Editor's Note
As the economics of renewables become irresistible, the ranks of supporters of coal plants continue to thin. This week, Bangladesh’s Secretary of Power has reportedly agreed to scrap nine proposed coal plants with a combined capacity of 7461 megawatts (MW). In the US, a South Carolina utility has proposed scrapping three more coal plants by 2030, with a Mississippi utility directed to consider the closure of another. In Australia, a new report estimates a wave of new renewables capacity will result in between three and five coal plants being financially stressed by 2025. In China, the expansion of renewables continues, with some analysts hopeful that recent announcements may indicate the country’s next five year plan may be far greener than the current one.
The rapid decline in US coal generation capacity is hitting coal companies hard. Doubts are growing about the future of Arch Resources’ Black Thunder mine, once the largest in the US, which now faces the loss of a string of customers as coal plants close. In Wyoming, a bankruptcy deal between the Department of Interior and a major coal company is likely to see tens of millions of dollars due on past coal production go unpaid.
The impacts imposed by coal mines on neighbouring communities are a constant source of conflict. The Czech Republic has announced it will file legal action in the European Court of Justice over Poland’s decision to approve the expansion of a lignite mine. In Pakistan, where lignite mining is expanding to cater for new coal plants, villagers who support the power plant are facing increasing harassment from police even though they are still owed half the compensation agreed for relocating from their homes and land. In Indonesia, villagers in North Kalimantan have had their water supply cut off after a major coal slurry spill into the Malinau River occurred on February 7.
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China's energy agency rocked by coal power report
A recent critical report on the coal power failings of China’s National Energy Administration may be the prelude to an administrative shakeup to be unveiled at the annual legislative sessions in early March, writes Michael Lelyveld in Radio Free Asia.
Will Vietnam’s new energy policy mark a turning point for coal?
Experts are hoping that Vietnam will use its next power development plan to further its position as a renewables leader in Southeast Asia, and provide clarity on the role of coal in meeting the country’s rapidly rising demand for electricity, writes Michael Tatarski in China Dialogue.
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Bangladesh likely to scrap plans for nine coal plants
A meeting chaired by Bangladesh’s Secretary of Power, Habibur Rahman, has reportedly agreed to scrap nine proposed coal plants with a combined capacity of 7461 MW. The proposed 1320 MW Moheskhali, 1320 MW Ashuganj (Patuakhali) and 1200 MW Uttarbanga plants are all likely to be excluded from the government’s revised power development plan. Two further coal plants, the 700 MW plant proposed by a Singapore–Bangladesh joint venture and the 1200 MW Matarbari plant proposed by the Power Generation Company Bangladesh and Mitsui are also likely to be dropped from the plan. A further four private sector projects, which have not progressed despite being approved earlier, will also be scrapped. The decision has been driven by the poor viability of coal plants reliant on imported coal and growing public opposition to the health impacts of coal plant pollution. (Daily Sun)
More US coal plants slated for closure by 2030
Dominion Energy South Carolina has released a revised 15-year plan in which it proposes to close its three coal plants in the state by 2030 and add up to 2000 MW of solar and up to 900 MW of battery storage by 2048. Its original plan proposed keeping one coal unit operating until 2071. The original plan was challenged by the Sierra Club and rejected by the South Carolina Public Service Commission (PSC). The revised plan submitted to the PSC proposes closing the 660 MW Williams Station and the 772 MW Wateree Station by 2028 and the conversion of the 417 MW Cope Station to gas generation by 2030. All three plants are located in majority Black communities. The Sierra Club welcomed the commitment to close the polluting coal plants but described the proposed investment in a gas plant as short-sighted. The decision comes as the Mississippi Public Service Commission has ordered Mississippi Power to file a revised long-range plan to consider the potential closure of the two coal-fired units at the 1097 MW Victor J. Daniel Jr. Plant. (The Post and Courier, Sierra Club, Energy and Policy Institute)
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Coal plants fell to less than half of China's power capacity in 2020: Fitch Ratings, a financial consultancy company, estimates Chinese coal generation capacity fell below 50 per cent for the first time and projects it will fall by a further 3 per cent in 2021. The report notes that at the end of 2012, coal accounted for 66 per cent of Chinese power generation with the latest drop due to a surge in wind power installations to meet the deadline to secure subsidies. Wind, solar and hydro generation capacity increased in 2020 by 178 per cent, 60 per cent and 217 per cent respectively. Capital expenditure on new generation in 2020 saw 61.7 per cent directed to wind, solar and biomass. (South China Morning Post, Fitch Ratings)
Czech Republic launches legal action against Poland over mine: The Czech Republic will file legal action in the European Court of Justice over Poland’s decision to approve the expansion of the Turow lignite mine near the border between the two countries. Residents oppose the project in large part due to the impacts on groundwater supplies. One resident said groundwater levels had fallen by eight meters in 2020 alone compared to the utility PGE’s estimate of a four meter decline by 2044. Czech Deputy Foreign Minister, Martin Smolek, said the case will primarily focus on the lack of opportunities for Czech citizens to participate in the permitting process or legal challenges against it. The legal challenge comes as Czech political parties remain split over whether to phase out coal power by 2038 or 2033. (Politico, Czech Ministry of Foreign Affairs, Europe Beyond Coal, Reuters)
Funders tighten leash on FirstEnergy over Ohio scandal: FirstEnergy, the utility at the centre of the $61 million Ohio coal and nuclear plant bribery scandal, has told investors a US$4 million payment in April 2019 to a company consultant “may have been for purposes other than those represented within the consulting agreement.” FirstEnergy didn’t name the official but Ohio Governor Mike DeWine said it is former Public Utilities Commission of Ohio Chairman Sam Randazzo. The company also disclosed the scandal has resulted in higher costs and restrictions on its credit agreements and that any breach of its covenants “related to alleged failures to comply with anti-corruption and anti-bribery laws” could result in a default on its loan agreements. The company warned investors in the event of a default it could face demands to immediately repay US$2.2 billion and credit commitments could be terminated. Two former lobbyists charged by the US Department of Justice and the dark money group, Generation Now, have agreed to plead guilty to federal racketeering charges. (WOSU Public Media, Cleveland, First Energy)
Villagers resist eviction without full compensation for Pakistan mine: Villagers affected by the construction of coal projects have expressed alarm at the failure of authorities to honour compensation agreements for relocation. Four hundred and fifty families in WarWai and other nearby villages affected by the Thar Block I project said each family was to be paid 4.25 million rupees (US$26,000) and the government was to provide schools, a hospital and housing. They said while officials had paid villagers half the amount about 14 months ago they have not paid the balance. The villagers, who said they don’t oppose the project, complained fences have been erected around their villages and police begun to harass them. (Daily Times, Business Recorder)
Indonesian coal company under investigation over coal slurry spill: The coal mining company PT Kayan Putra Utama Coal (KPUC), a subsidiary of the privately owned KPP, is under investigation for a coal slurry spill on February 7 into the Malinau River in North Kalimantan. The villagers report the spill resulted in a large fish kill and water being cut off for downstream households. The North Kalimantan provincial legislature has written to local authorities urging an investigation into the spill. Local NGOs argue coal spills into the Malinau River system have become a common problem as coal production has grown. According to the consultancy Wood Mackenzie, KPUC exports most of its coal production to South Korea with smaller amounts sold to Japan, Taiwan, Malaysia and India. (Mongabay)
Sixteen Indian tribal leaders imprisoned over coal dust protests: Sixteen tribal activists have been imprisoned since February 14 after a January 19 protest by 5000 people against dust pollution from trucks carrying coal from Kulda and Basundhara mines. The mines are owned by Mahanadi Coalfields, a subsidiary of government-owned Coal India. The 16 villagers have been charged with attempted murder, criminal intimidation and other charges, based on a complaint lodged by a truck driver. The villagers argue the arrests are an attempt to stifle popular opposition to the estimated 3000 coal trucks a day passing through the villages. The villagers argue the dust has polluted agricultural lands and water supplies. Despite the public opposition to the mines the Ministry of Environment and Forest's Expert Appraisal Committee recently approved the expansion of the Kulda mine from 14 million to 19.6 million tonnes of coal a year. (Hindustan Times)
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Australia: CS Energy fined A$200,000 (US$158,000) for failing to provide frequency control ancillary services it was under contract for from two coal plants.
Colombia: Coal lobby groups gear up to oppose proposed carbon tax of US$4.50 per tonne of carbon dioxide equivalent on coal power plants.
India: National Green Tribunal orders closure of coal-fired brick kilns in Delhi’s National Capital Region during periods of extreme pollution.
India: NLC India has been illegally operating its 15 million tonne a year lignite Mine-II in Tamil Nadu after failing to apply for a fresh environment clearance before October 2018.
US: Northern Indiana Public Service Company will retire two units with a combined capacity of 1096 MW at the R.M. Schahfer plant by the end of 2021. The units were previously slated to close in 2023.
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Another insurance company rules out support for Adani: Brit, a major Lloyd’s of London insurer, is the latest firm to rule out providing insurance for Adani’s controversial Carmichael coal mine project. In an email to Insure Our Future, a NGO pressing insurance companies to end support for fossil fuel companies, Brit wrote it “does not, has never, and will not write any policies relating directly to the Adani Carmichael coal mine itself.” It also ruled out insurance for any other companies seeking coverage for their role with the project. (Insurance Business Australia)
Spanish bank tightens coal lending policy: Banco Santander, Spain’s largest bank, has announced that by 2030 it will exclude financing all power utilities with over 10 per cent of revenues from coal generation and end all support for thermal coal mining. The media release quoted Santander’s executive chairman, Ana Botin, stating “climate change is a global emergency.” The bank said it will publish decarbonisation targets for other sectors, such as mining, by September 2022. (Barron’s, Santander)
Report highlights Australian coal plant closures likely to accelerate: A report by the Institute for Energy Economics and Financial Analysis and Green Energy Markets estimates three to five of the 15 coal plants remaining after the closure of the 2000 MW Liddell plant in 2023 will be under financial stress by 2025. The report estimates Australia’s eastern states grid is likely to have an additional 28,000 MW of renewables by 2025. As a result it estimates revenue for individual coal plants on the wholesale spot market could fall by between 44 per cent and 67 per cent between 2018 and 2025 with earnings before interest and tax dropping by up to 119 per cent. The five plants most at risk are the 2880 MW Eraring, 1400 MW Mount Piper and 1320 MW Vales Point coal plants in New South Wales, the 680 MW Gladstone plant in Queensland and 1450 MW Yallourn plant in Victoria. The five plants are currently scheduled to shut between 2029 and 2043. (Guardian, Institute for Energy Economics and Financial Analysis [Pdf])
New Swedish ‘green steel’ proposal announced: H2 Green Steel, a new steel startup company, is proposing to build a hydrogen-based steel plant in northern Sweden with the first stage to be commissioned in 2024. The project aims produce 2.5 million tonnes of steel a year by 2026 and up to 5 million tonnes by 2030. Investors in the project include the Swedish truck maker Scania and the German steel company Bilstein. The company is proposing to initially use 60 per cent scrap steel and 40 per cent iron ore. It is estimated the plant will consume about 15 terawatt-hours of electricity by 2026, or 11 per cent of total Swedish energy consumption in 2020. (Bloomberg, Barents Observer)
After Vietnamese coal plant struggled for finance, public utility takes on project: Vietnam’s Prime Minister Nguyen Xuan Phuc has assigned the development of the proposed 1200 MW Quang Trach 2 coal power plant to the publicly owned utility EVN. In 2013 Russia's Inter RAO Group took on the project. However, a few years later it dropped out with EVN left to undertake a feasibility study on the project with a consortium of Hong Kong investors touted as being interested in backing the project. The two units at the US$2.1 billion plant are projected to be complete by 2029, three years later than previously planned. As a result of delays with the construction of the adjoining 1200 MW Quang Trach 1 plant, EVN took over the project from PetroVietnam in October 2016. (Nang Luong Viet Nam [Vietnamese], Global Energy Monitor)
US government settles US$61.5 million debt for pennies in the dollar: The US Department of Interior has reached a settlement with Eagle Specialty Materials (ESM) on the US$61.5 million debt and interest on royalties owed on coal produced from the Belle Ayr and Eagle Butte coal mines. Under the agreement the department will receive a fraction of the funds owed. In October 2019 ESM was paid over US$90 million by Contura to take over the Belle Ayr and Eagle Butte coal mines as part of a complex bankruptcy settlement with Blackjewel. The Powder River Basin Resource Council said the deal, reached as part of Blackjewel’s bankruptcy proceedings, costs Wyoming and American citizens tens of millions of dollars. With federal royalty payments split roughly 50:50 with Wyoming, Bob LeResche from the council said the deal “forgives tens of millions of dollars in royalties that should have been supporting Wyoming schools and other federal projects.” (WyomingNews)
Uncertain future for what was once the largest US coal mine: Arch Resources’ Black Thunder mine in Wyoming, which was once the largest in the country and produced almost 10 per cent of US coal in the last quarter of 2020, faces an uncertain future as major customers close coal plants. S&P Global estimates 43 per cent of coal from the mine in the third quarter of 2020 was supplied to plants that have closed or have specified closure dates. It is estimated over a quarter of production from the mine is currently sold to coal plants due to close by the end of 2025. In 2020, producers in the Powder River Basin region produced just 230.1 million US short tons (209 million tonnes) of coal, down 49.5 per cent from the 455.5 million US short tons (413 million tonnes) produced in 2009. (S&P Global)
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