I mean, I live in coal country, so if you don’t work in coal country, you don’t work in West Virginia, usually. I can tell you, 50 out of 55 counties — it’s just our way of life, OK?” Manchin said. (ClimateWire)

Australia: South African coal company Thungela Resources has agreed to buy 85 per cent of the Ensham coal mine for A$340m (US$240m) from Idemitsu Resources. The mine produced 3.2 million tonnes of thermal coal in 2022.

Botswana: UK-listed Kibo Energy has told shareholders it is struggling to find buyers for its coal mining project in Botswana as funding for new coal mines “is not readily available, especially for thermal coal deposits”. Kibo Energy also has interests in coal power projects in Tanzania and Mozambique.

Germany: EnBW has reported that parts of the flue gas ducts on its 778 MW Heilbronn plant collapsed, causing “major damage”.  It is unclear how long repairs will take.

Mongolia: Mongolian Railway aims to export 5 million tonnes of coal through the Tavantolgoi-Zunbayan railway and 2.8 million tonnes through Tavantolgoi- Gashuunsukhait railway in 2023. Two new rail crossings into China are scheduled to be commissioned in July.

Pakistan: The 1320 MW lignite-fired Thar Coal Block-I plant has been commissioned. The plant was built with finance as part of the China-Pakistan Economic Corridor.

Russia: Russian Railways plans to open the Port of Lavna coal terminal near Murmansk in December 2023. The terminal will have a capacity of 18 million tonnes per annum of coal.

US: Georgia Power is being sued for damages and wrongful death over pollution of a water well by coal ash at the Robert W. Scherer Electric Generating Plant.

US: North Dakota Industrial Commission has allocated US$1 million for a potential legal challenge to Minnesota’s law mandating 100 per cent carbon-free power by 2040.

Adaro’s pitch for funding for Indonesian smelter and coal plant flounders: The major Indonesian coal mining company Adaro is struggling to win backing from major banks for its plan to borrow US$1.1 billion for an aluminium smelter in North Kalimantan province. The project, which Adaro is seeking to develop with the Chinese investment group Legend Holdings, is proposed to be powered by a 2200 MW coal plant. Two major banks that have previously funded Adaro, DBS and Standard Chartered, said they are not involved with the project. An anonymous executive at another financial institution said Adaro’s project was not eligible for funding because it had committed to ending support for coal businesses. The company is also reportedly seeking financing from BNP Paribas, ING and Commerzbank. Adaro has an offtake agreement with Hyundai to supply aluminium electric vehicle production from the proposed smelter. (Financial Times)

US professor says Adani flagship’s share price overvalued by 40 per cent: Aswath Damodaran, who teaches corporate finance and valuation at New York University, estimates shares in Adani Enterprises, the flagship company of Adani Group, are still overvalued by about 40 per cent despite the recent crash in their value. Damodaran, who wrote in his blog that he was previously ignorant about Adani, said he calculated Adani Enterprises as being worth 945 rupees per share before allowing for the Hindenburg Research allegations. The company’s shares are trading at just over 1800 rupees per share. While sceptical of some of the claims in the Hindenburg Research report, Damodaran wrote that he would be wary of investing in Adani companies even if the share price declined further because, as a family group company built around political connections, it and similar companies “are one political election loss away [from losing] your biggest competitive advantage”. (Bloomberg, Aswath Damodaran)

Bangladesh alarmed at high coal cost for Adani’s Godda plant: The Bangladesh Power Development Board (BPDB) wants to renegotiate the power purchase agreement (PPA) entered into in November 2017 with Adani Power to import power from the new 1600 MW Godda coal plant in Jharkhand, India. An official anonymously said that Adani Power’s request for approval of coal at US$400 per tonne was “excessive” when the board was paying US$250 or less per tonne for coal for its other power plants.  Adani plans to import coal from its Carmichael coal mine in Queensland. Bangladesh’s Minister for Power, Energy and Mineral Resources, Nasrul Hamid, said there is no scope for Adani to manipulate the coal price and that it would not be different to the cost of coal for the new Payra plant. Adani Power confirmed that it had received a request from Bangladesh for “a discount on the energy charge” but stated that “no PPA amendment is under consideration”. (Reuters, Daily Star, Adani Power, MoneyControl)

Australia’s newest coal plant slated to retire before it turns 20: In a review of potential future West Australian gas demand, the Australian Energy Market Operator (AEMO) assumes the retirement of the 466 MW Bluewaters coal power station in October 2029, which would mark the end of coal generation in the state. The plant was commissioned in 2009 and is owned by a consortium of Kansai Electric Power (KEPCO) and Sumitomo Corporation. Griffin Coal’s Ewington mine supplies the plant, but the future of the mine is uncertain after the company entered receivership with an estimated A$1.44 billion in debts. The state government has given the mine a financial lifeline, but key industrial customers have switched to importing coal to meet their demand. In one scenario driving high gas demand, AEMO considers the option of the Bluewaters plant closing in mid-2023. The state-owned power utility Synergy announced in June 2022 that it would close the 340 MW Collie A coal unit in 2027 and Units 7 and 8 at the Muja coal plant in October 2029. The two coal plants account for about 80 per cent of the coal produced by Premier Coal’s mine in Collie. (ABC News, Australian Energy Market Operator [Pdf])

Japanese utilities look to cut costs by using lower-grade coal: Hit by surging imported thermal coal costs in 2022, some Japanese power utilities are seeking to utilise cheaper lower-grade coal. The country’s largest power utility, JERA, has modified some power plants to utilise cheaper coal. Japan imported about 136 million tonnes of thermal coal in 2022, with almost three-quarters coming from Australia. While coal costs have recently declined as the northern hemisphere heating season wanes, Japanese utilities are looking to diversify sources as the government has sought to phase out imports of Russian coal. There is also uncertainty over export prices as China eases its unofficial ban on importing Australian coal. However, Japan has limited alternatives beyond Indonesia, the largest supplier of lower-quality coal. South African exports have been hit by rail and port constraints, and Colombian coal exports into the Asian market are restricted by ship limits on the Panama Canal and the higher cost of shipping around Cape Horn. (Reuters)

JSE executive touts “creative” options for funding South African coal: The Minerals Council South Africa told attendees at the Southern African Coal Conference that it was increasingly hard for coal projects, especially thermal coal, to obtain financing. However, Patrycia Kula-Verster, an executive with the Johannesburg Stock Exchange, avenues may be available for coal companies. She suggested companies may be able to access private capital and even green and sustainable investment funds. “You can really get creative with these instruments,” she said. An executive with the South African Government’s Industrial Development Corporation (IDC), Thabiso Sekano, told the audience that “we’re among the few financial institutions in South Africa that still look at coal favourably.” (Mining Weekly)

Getting Politics out of Utility Bills, Energy and Policy Institute, January 2023. (Pdf)

This 55-page report outlines how US regulators should adopt tighter rules to block utilities using ratepayer money for political activities, require mandatory disclosure of political spending and establish enforcement regimes and penalties for rule-breakers.