The Adani crisis - is Modi’s house of cards at risk?
The crisis engulfing Adani after the damning Hindenburg Research raises significant questions about the future of the crony capitalism that has flourished under Prime Minister Narendra Modi, writes Adam Tooze in Chartbook.
Widespread calls for probe into Hindenburg allegations of fraud, manipulation
Opposition political parties have called on Indian regulatory authorities to pursue the issues raised about the Adani Group in the Hindenburg Research report, writes a special correspondent for Adani Watch.
HSBC joins major miners in turning away from further metallurgical coal mine development
HSBC Bank will no longer provide finance for new metallurgical coal mines, with more banks likely to follow, as has already happened with thermal coal, writes Simon Nicholas for Institute for Energy Economics and Financial Analysis.
Indonesia’s US$20 billion ‘just transition’ deal is no ‘silver bullet’ for coal dependence
For Indonesia to be on track for the 1.5°C Paris Agreement goal, coal generation needs to decrease substantially by 2030. But the recent Just Energy Transition Partnership includes no specific requirements in the deal to address the under construction on-grid coal power generation, writes Dr Achmed Shahram Edianto from Ember.
US utility announces 2028 closure for Texas coal plant
CPS Energy has announced it will close the 1444 megawatt (MW) J.K. Spruce Station coal plant in San Antonio in 2028. The utility’s Board of Trustees voted to support a power strategy that includes retiring the coal-fired 566 MW unit 1 that was commissioned in 1992 and converting the 878 MW Unit 2 that was commissioned a little over a decade ago to run on gas. Materials submitted to the board of CPS Energy acknowledged that its proposed plan would exceed the emissions targets in the City of Antonio’s Climate Action and Adaptation Plan by 6 per cent by 2030 and 105 per cent by 2040. The Sierra Club welcomed the decision to close the utility’s last coal plant but said it was disappointed it plans to invest in additional gas capacity rather than targeting 100 per cent renewables. The J.K. Spruce Station is the sixth largest source of greenhouse gas emissions in Texas and its coal ash dams have been identified as polluting groundwater. (Texas Observer, Sierra Club, CPS Energy)
Report reveals European Union coal rebound amounted to little: The European Electricity Review 2023, published by Ember, a UK-based climate policy think tank, reveals coal generation in the European Union (EU) countries increased by just 1.5 per cent in 2022 compared to 2021. Across the EU, coal accounted for 16 per cent of generation in 2022, propped up by a shift away from Russian gas, reduced hydro generation due to drought and French nuclear plants being offline. The review notes that coal generation in the EU fell by six per cent over the last four months of 2022 compared to the same period in 2021. Ember reveals that nine of the 26 coal units brought back as an emergency standby were not used at all. Those units which were used added only 0.9 per cent to EU coal generation in 2022. (Energy Monitor, Ember)
US proposes end of coal ash disposal into unlined dams at six plants: The US Environmental Protection Agency (EPA) has proposed to refuse applications by power utilities operating six coal plant to dispose of coal ash into unlined dams. The EPA said the plants’ owners and operators had failed to demonstrate that the coal ash dams at the sites would meet requirements to protect groundwater. The coal plants affected have a combined coal capacity of about 11,292 MW. The EPA’s proposed refusal of the applications is open for public comments from February 8 to March 10. Environmental law group Earthjustice welcomed the EPA move as an indication the agency was prepared to reject “many of the dirty tricks that utilities are using to avoid identifying and cleaning up their groundwater contamination”. (CNN, Environmental Protection Agency, Earthjustice)
Indian ministry wants coal plants kept until 2030: India’s Ministry of Power has requested power utilities avoid retiring any coal plants before 2030 due to an expected surge in power demand. The Central Electricity Authority wrote to the ministry on January 20 requesting all plants be kept online and to “ensure availability of units after carrying out renovation and modernisation activities if required”. India has experienced a substantial increase in its peak electricity demand and, in recent years, has experienced shortages of coal supply. (Reuters)
Court report suggests Indian state may be supporting illegal coal mining: In a damning conclusion issued in late December, a retired judge appointed by the Meghalaya High Court has found that illegal coal mining in the state continues “with, possible, state participation and even encouragement.” In 2014 the National Green Tribunal ordered a ban on illegal small-scale ‘rat hole’ mining in the state, but already mined coal was allowed to be sold. Justice Katakey was appointed in early 2022 to investigate claims that illegal miners were selling newly mined coal and claiming it was from the pre-ban stockpiles. Katakey said the government of Meghalaya had told the court that 3.2 million tonnes of coal had been mined before the ban came into effect but found the real figure was 1.9 million tonnes. The mines are often located in forest reserves and caused significant damage, with residents complaining of a “coal mafia” that pay bribes to police. (NewsClick, Scroll)
Hitachi documents reveal ANC firm's success fees on Eskom contracts: Internal Hitachi emails from 2007 reveal that Hitachi Power Africa, Hitachi’s South African subsidiary, paid R1.2 million rand (about US$69,000 in current dollars) to Chancellor House, the African National Congress’s investment arm, as a “Tender support fee – Bravo.” (Bravo was the project name for what was later to be named the 4800 MW Kusile Power Station.) Hitachi Power Africa was 25 per cent owned by Chancellor House until Hitachi bought it out in 2014. From its initial 1.2 million rand (US$69,000) investment in the company, Chancellor House received 97 million rand (US$5.5 million in current dollars) from success fees on contracts for work on the Kusile and Medupi plants, dividends and the buyout of its shares in the company. The success fees were conditional on Chancellor House supporting Hitachi Power Africa “during the tender/adjudication phase of a project” with the awarding of the contract as a result of their “efforts within their reasonable sphere of influence”. In September 2015, Hitachi reached a US$19 million settlement agreement with the US Securities and Exchange Commission over charges brought under the Foreign Corrupt Practices Act. (News24 [paywall])
Major Australian mine expansion under consideration: An environmental consultant’s report on Glencore and Yancoal’s Hunter Valley Operations (HVO) Continuation coal project estimates the proposal would contribute 1.17 billion tonnes of total greenhouse gas emissions between 2030 and 2050. The companies propose to produce about 400 million tonnes of coal over the 25-year life of the project. Lock the Gate said the mine expansion would be the most polluting project in NSW since the 2015 Paris Agreement, which aims to limit global heating to 1.5 °C above pre-industrial levels. The assessment of the HVO North and HVO South mines is being undertaken concurrently, with public comment open until February 27. (Lock the Gate, Department of Planning and Environment, Department of Planning and Environment)
Report finds significant health benefits with early Polish coal phase out: A report by the Health and Environment Alliance (HEAL) estimates a phase out of Polish coal plants by 2030 would avoid about 24,000 premature deaths due to PM2.5 pollution only and save about €58 billion (US$63 billion) in health costs compared to a 2049 end date. The Polish Government will shortly release the 2040 Energy Strategy, which is likely to back a later coal phase out, a measure backed by coal sector unions. HEAL has called for any provision by the European Union of state aid for Poland to be conditional on a clear and ambitious coal phase out schedule. The Global Coal Plant Tracker notes that Poland has 44 operating coal plants with a combined capacity of 30,180 MW with an additional 100 MW unit under construction. (Health and Environment Alliance, Global Coal Plant Tracker)
Australia: Sixty farmers used vehicles to block coal seam gas exploration by Santos in the Wondoba State Conservation Area in New South Wales.
Bosnia and Herzegovina: Court annuls ruling of the State Aid Council that loan guarantees for the government-owned Elektroprivreda BiH’s Tuzla 7 coal power plant project were illegal.
China: Two coal cargoes have left Australian ports for China, the first coal exports to the country since an unofficial ban was imposed in 2020.
India: The Directorate of Enforcement has arrested four people over allegations officials imposed an illegal levy on coal production in Chhattisgarh.
India: Farmers oppose coal exploration by government-owned Neyveli Lignite Corporation near 12 villages around Veeranam Lake in Tamil Nadu.
India: Citizens protested outside the Mormugao Port Authority against the diversion of the Mhadei River over concerns it is linked to plans to expand coal imports for nearby steel plants.
South Africa: Coal exports from the Richards Bay Coal Terminal slumped to just over 50 million tonnes in 2022, a 29-year low.
US: Black Diamond LLC has agreed to plead guilty in federal court and pay US$200,000 as part of a settlement agreement over charges it falsified coal dust records.
“For years, Kepco’s business model threatened South Korea’s green transition. What we are seeing now is South Korea’s green transition threatening Kepco’s business model,”
said Joojin Kim from Solutions For Our Climate, a South Korean NGO.
Adani stocks crash after damning report by US financial analyst: A wide-ranging report by the US-based Hindenburg Research has triggered a US$71 billion collapse in the market value of the Adani group of companies. Hindenburg, a financial investment firm, alleged the Adani companies were massively overvalued, flagged financial risks with five of seven stock exchange-listed Adani entities and stated the company “has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades”. Despite the Hindenburg report Adani Enterprises succeeded in completing a US$2.5 billion sale of shares. Hindenberg disclosed that it was short-selling Adani Group US-traded bonds and other financial products traded outside India. Short-selling is a legal practice of betting on a decline in the market valuation of a company. (Bloomberg, Bloomberg)
Eskom incurs penalties on Medupi coal supply contract: South Africa’s state-owned power utility Eskom told parliament’s Standing Committee on Public Accounts that it has paid 9.7 billion rand (US$561 million) in penalties to Exxaro Resources under the terms of its coal supply contract for the 4800 MW Medupi coal plant. Eskom’s ‘take or pay’ contract with Exxaro requires it to pay penalties if it doesn’t take the minimum contracted volume for the plant. In August 2021, an explosion in the 720 MW Medupi 4 unit caused severe damage, which will not be repaired until August 2024. Eskom told the committee that by the end of Novembe 2022r, 17.6 million tonnes of coal was stockpiled at the plant, which is over a year’s supply when operating at full capacity. Stockpiled coal degrades over time and represents a spontaneous combustion risk. Eskom said it had attempted to renegotiate the contract with Exxaro, but the company rejected the request. (BNNBloomberg)
Eskom crisis drags South African economy down: South African President Cyril Ramaphosa has revealed he is considering whether Eskom’s escalating load shedding crisis meets the legal criteria that would allow him to declare it a national state of disaster and what actions would be allowed under it. South Africa has experienced 94 days in a row of rolling load shedding with electricity off for up to 10 hours a day. South Africa’s central bank has reduced its estimate of economic growth from 1.1 per cent to 0.3 per cent this year due to power outages. On a visit to South Africa, the US Secretary of the Treasury, Janet Yellen, emphasised US Government support for South Africa’s Just Energy Transition Partnership Investment Plan and the need to support workers in the coal sector and coal mining communities. (Bloomberg, All Africa)
Global steel company takes stake in green steel start-up: The global steel company ArcelorMittal has invested US$36 million in Boston Metal, a US-based green steel start-up company, and appointed an executive as one of the company’s nine directors. Boston Metal succeeded in raising US$120 million to expand its pilot plant in Boston, undertake initial design and planning work for a new steel plant and commission a metals processing plant in Brazil. Boston Metals has patented molten oxide electrolysis technology to convert iron ore to steel with renewable electricity without requiring process water or precious-metal catalysts. BHP, the world’s largest metallurgical coal producer and a major iron ore exporter, is also an investor in the company but does not have a seat on the board. (Canary Media, ArcelorMittal, Boston Metals)
US coal plants cost more to run than to replace with renewables: A report by Energy Innovation estimates that only one of the 210 US coal plants online in 2021 was cheaper to operate than new wind or solar capacity. The Coal Cost Crossover report estimates the average marginal cost of the 220,000 MW of coal capacity reviewed was US$36 per megawatt-hour (MWh) compared to US$24 per MWh for new solar capacity. The study found that, after allowing for incentives for renewables in the Inflation Reduction Act, 199 of the 210 coal plants are more expensive compared to local solar resources sited within 45 kilometres of the plant. New local wind generation was more cost-effective than the operating costs of 104 coal plants. The report also notes that replacing coal capacity with local renewables could use current grid interconnections and help solve the long waiting times for grid access for new projects. The authors estimate replacing existing coal plants with local wind and solar capacity would save enough to invest in about 150 gigawatts of four-hour battery storage. (Guardian, Energy Innovation)
Indonesian agency tips increase in coal production and exports: Indonesia’s Ministry of Energy and Mineral Resources is forecasting coal production will increase to 695 million tonnes in 2023 up from 687 million tonnes in 2022. The ministry estimates coal exports will increase to 518 million tonnes in 2023, up from 494 million tonnesin 2022. The agency forecasts domestic coal demand will decline by nine per cent to 177 million tonnes in 2023 with the Minister for Energy and Mineral Resources, Arifin Tasrif, attributing the decline to “efficiency programs” to reduce emissions. The government-owned power utility PLN is promoting the use of biomass in coal plants to reduce emissions, but environmental NGOs argue this will drive deforestation. Indonesia is the world’s largest exporter of thermal coal, with volumes sold to India, South Korea, Taiwan, and the Philippines increasing in 2022. Sales to China, Indonesia’s biggest market, declined last year. (Jakarta Post, Reuters)
South Korean construction company pursues ammonia projects: The privately-owned power utility Quezon Power has entered into an agreement with the South Korean construction company Doosan Enerbility and the independent Thai power utility EGCO Group to trial co-firing the 960 MW Quezon coal plant with ammonia. In December, Doosan Enerbility announced that it had agreed with Vietnam’s Institute of Energy and the Korea Electronics Technology Institute to promote ammonia co-firing at power plants in Vietnam to reduce greenhouse gas emissions. Last year Bloomberg New Energy Finance (BNEF) found that it would require a carbon tax of US$300 per tonne to make co-firing with 20 per cent ammonia viable at Japanese coal plants. While burning ammonia reduces carbon dioxide emissions, BNEF noted it creates nitrous oxide with a global warming potential 273 times greater than carbon dioxide over a 100-year timescale. (Manila Bulletin, Doosan, Bloomberg New Energy Finance)