December 6, 2018
Issue 257  |  View Past Issues

Editor's Note

As the United Nations COP24 global climate conference in Poland continues, new reports continue to build the case of the health toll of coal plants. A survey of women from small island states across the Pacific, Caribbean and Indian Ocean finds dangerous mercury levels in their hair. One of the major sources of mercury is coal-fired power stations. In the US, a tax incentive for coal generators to use ‘clean coal’ to cut nitrogen oxide (NOx) pollution has been revealed to have had the reverse effect but has generated huge profits for Wall Street investors. There have been other scandals too. In India, a former Secretary of Coal and two other former Ministry of Coal officials have been found guilty of corruption and criminal conspiracy over the allocation of coal blocks.

While decisive moves to curb coal appear unlikely to be adopted at the global climate conference, the deteriorating economics for new and existing coal plants continue to grab headlines. This week an analysis by Carbon Tracker reveals many coal plants are already more expensive to run than new renewables. China’s biggest power generators are set to record substantial losses due to higher domestic coal prices. Bloomberg New Energy Finance estimates that the recent high coal prices in the export coal market are pushing Australian power prices higher. Vietnam is also facing higher prices due to expensive coal imports.

Bob Burton


Stranding coal assets in Southeast Asia

Vulnerable countries in Southeast Asia risk losing billions by investing in coal rather than renewables with international finance agencies only just starting to take the issue seriously, writes Red Constantino in ABS-CBN News.

Protests against land grab for another Adani power plant in India

The confiscation of villagers agricultural land for Adani’s proposed 1600 megawatt (MW) Godda coal plant in Jharkhand reveals how laws designed to prevent villagers’ land from being seized without negotiations or compensation are being bypassed, writes Chitrangada Choudhury in IndiaSpend.

Introducing the Global Coal Public Finance Tracker

The new Global Coal Public Finance Tracker reveals the financial flows between countries providing financial support for coal projects, the companies profiting from plant construction and the countries where such projects are being built, writes James Browning in EndCoal.

Top News

Protests ahead of climate negotiations: Thousands of people attended rallies in Berlin and Cologne demanding that Germany embrace a rapid coal phase-out ahead of the opening of the COP24 conference in Katowice in Poland. The German Government had intended to have its coal phase-out negotiations finalised ahead of COP24 but they have been delayed until early 2019. In Slovakia, 12 Greenpeace protestors who scaled a tower at the Novaky lignite mine have been charged with “threatening the operations of a public interest facility”. The initial court decision to detain them pending their trial was subsequently overturned by Slovakia's prosecutor general who stated that they had been “detained unlawfully”. (Associated Press, Radio Praha, France24)

US ‘clean coal’ program made pollution worse: A US Government program offering tax incentives for the use of refined coal in power stations with the aim of cutting nitrogen oxide (NOx) emissions has failed to deliver on its promise. Reuters estimates most of the plants using refined coal have failed to cut NOx emissions. For example, between 2012 and 2014 NOx emissions from Duke Energy’s Marshall Steam Station in North Carolina were between 33 and 76 per cent higher than in 2011 before the use of refined coal began. Duke Energy also found that calcium bromide, one of the chemicals used in refined coal, polluted nearby waterways. Under the scheme, power generators are eligible for a tax incentive of US$7.03 per ton (US$6.38 per tonne) if NOx emissions are cut by over 20 per cent. With an estimated 160 million tons (145 million tonnes) of refined coal likely to be used in 2018, about one-quarter of US consumption, it is estimated the incentive will cost about US$1.1 billion. Wall Street investors have been driving the refined coal boom. Douglas Howell, the Chief Financial Officer of R.J. Gallagher, a major insurance company, recently told analysts the return on a US$5–6 million unit at a power plant was up to 500 per cent. (Reuters, Reuters)

Second coal insurance report card finds progress: The second annual scorecard by Unfriend Coal notes that in 2018 four more major insurance companies announced new restrictions on coal insurance. The scorecard notes one-third of the reinsurance market now has restrictions limiting coverage of coal projects. In 2018 five more major insurance companies have announced new polices on divesting from coal assets while three companies — AXA, Munich Re and Allianz — strengthened their policies. However, major US, Japanese and Australian insurance companies continue to support the coal industry. Unfriend Coal notes none of the nine major US insurance companies have yet taken action to reduce or end their support for coal projects. (UnfriendCoal)

Adani seeks to create momentum for stalled Australian coal project: In a bid to progress its stalled Carmichael coal mine ahead of the federal election due in the first half of 2019, Adani has announced that it will fund the A$2 billion (US$1.47 billion) start-up phase of its proposed Carmichael coal project. However, Adani still requires further approvals for its water management plan, the extinguishment of native title over its proposed mine lease area and an agreement with Aurizon for the development of a link to the existing rail network which services the Abbot Point Coal Terminal. The project also lacks insurance, with a global coalition of groups urging major insurance companies to avoid any role with the project. (ABC News, Michael West)

Legal challenge against Australian Government decision on Adani water pipeline: The Australian Conservation Foundation (ACF) has launched a legal challenge against the September 2018 decision of the Federal Minister for the Environment, Melissa Price, not to require environmental assessment of Adani’s proposal to pump up to 12 billion litres of water a year from the Suttor River to the company’s proposed Carmichael coal mine site. The Environmental Defenders Office, acting for ACF, plans to argue before the Federal Court that Price erred when she failed to require Adani’s proposal to be assessed under the “water trigger” of the Environment Protection and Biodiversity Conservation Act. (Guardian, Environmental Defenders Office)

Indian court finds ex-Secretary of Coal and other officials guilty on corruption charges: A judge appointed by the Supreme Court has found India’s former Secretary of Coal, H C Gupta, and two other former Ministry of Coal officials guilty of corruption and criminal conspiracy. The court also recorded convictions against Vikash Metals and Power Limited (VMPL), its managing director, Vikash Patni, and its agent, Anand Mallick. All were charged over the allocation to VMPL of the Moira and Madhujore (North and South) coal blocks in West Bengal. Gupta has previously been convicted in two other coal-related cases and still faces a further eight charges. Gupta and the two other public officials were sentenced to three years in jail while Patni and Mallick were sentenced to four year terms. (Economic Times, Times of India)

Study finds mercury at dangerous levels across small island states: A new study has found over half of hair samples from 757 women between the ages of 18 and 44 years in countries across the Pacific, Caribbean and Indian Ocean revealed levels of mercury of over one part per million, a level which the US Environmental Protection Agency says is associated with brain damage, kidney and cardiovascular damage and other health impacts. The results reveal that mercury has contaminated the marine food chain. One of the major sources of mercury pollution is coal power stations. (Mongabay)


Australia: Rail company Aurizon seeks to block protest group from company rail lines.

Myanmar: Local communities in Shan State express alarm at damage caused by growth in coal mining.

Tanzania: Chinese company SEPCOIII requests its joint venture partner, Kibo Mining, to approve another delay in deciding on the proposed 300 MW Mbeya coal plant.

US: Opposition grows to proposed coal-to-diesel plant in Indiana.

US: Regulators struggle to end methane emissions from a mine that closed a decade ago.

Companies + Markets

New report estimates over a third of coal plants are unviable: An analysis by Carbon Tracker of 95 per cent of the world’s existing coal power plants finds that as much as 42 per cent of the world’s coal plant capacity could already be financially unviable. The report estimates that, by 2040, up to 72 per cent of operating coal plants could be losing money due to falling renewable energy costs, increasing carbon prices and increased regulation of power sector pollution emissions. It is also estimated that by 2025 renewables will beat coal in all markets with the risk of stranded assets greatest in China, Europe and the US. Carbon Tracker cautions that they could be too conservative in their estimates, especially due to the rapid growth in public pressure over air pollution, and that plants could become unviable sooner. (Carbon Tracker [registration required])

US coal consumption keeps falling as exports become more exposed: The US Energy Information Administration (EIA) estimates domestic coal consumption will fall four per cent to 691 million short tons (626 million tonnes), 44 per cent lower than the 2007 peak. The EIA estimates that by the end of 2018 a further 14,000 MW of coal plant capacity will have been retired, cutting the US coal plant capacity from 313,000 MW at its peak to 244,000 MW. While coal producers have looked to the export market, some analysts warn that the trade war with China and uncertainty about the health of the global economy could hit exports. It is estimated that in 2018 the US will export 120 million short tons (109 million tonnes). However, as 75 per cent of US metallurgical coal production is exported, the sector is vulnerable to disruptions could be particularly vulnerable. (Energy Information Administration, Platts)

Another year of losses for China’s largest power generators: Five huge Chinese power companies, which account for almost half of the country’s power generation, are likely to rack up losses of US$2 billion in 2018 according to the China National Development and Reform Commission (NDRC). Underpinning the losses are rising domestic coal prices and the companies’ inability to recover increased costs from regulated tariffs. The NDRC has directed power utilities to negotiate two- to five-year coal supply agreements with domestic coal producers in a move aimed at stabilising domestic prices. It also directed that the contracted volume should be at least equal to 75 per cent of the utilities’ annual demand and no less than consumed in the previous year. NDRC’s aim is to maintain the Chinese domestic coal price for 5,500 kcal/kg NAR grade coal in the range of 500–570 yuan (US$72.90–83.10) per tonne. (BJX News, Platts)

Indian state proposes power price hike to help plants reliant on coal imports: The Gujarat state government has directed its power distribution company, Gujarat Urja Vikas Nigam Ltd, to increase the price paid under power purchase agreements (PPAs) entered into with Tata Power, Adani Power and Essar Power and to request approval for the changes from the Central Electricity Regulatory Commission. Essar Power’s 1320 MW Salaya plant only has a PPA with Gujarat, Adani Power’s 4600 MW Mundra plant has contracts with utilities in both Gujarat and Haryana while Tata Power’s 4000 MW plant in Mundra has contracted with utilities from five states including Gujarat. All three plants are based on imported coal and have lost money since being commissioned due to the rise in the global coal price and Indonesia insisting exports be at or above a price benchmarked against the prevailing seaborne coal price. (Economic Times)

Export market forcing power prices up in Australia and Vietnam: Bloomberg New Energy Finance (BNEF) estimates that the increase in the price of export market coal has pushed up domestic power prices in Australia as generators buy additional supplies from the coal spot market. BNEF argues that the price of coal generation in Australia’s wholesale power market has doubled since 2016. Over the same period the price of thermal coal in the seaborne market has risen from A$55–75 (US$40–55) per tonne in early 2016 to A$90–160 (US$66–118) per tonne in August 2018. In Vietnam, the public utility EVN has flagged that a five per cent increase in the cost of coal will flow through to its 2019 power price. In 2017, EVN began to import coal as coal plant capacity outstripped the capacity of domestic mines to supply demand at comparable prices. (Bloomberg, RenewEconomy, VNExpress)

Citibank sees oversupply in seaborne market: Citibank estimates global seaborne supply in 2018 will be about 956 million tonnes with demand of about 980 million tonnes. Citibank is forecasting the seaborne thermal coal market is likely to “gradually” shift from deficit to surplus over the next five years due to declining imports into Europe, China and India. China and India are both boosting domestic production and increasing renewables generation while both Indonesia and Australia are expanding exports. Citibank estimates global seaborne supply of about 947 million tonnes in 2022 with import demand of about 933 million tonnes. (Platts)

Indian court calls for documents in coal tax avoidance case: The Delhi High Court has requested that the Central Bureau of Investigation provide the court with all the original investigation files and documents relating to alleged overpricing of coal imports from Indonesia. The Center for Public Interest Litigation (CPIL) requested the court appoint a special investigative team to supervise the investigation after the Department of Revenue Intelligence identified in March 2016 that 40 companies were potentially involved in overcharging for coal. CPIL named Adani, Essar and NTPC as companies among those under investigation. (Business Standard)


Powering down coal: Navigating the economic and financial risks in the last years of coal power, Carbon Tracker, November 2018. (Registration required.)

This 52-page review of the costs of nearly all the world’s existing and proposed coal plants finds that in a 2 degree climate scenario 42 per cent are already not financially viable with 72 per cent of those operating in 2040 not viable.

Mercury Threat to Women & Children Across 3 Oceans: Elevated Mercury in Women in Small Island States & Countries, IPEN, November 2018. (Pdf)

This 66-page report investigates the mercury exposure of women in small island states, many of which are threatened by rising sea levels caused by global warming.