June 7, 2018
Issue 232  |  View Past Issues
CoalWire

Editor's Note

Six years ago port operators at the world’s largest coal export terminal in Newcastle, Australia argued they needed approval for the T4 terminal with a capacity for another 120 million tonnes a year. In the last week they axed the project, conceding global demand had fallen. In Japan, Sumitomo has dropped its plan to use coal as a fuel in a small plant it proposed.

Elsewhere, in some of the few countries with plans for many new coal plants there are signs of a shift too. In Turkey a public opinion poll has revealed overwhelming support for clean energy and negligible support for coal. In Vietnam, a new report has charted how 30,000 megawatts (MW) of new plants proposed to be built by 2030 could be scrapped and electricity demand growth still met. In Indonesia, a privately owned power producer has complained of how hard it is becoming to finance coal plants. This coincides with Indonesia’s publicly owned utility PLN seeking to raise funds for new coal projects.

There are other big developments affecting coal power too. The Chinese Government has announced a freeze on new utility-scale solar farms which is likely to see solar installations there fall to less than half of last year’s 53,000 MW new capacity. The upside is that solar panel prices could fall by almost half by the end of 2019, driving new solar installations in the Asian region where most of the remaining new coal power capacity has been proposed. In India, the Minister for Power has flagged the country is on track to reach 225,000 MW of renewable capacity by 2022, 50,000 MW higher than its current target.

Bob Burton

Features

Against its own national interest, Japan outdoes Trump in promoting coal

With less fanfare than US President Donald Trump, Japan has become the biggest G7 promoter and funder of coal and other fossil fuel projects despite the obvious long-term national benefits of pursuing renewables, writes Tim Buckley in Asia Times.

Losses make Indonesia’s public power utility a high-risk bet

Indonesia’s state electricity company PLN, hit by growing financial losses and the shift of global investors away from coal plants, may have a hard time raising funds for new coal infrastructure, writes Elrika Hamdi, an energy analyst with the Institute for Energy Economics & Financial Analysis.

Why the scrapping of the T4 coal loader is good news for the NSW Hunter Valley

The announcement that the T4 coal loader in Newcastle will not proceed is a great outcome for the people in New South Wales Hunter Valley, writes Glen Klatovsky, the Deputy CEO of 350.org Australia, in the Newcastle Herald.

Campaigns

Australian coal export terminal proposal scrapped

Following a six-year community campaign, Port Waratah Coal Services (PWCS) has abandoned its plan to build the A$5 billion (US$3.8 billion) T4 coal export terminal in Newcastle. The project, which was initially proposed to export 120 million tonnes of coal per annum (Mtpa) and was approved in September 2015 at a reduced 70 Mtpa, was undermined by falling global demand. The project was opposed by residents and environmentalists due to concerns about coal dust pollution, residential amenity and environmental impacts. The PWCS lease on the land was due to run until 2020 but the company decided it would save A$100 million by scrapping the terminal now. “I think most community members and most community groups in Newcastle will see this as a huge win and a very positive thing for the future of Newcastle,” said Environment Justice Australia spokesman James Whelan. (ABC, Guardian)

Sumitomo scraps coal-fired plant planned for Japan

Sumitomo has announced that it has dropped its plan to use coal to co-fire its proposed 11.2 MW coal-biomass plant proposed in Sendai. Instead, Sumitomo has announced it plans to proceed with the plant as a purely biomass-fuelled plant. While the announcement that coal will no longer be used has been welcomed by environment groups, concern remains about the pollution impacts of the project and the sourcing of biomass. In April Shikoku Electric Power Company announced it was withdrawing from the joint venture for the Sendai-Takamatsu Power Plant project. With the cancellation of the use of coal there are now 35 proposed new coal units in Japan. (Kikonet)

Top News

Turkish poll finds strong support for renewables over coal: While Turkey’s President Recep Erdogan has strongly promoted new coal power plants, only 5.2 per cent of 2595 residents surveyed preferred coal power compared to 70 per cent support for solar and 52.8 per cent support for wind generation. Of those surveyed 53.1 per cent opposed the construction of coal plants near them. January 2018 data from the Global Coal Plant Tracker indicates Turkey has 51 proposed coal units with a combined capacity of 41,760 MW, the world’s third largest potential coal plant pipeline. The first round of elections for Turkey’s general assembly and the President will be held on June 24. (Climate Change News, Global Coal Plant Tracker,  IklimHaber)

Californian council to appeal ruling on port ban: Oakland City Council has voted unanimously to appeal against a federal court decision to overturn a ban on coal being exported through a proposed terminal. The judge ruled the ban breached the agreement the council had with Phil Tagami’s company to implement his port development proposal. However, the Mayor of Oakland City Council, Libby Schaaf, said the appeal was necessary to protect the well-being of residents. (The Mercury News)

Study finds high mercury levels near Indian power plants: A study of a 300 square kilometre area of the Singrauli region by the All India Institute of Ayurveda, a government health research agency, has found high mercury levels in the hair and nails of villagers as well as in soil and plants. The Singrauli region of Uttar Pradesh and Madhya Pradesh states hosts 22,000 MW of coal plants and was declared a critically polluted area in 2009. Following the release of the report 900 people met in Singrauli and called for a moratorium on new coal plants and the implementation of previously agreed pollution control measures. (The Tribune)

Slovenian police raise further queries about coal plant expansion: Leaked details of a Slovenian police investigation into Alstom’s €1.4 billion (US$1.6 billion) 600 MW expansion of the Sostanj plant found that it was €500 million (US$586 million) more expensive than equivalent plants the company built elsewhere. The expansion was originally estimated to cost €700 million (US$820 million) and was commissioned in 2015. In October 2014 Slovenian police charged 10 people associated with the project of defrauding electricity consumers of an estimated €284 million (US$333 million). A Slovenian TV station alleges that documents obtained as part of the investigation indicate Alstom allocated €3 million (US$3.5 million) for kickbacks associated with the project. (STA, Total Slovenian News)

Sri Lankan coal plant flouts environmental standards, report warns: A new report by the Coalition Against Coal has found the existing 900 MW Chinese-built Lakvijaya coal power plant in Norocholai lacks an environmental management licence, a waste management licence, approval for a recent expansion of a coal yard or authorisation for the drilling of water bores. The report also found that sensors for environmental monitoring have not been properly calibrated, that there have been repeated breakdowns of the flue gas desulphurisation units and the plant has no mercury control system. (Sunday Times)

Queensland Government considers road subsidy for Adani: Documents obtained under Right to Information legislation have revealed the Queensland Government is considering providing up to A$100 million (US$76 million) to upgrade the access road for Adani's proposed Carmichael coal mine.  Before the November 2017 state election, Premier Annastacia Palaszczuk promised there would be no taxpayer funding for the project. (ABC News)

Investors urge G7 to embrace coal phase-out: Over 300 investors, representing more than US$28 trillion in assets, have called for the G7 countries to support policies to achieve the goals of the Paris Agreement including the phasing out of thermal coal power “worldwide by set deadlines” and the removal of fossil fuel subsidies. The investors also called on governments to “support a just transition to a low carbon economy.”(2018 Global Investor Statement to Governments on Climate Change)

Amidst protests, Kenyan Government halves Lamu plant and stalls renewables: On World Environment Day hundreds of people took to the streets to protest against the plan by the Kenyan Government to build the 1,050 MW Lamu coal plant. While the project was initially planned to comprise three 350 MW units, the Energy Regulatory Commission (ERC) has directed the size of the units be reduced to 150–200 MW to avoid the risk of overcapacity. The ERC’s Director of Economic Regulation, Frederick Nyang, acknowledged that local and international investors have proposed 4000 MW of solar and wind projects, but they have been put on hold. (Daily Nation, News24)

“It is getting more difficult to find financing for coal power plants, with many Europe banks and export credit agencies ruling out coal financing, and the Japanese trailing behind,”

said Dharma Djojonegoro, the Deputy CEO of the Indonesian independent power producer PT Adaro Power, at a recent coal industry conference.

News

Australia: Magistrate dismisses charges against three NSW residents who protested against the expansion of Peabody Energy’s Wilpinjong mine.

Australia: Victorian Government extends two mining licences for brown coal plants to 2051 and 2065 respectively.

South Africa: Department tells parliamentary committee of routine violations of mine safety standards at Gupta’s Optimum coal mine.

UK: Protesters block access road for Banks Mining’s proposed Dipton mine.

US: EPA Administrator hosted at Kentucky basketball game by the owner of Alliance Resource Partners.

US: Reduced coal company payments threatens the viability of Black Lung Disability Trust Fund for former mine workers.

Zimbabwe: Export–Import Bank of China approves US$1.4 billion funding for 600 MW Hwange plant expansion.

Companies + Markets

Study outlines path for Vietnam to slash proposed coal plants: The Vietnamese NGO, Green Innovation and Development Centre, argues in a new study that the prioritisation of energy efficiency and renewables would allow Vietnam to scrap plans for 30,000 MW of coal plants proposed to be built by 2030. Under the plan Vietnam would reduce coal consumption by 70 million tonnes a year and save an estimated US$7 billion on imported fuel costs. Vietnam is due to release its Power Development Plan in early 2019. (GreenID)

India flags 50,000 MW boost to 2022 renewables target: India’s Minister for Power and New and Renewable Energy, R K Singh, said the target of having 175,000 MW of renewable energy is likely to be reached within the next two years, well ahead of the original 2022 aim. Singh indicated the government is now aiming for 225,000 MW of renewable capacity by 2022. “We have new schemes like offshore wind [and] floating solar, which will help us over-achieve the current target,” he said. (Business Standard)

Chinese cap on solar will drive panel costs down: China’s National Development and Reform Commission, the Ministry of Finance and the National Energy Administration have frozen new solar farm projects and cut tariffs paid for clean energy by between 6.7 and 9 per cent from June 1. China installed 53,000 MW of solar capacity in 2017 with one analyst estimating it could fall to 30,000 MW this year and as low as 20,000 MW in 2019. The surprise decision has resulted in plunging share value of major solar firms. However, Bloomberg New Energy Finance estimates China’s announcement is likely to result in the price of solar cells in China falling by 35 per cent this year and another 10 to 15 per cent in 2019. The dramatic price falls are likely to drive further solar installations across Asia. (South China Morning Post, Bloomberg)

Adani flags bankruptcy for Mundra plant: The lenders to Adani Power for its 4620 MW Mundra plant have reportedly withdrawn from negotiations over the proposed sale of a 51 per cent stake in the plant to Gujarat Urja Vikas Nigam (GUVNL), a state-owned power utility. Without a sale to GUVNL, which has power purchase agreements for 2000 MW from the plant, Adani Power is likely to seek bankruptcy protection. The plant, which was commissioned in 2015, ran at only 37 per cent plant load factor in the first quarter of 2018 and is unable to service its debts. Adani Mining claimed its proposed Carmichael coal mine in Australia was needed to supply the plant. (Business Standard)

South African Minister defends new coal plants: South Africa’s new Minister for Energy, Jeff Radebe, has signalled his support for the completion of the proposed private projects, the 630 MW Thabametsi and 304 MW Khanyisa coal plants, despite a new Integrated Resource Plan scheduled to be completed by late August. A coalition of environmental groups said the two plants are not needed and all authorisations for the plants will be challenged. (Mining Weekly, The Citizen)

Turkey proposes import tax on US coal: Turkish President Recep Erdogan has reportedly proposed a tax of 10 per cent on thermal coal imports from the US. However, Turkey may raise the permitted sulphur content of thermal coal to three per cent from the current one to two per cent range. In 2017 Turkey imported 33 million tonnes of coal with just over half from Colombia. The proposed increase in the sulphur limit, combined with the proposed import tax, would support continued imports of low-sulphur coal from Colombia and potentially increase demand for Russian low-sulphur coal. It may also increase sales for high-sulphur Illinois Basin coal and displace more expensive Appalachian coal. (Platts)

South Korean sulphur limits may reshape Asian coal market: The South Korean Government’s requirement for public utilities to import only coal with a sulphur content of less than 0.4 per cent over a year is likely to disproportionately disadvantage Australian exporters. Less than one-quarter of Australia’s exports meet the new standard which takes effect on July 1 to as a part of the government’s pollution reduction strategy. The new regulation may have the effect of increasing imports and prices for exporters from Russia, South Africa and some Australian exporters. However, there could be a more significant impact on Australian and Indonesian exporters if other countries emulated South Korea’s new standard requiring low-sulphur coal. (Reuters)

Trump requests subsidies plan for failing coal plants: PJM Interconnection — the operator of the power grid in 14 eastern US states and territories — has dismissed as unwarranted President Trump’s proposed intervention in the electricity market to support failing coal and nuclear plants. Trump directed the Secretary of Energy, Rick Perry, to “to prepare immediate steps to stop the loss” of financially stressed coal and nuclear plants. The announcement has been welcomed by the National Mining Association, which represents companies such as Peabody Energy and Murray Energy. The Department of Energy is considering using two federal laws to establish a “strategic electric generation reserve” and require grid operators to buy electricity from plants facing closure. (Bloomberg, PJM)

Indonesia seeks to promote underground coal gasification: Indonesia’s Minister for Energy and Mineral Resources, Ignasius Jonan, wants coal companies to develop underground lignite gasification but has ruled out subsidising projects. The Indonesian Coal Mining Association says incentives and supportive regulations would be required. Jonan told a House of Representatives committee hearing that “when it comes to permits, [companies] could even write them up themselves and let me do the signing.” Jonan’s comments indicate a softening from his recent statement that coal companies would be required to develop coal gasification projects. (Jakarta Post [paywall], Jakarta Post)

Poland approves plan for new lignite mines: The Polish Ministry of Energy has said the prospect that “lignite-fired generation capacity in Poland will totally disappear in 2040–2045” was behind the government’s decision to approve a new lignite strategy promoting the development of new mines. Lignite-fired plants account for just over 30 per cent of Poland’s electricity. The ministry argues that current mines will start being exhausted by 2030. The strategy proposes the development of the Zloczew deposit which would require a 60-kilometre-long rail connection to the 5300 MW Belchatow plant. However, according to some analysts, the costs of the project may make it unviable. (Platts)

Resources

Global Coal Power, CarbonBrief, June 2018.

 
A powerful mapping tool using CoalSwarm data of all the coal plants in the world.

Contemporary coal dynamics in Indonesia, Stockholm Energy Institute, June 2018. (Pdf)

 
This 32-page report details the social, environmental and governance problems created by the rapid expansion of coal production and the need to address the prospect that global markets will shift away from thermal coal.

A Blueprint for Vietnam's Clean Energy Future, GreenID, June 2018. (Summary here.)

 
This 52-page report outlines how Vietnam could dramatically reduce the number of new coal plants and still meet its growing need for electricity.