US solar prices undermining coal: The Central Arizona Project (CAP), a US water utility, has entered into a power purchase agreement to supply 15 per cent of its power needs from a solar project at almost half the cost of the Navajo Generating Station (NGS). Peabody Energy has been campaigning to prevent the 2019 shutdown of the NGS plant by requiring the CAP to buy more expensive power from the expensive coal plant. Elsewhere, Nevada Power, a utility owned by Warren Buffett’s Berkshire Hathaway, has entered into power purchase agreements to sell power from 1001 MW of new capacity at a record low solar price of $US21.55 per megawatt hour. (GreentechMedia, RenewEconomy) Ballooning Chinese coal plant overcapacity: Researchers at North China Electric Power University in Beijing estimate China’s decision in 2014 to delegate decisions on power plant construction to the local government resulted in coal plant overcapacity of between 140,000 and 160,000 MW in 2015. They estimate there could be about 210,000 MW surplus capacity by 2020 or, in its worst-case scenario, between 240,000 and 260,000 MW unneeded capacity. (Resources, Conservation and Recycling) India’s banks’ bad debts pile up: The value of non-performing assets underwritten by India’s banks has grown by 44 per cent over the year to the end of March and now stands at 10.25 trillion rupees (US$152 billion). Just under 90 per cent of the non-performing loans are held by public sector banks. One of the sources of financial stress for India’s public banks has been lending for power projects. Also looming over the private power generators — mostly companies with stressed coal plants — is a directive from the Reserve Bank of India that after October 1, 2018 companies in default on loan repayments to banks will be required to commence bankruptcy proceedings. (Livemint, The Wire) India and Indonesia canvass coal mining plan for Papua province: A plan by Indian government officials to finance coal exploration in Papua province has stalled over their insistence that they gain exclusive access to any deposits without a competitive bidding process. Representatives of Indonesia’s state-owned energy company Pertamina and the power utility PLN, as well as the private mining company PT Adaro Energy, were also involved in the talks. While Indonesia suggested it would be more appropriate to work with publicly owned utilities due to restrictions on awarding concessions to private companies, other possibilities are still under consideration. (Mongabay) Uncertainty about Chinese purchases of US coal: Chinese media reports suggest domestic steelmakers may be directed to purchase more US coal to reduce its trade surplus and ease tensions with the Trump Administration. While some suggest that the directive would probably apply to metallurgical coal shipments rather than high-sulphur thermal coal, the cost of US coal remains a disincentive for importers. Anonymous traders have mooted that US coal imports may require a waiver from the 6 per cent import tax to make them more competitive against exports from Mongolia, Russia and Canada. Shipments from Australia and Indonesia are exempt from the import duty under the provisions of free trade agreements. (Platts, Platts) Sri Lankan Government seeks to revisit coal-free power plan: Sri Lanka’s Prime Minister, Ranil Wickremesinghe, has appointed a six-person committee to re-evaluate the coal-free long-term generation expansion plan approved by the independent Public Utilities Commission of Sri Lanka (PUCSL) in late 2017. In its initial draft power plan for 2018–2037 the Ceylon Electricity Board (CEB) had proposed that PUCSL approve seven new coal units with a total capacity of 3000 MW. However, PUCSL determined the CEB had dramatically underestimated future coal costs to skew the least-cost supply options in favour of coal power. Subsequently, the CEB and the union representing its engineers have been pushing to overturn the PUCSL plan. The committee will report to Wickremesinghe by the end of June. (Newsfirst, Sunday Times) Solar deal with Australian mining company further isolates coal lobby: A corporate bulk-buying power consortium initiated by the South Australian Chamber of Mines and Energy (SACOME) has entered into an eight-year power purchase agreement with a renewable energy developer. The consortium was established after the closure of the coal-fired Northern Power Station. Five companies, including two mining companies, have signed up for power likely to be sourced from a new 220 MW solar farm. SACOME is an associate member of the Minerals Council of Australia, which is campaigning against renewable energy and in favour of subsidising new coal plants. (RenewEconomy, South Australian Chamber of Mines) |
