Editor's Note
A new report maps out precisely how Indonesia could phase out its fleet of coal plants by 2045 with international financial support for a far lower cost than the combined price of subsidies for coal plants and the toll on public health. In the US, the fate of the deal struck between Democrats leader in the Senate, Chuck Schumer, and conservative West Virginia Senator Joe Manchin hangs in the balance as another key Democratic senator decides whether to support it, push for amendments or oppose it outright. As it stands, measures to expand renewables generation will increase pressure on coal plants. Not surprisingly, Manchin has insisted on significant funding for carbon capture and storage (CCS), long touted as a climate solution by coal mining companies. A new report finds that after allowing for methane emissions from coal mining, a proposed US CCS project’s level of projected emissions captured by the plant is vastly overstated.
A new report by the International Energy Agency suggests a modest increase in global coal demand this year, with 2023 at a similar level. However, estimates of global coal consumption hinge on Chinese demand and the government’s response to a slowing construction sector. Meanwhile, Glencore, the world’s largest thermal coal exporter, has settled an annual contract with a major Japanese customer for thermal coal at US$375 per tonne, well over double the cost per tonne of a year ago. The surge in coal prices has hit some utilities hard. This week, a Philippines utility unveiled its pitch for a significant increase in payments under its 2019 power purchase agreement when they assumed coal prices would remain comparatively low. How much the current high coal prices will affect long-term decisions of coal importing utilities and countries remains to be seen. In this context, a new paper on the likely pattern of a peak and a decline in fossil fuel use makes for interesting reading.
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For residents of Jakarta’s port district, coal is the neighbour no one wants
Despite the Indonesian Government lifting the COVID mask mandate, for students at the Marunda State Primary School in Jakarta’s northern port district, masks continue to be worn because of dust pollution from a nearby coal terminal, writes Fadiyah Alaidrus in Mongabay.
China’s carbon dioxide emissions see the longest sustained drop in a decade
China’s carbon dioxide emissions have now fallen for three quarters in a row due to a mix of the growth in clean energy, reduced activity in the construction sector and new COVID-19 restrictions, writes Lauri Myllyvirta from the Centre for Research on Energy and Clean Air in Carbon Brief.
Why Japan is pushing CCS in Southeast Asia
Many analysts and civil society groups are sceptical about Japan’s push for CCS as a strategy to cut emissions from Southeast Asia’s power sector, writes Nithin Coca in Energy Monitor.
What we learned about coal phase-out by studying 15 countries
A team of researchers suggest the shift away from coal power is often slowed by lobbying by powerful interest groups and public demand for what is perceived as a source of cheap energy and jobs, write Michael Jakob and Jan C. Steckel in Carbon Brief.
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US Democratic leader negotiates compromise climate bill: The Democratic leader in the Senate, Chuck Schumer, and conservative West Virginia Democrat Senator Joe Manchin have proposed a bill that would include US$369 billion in energy and climate change funding. The Inflation Reduction Act bill provides tax incentives for renewable energy projects, energy efficiency measures and clean energy manufacturing. It also includes incentives for CCS projects. A controversial provision ties support for renewables projects on federal land to the government auctioning off 2 million acres (809,000 hectares) of public land and 60 million acres (24 million hectares) offshore each year for the next decade for oil and gas projects. Many large NGOs support the bill, while others have decried the sweeteners for the oil and gas industry. While Manchin is backing the bill, Arizona Senator Kyrsten Sinema has not yet indicated whether she will support it. The Rhodium Group estimates the package could result in US greenhouse gas emissions declining by 31–44 per cent below 2005 levels compared to the 24–35 per cent reductions likely to be cut under current policies. (Guardian, Bloomberg, Senate Majority Leader Chuck Schumer and Senator Joe Manchin, Sierra, Center for Biological Diversity)
US EPA eyes options for coal plant regulations: The Administrator of the US Environmental Protection Agency, Michael Regan, said new measures to more strictly regulate US coal power plants are likely next year despite a recent Supreme Court decision. Regan said measures such as new requirements governing the management of coal ash dams and changes to the National Ambient Air Quality Standards for ozone would affect decisions by utility owners on the retirement of coal plants. During the 2020 presidential campaign, Biden promised to cut US power sector emissions by 2035. According to the Global Coal Plant Tracker, the US currently has 225 coal plants operating with a combined capacity of 217,894 megawatts (MW). (Reuters)
Indian state opposes new coal mines in Hasdeo Aranya forests: The State Parliament of Chhattisgarh has unanimously supported a resolution by an opposition MP calling on the national government to cancel the allocation of coal blocks in the Hasdeo Aranya forests. Coal mining proposed in six areas – Parsa, Parsa East Kete Basan (PEKB), PEKB Extension, Gidhmuri Paturia, Madanpur South and Chotia – has been vehemently opposed by tribal communities and civil society groups. The state government, which has previously granted permission for the allocation of land for the Parsa and PEKB Extension mines, supported the resolution and sought to blame the central government for coal allocations. Chhattisgarh Bachao Andolan, a tribal rights group, said the state government should urgently withdraw the final environmental clearance to the Parsa and PEKB Extension coal blocks. (Down to Earth)
Indian court convicts former Secretary of Coal: A Delhi Court has convicted the former Secretary of the Ministry of Coal, H C Gupta and the former Ministry of Coal Joint Secretary, KS Kropha, of criminal conspiracy, criminal breach of trust, cheating, and corruption in the allocation of the Lohara East coal block in Maharashtra to Grace Industries. The court also convicted Grace Industries and its Director Mukesh Gupta on criminal conspiracy and cheating charges. The court will determine the sentences at a hearing on August 4. H.C Gupta has previously been convicted on charges relating to the allocation of three other coal blocks but is currently on bail pending a High Court hearing of his appeals. The Central Bureau of Investigations alleged the company had exaggerated the capacity of its steel plant and submitted false information supporting its bid for the coal block. (Economic Times)
Former Indonesian regent arrested over 2011 coal licence transfer: Indonesia’s Corruption Eradication Commission (KPK) has arrested Mardani Maming, a former regent In South Kalimantan and now head of the Indonesian Young Entrepreneurs Association, over the alleged transfer of a coal mining permit in 2011. The KPK alleges that after Maming was elected Regent of Tanah Bumbu in 2010, he approved the transfer of a 370-hectare coal mining permit in Angsana district from one company to PT Prolindo Cipta Nusantara, which coal baron Henry Soetio owned. The KPK alleges Mardani received 104.3 billion rupiah (US$7.04 million) as a bribe for transferring the licence. The KPK said they would hold Mardani for up to 20 days for questioning. (Jakarta Post)
Secrecy shrouds Adani’s dealings with Queensland water utility: SunWater, a Queensland Government water utility, has refused to disclose any details of 96 documents related to contact with Adani between June 2021 and February 2022. The Sunrise Project requested the documents to shed light on Adani’s plans to gain access to billions of litres of water after a May 2021 federal court ruling that the federal government had failed to assess the potential impacts of Adani’s plan to pump 12.5 billion litres of water a year from the Suttor River for its Carmichael coal mine. The W&J Nagana Yarrbayn Cultural Custodians, the traditional owners of the land the mine is being built on, called on the Queensland Government to disclose the details of the secret water supply agreement between SunWater and Adani. (Guardian, W&J Nagana Yarrbayn Cultural Custodians)
Ten mine expansions approved without environmental assessment: Ten mine expansions in India have been approved without environmental assessment after the Ministry of Environment, Forest and Climate Change (MoEFCC) agreed to a Ministry of Coal request to lift the assessment-free threshold from 40 per cent to 50 per cent of mine production capacity. In May, MoEFCC issued a memorandum stating the exemption from assessment would apply only to projects where the expansion did not require the lease area’s extension or additional land acquisition. The ten projects in Chhattisgarh, Maharashtra, Orissa, Madhya Pradesh and Uttar Pradesh have a combined capacity of 9.65 million tonnes a year. (Odisha Diary)
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Australia: Minister for Environment urged to assess water impact of Engie’s plan to flood the closed Hazelwood mine.
Bangladesh: Mining at the Barapukuria coal mine has been suspended for 15 days after a wave of COVID-19 cases spread through the mining workforce.
Germany: KSBG has announced plans to sell Steag, Germany’s fifth largest utility, which has over 4000 MW of coal plant capacity.
India: Five state-owned utilities, including Coal India and Neyveli Lignite Corporation, propose the establishment of five coal gasification plants.
Malaysia: State-owned Tenaga Nasional is considering the retirement of the 1600 MW Kepar plant a year earlier than its slated 2029 closure.
South Africa: Judicial review sought of the Department of Mineral Resources and Energy’s decision to approve a new coal mine in Limpopo province proposed by Lephalale Coal Mines.
Thailand: The state-owned company PTT has sold its subsidiary, which owns three coal mines in Indonesia, to PT Astrindo Nusantara Infrastruktur for US$471 million.
UK: ClientEarth warns EMR Capital Advisors, the Australian backer of the proposed Whitehaven coal mine, may breach its fiduciary duties. EMR declined to comment.
US: Last shipment of coal received in Hawaii for AES’s 203 MW West Oahu plant.
US: FirstEnergy acknowledges receiving a further subpoena from US Securities and Exchange Commission over the US$61 million Ohio House Bill 6 coal and nuclear power corruption scandal.
US: Five environmental groups have launched legal action alleging that Arch Coal’s West Elk mine in Colorado has been operating without required state and federal emissions permits since September 2021.
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Report outlines coal phase-out pathway for Indonesia: A study by the Institute for Essential Services Reform, an NGO, estimates Indonesia can phase out its fleet of 72 coal plants by 2045 and realise significant benefits. However, it will require international financial support to implement a transition consistent with the Paris Agreement. The study estimates the avoided subsidies for coal power plants and health costs are two to three times larger than the costs of decommissioning plants, supporting a just transition and lost state revenue. The report sets out a plant-by-plant decommissioning schedule, including 12 coal plants with a combined capacity of 5000 MW which can be retired between 2022 and 2023. The report estimates that in achieving a coal phase-out by 2045, Indonesian coal generation will decrease by 11 per cent by 2030 compared to 2021 and by over 90 per cent by 2040. (Institute for Essential Services Reform [Pdf])
International Energy Agency tips coal demand to plateau in 2023: The International Energy Agency (IEA) estimates global coal demand may increase by 0.7 per cent in 2022 to about 8 billion tonnes if the Chinese economy rebounds in the year’s second half. The IEA estimates thermal coal demand may increase by one per cent, driven by increased demand in India and gas-to-coal switching in Europe in response to the invasion of Ukraine. While European coal consumption may increase by about seven per cent in 2022, it accounts for only five per cent of global consumption. The IEA estimates that Indian demand for coal increased by seven per cent in the first half of 2022, with Chinese consumption declining by three per cent. Indian imports may increase in the second half of the year but the IEA expects increased Chinese domestic production will cut its imports by about 18 per cent or 45 million tonnes. The agency estimates global coal demand in 2023 will likely remain on a par with 2022. (International Energy Agency)
South African coal industry ‘delusional’ says climate adviser: The executive director of South Africa’s Presidential Commission on Climate Change, Crispian Olver, described the country’s coal industry as “delusional” and said he was “really struggling to get a sober conversation with the industry” over the need for a just transition. Olver said the commission’s view was that demand for coal would “drop off radically in the 2030s and particularly after 2035”, told a conference where he shared a panel with Seriti Resources and Menar Resources. “It’s going to be impossible to have a conversation with the industry if we can’t get past the basic denialism,” Olver said. (Reuters)
West Virginia enacts ban on banks restricting coal lending: West Virginia State Treasurer Riley Moore has announced five major financial institutions – BlackRock, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – have been excluded from new state banking contracts because of policy restrictions on coal financing. US Bank was initially identified as another bank to be banned but persuaded Moore that it had “eliminated” policy restrictions on coal mining and coal power generation, which were originally included in its Environmental and Social Risk Policy. In March, the West Virginian legislature adopted a bill establishing a Restricted Financial Institution List which disqualifies any named financial institution from state banking contracts. Similar bills have been proposed by Republican legislators in a dozen other states. (BankingDive, West Virginia Treasury)
CCS capture rates exaggerated if mine methane emissions counted: Enchant Energy is seeking up to US$1 billion from the US Department of Energy for a CCS project it claims will capture 90 per cent of greenhouse gas emissions from the 924 MW San Juan Generating Station in New Mexico. However, an Institute for Energy Economics and Financial Analysis (IEEFA) report says Enchant Energy’s project would only capture 68 per cent of greenhouse gas emissions after allowing for coal mine methane pollution. If the plant was designed to capture only 65 per cent of carbon dioxide emissions, IEEFA estimates the effective capture rate would be only 49 per cent of emissions. (Institute for Energy Economics & Financial Analysis)
Japanese utility and Glencore settle on thermal coal contract price: Glencore has concluded a contract to supply Nippon Steel with thermal coal through to March 2023 at US$375 per tonne. In 2021 Japan imported an estimated 141 million tonnes of thermal coal, with about two-thirds coming from Australia. The result of annual thermal coal contract negotiations between Glencore, the world’s largest thermal coal exporter and a major Japanese utility and industrial customer, is viewed as a benchmark for other Japanese importers. Industry insiders said the deal, which Glencore and Nippon Steel declined to comment on, was three times more expensive than similar contracts entered into last year. (Bloomberg)
Philippines utility seeks power price rise to offset coal costs: SMC Global Power said it is seeking Energy Regulatory Commission approval to renegotiate its 2019 power supply agreement with Meralco to supply 330 MW of capacity from the Sual coal plant. SMC said it wants to increase the price from 4.3 pesos (US 7.8 cents) per kilowatt hour (kWh) to 8.3 pesos (US 15 cents) per kWh for six months. SMC said the increase would allow it to cover losses incurred from January to May 2022 when the price of thermal coal imports surged. In 2009, GMC entered into a 25-year build-operate-transfer agreement on the plant, which is due to expire in October 2024. The plant is owned by a Marubeni Corporation and Tokyo Electric Power Corporation joint venture. Ramon S. Ang, the President and CEO of SMC Global Power, said the cost of coal was US$60–64 per tonne when it entered into the 2019 power supply agreement but now costs over US$400 per tonne. (Inquirer)
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Global Coal Mine Tracker, Global Energy Monitor, July 2022.
The Global Coal Mine Tracker now includes 3670 coal mines and proposed projects with over one million tonnes of capacity. The comprehensive data now includes estimates of methane emissions for each project.
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