Coal’s rally thumps oil and gas, brings pain to Asian buyers
The surging spot price of coal will eventually be reflected in the short- and medium-term contracts for coal importing countries such as Japan and South Korea, writes Clyde Russell in Reuters.
Russia divestment: European Union’s economic incentive to dovetail energy security with climate law
As European Union countries divest from Russian fossil fuels, there are strong economic incentives to accelerate the switch from fossil fuels to clean energy sources, write Matt Gray, Jacqueline Tao and Alex Truby in Transition Zero.
|
US utility announces plan to close or sell two plants, including scandal-tainted Ohio coal plant
Energy Harbor has filed notices with PJM Interconnection, a major eastern US regional transmission operator, of its plans to close or sell by June 2023 the remaining coal-fired units of its 1694 megawatt (MW) W.H. Sammis plant in Ohio and the 1368 MW Pleasants Power Station in West Virginia. Energy Harbor’s President and Chief Executive Officer, John Judge, said the utility’s customers, communities, and capital markets partners made their preference for clean energy “abundantly clear”. Last year Energy Harbor said it planned to close the three remaining units at the Sammis plant by the end of 2028. The Sammis plant was scheduled to close in 2022 until it was included in Ohio’s legislated US$1.3 billion bailouts for coal and nuclear plants. The legislation has been at the centre of a major scandal over US$61 million in hidden utility payments to Ohio legislators and others which are currently the subject of the US Department of Justice prosecution of the former Republican speaker of the Ohio House, his campaign adviser and two lobbyists. (Cleveland, Energy Harbour)
|
Russian coal exports tumble after war starts: According to Refinitiv data, Russian coal exports have already dropped since the February 24 invasion of Ukraine, with exports to Europe in the first two weeks at just 1.16 million tonnes compared to exports of 3.37 million tonnes and 3.88 million tonnes in January and February, respectively. Most cargoes shipped in March would have been contracted for delivery before the invasion. Shipments from Russia to the Asian market indicate just 1.84 million tonnes exported in the first half of March compared to 4.88 million tonnes in January and 6.16 million tonnes in February. No further shipments to the Asian market are currently being arranged. (Reuters)
New report finds methane emissions higher than IEA estimate: A report by Global Energy Monitor estimates methane emissions from the world’s 2300 coal mines are about 50 per cent higher than a 2019 estimate by the US Environmental Protection Agency and 20 per cent higher than a recent International Energy Agency assessment. Current methane emissions from coal mines are estimated at 52.3 million tonnes per year. Methane emissions will increase by about 11.3 million tonnes a year if proposed new mines and expansions proceed. China, which accounts for about 55 per cent of global coal production, is estimated to produce 73 per cent of global mine methane emissions. Over a 20-year timeframe, average annual methane emissions are estimated to be on a par with the emissions from China’s entire fleet of coal power plants. Methane emissions must decline by 11 per cent a year to be in line with the International Energy Agency’s Net Zero 2030 roadmap. (Inside Climate News, Reuters, Global Energy Monitor [Pdf])
Court overturns emissions exemption for Czech coal plant: A regional court has cancelled the exemption from emission limits for mercury and nitrogen oxides granted by the Ministry of the Environment in November 2021 to the operator of the 820 MW Chvaletice lignite plant in the Czech Republic. The ministry granted the plant a six-year exemption from the standards. However, the court found any exemption had to be only for the shortest possible period. Greenpeace said that the plant must meet emissions standards or close in the wake of the ruling. (Denik [Czech], Greenpeace [Czech])
China plans domestic coal mining boom to displace imports: China’s National Development and Reform Commission (NDRC), the national economic planning agency, has proposed boosting domestic coal production by about 300 million tonnes a year. NDRC suggests that about half the increase would come from expanding existing mines and reopening mothballed mines. NDRC had proposed ensuring 620 million tonnes in stockpiled coal to avoid the risk of power outages. In 2021 power utilities curtailed power generation rather than buying expensive coal. An increase in domestic coal mining would also be aimed at cutting coal imports due to the recent surge in coal prices, which Russia’s invasion of Ukraine has exacerbated. China imported about 259 million tonnes of thermal coal and 55 million tonnes of metallurgical coal in 2021. China’s imports represent over 24 per cent of the global thermal coal trade. (Bloomberg)
Court rules Australian Government has no duty of care over coal mine: The Federal Court of Australia has unanimously upheld an appeal by the Minister for Environment, Sussan Ley, who challenged a lower court ruling that she had “to take reasonable care” to “avoid causing personal injury or death” to Australian residents under 18 when deciding on an expansion of Whitehaven Coal’s Vickery coal mine. A nun and eight children brought the case. Their lawyer, David Barnden, said the decision was disappointing, but they will carefully review it. The children can seek leave to appeal the decision in the High Court of Australia. The Vickery project, which Ley approved in September 2021, will produce up to 10 million tonnes of coal a year. (Guardian, Federal Court of Australia)
US utility refuses to disclose who approved US$60 million payment: US District Judge John Adams terminated a hearing on a proposed settlement of a class action against FirstEnergy when the utility’s lawyer refused to tell the judge which executive authorised the US$60 million payment at the heart of the case. FirstEnergy shareholders sued the board of FirstEnergy and senior executives after allegations by the US Department of Justice that the utility paid US$60 million to ensure the passage of HB6 through the Ohio legislature. The bill bailed out two nuclear plants owned by a subsidiary of First Energy and two coal plants owned by other utilities. FirstEnergy’s lawyer told the judge a senior executive authorised the payment, but he was not allowed to disclose who it was while the proposed settlement of the case was pending. (Associated Press)
US coal-state Senator vetoes Biden nominee for Federal Reserve Board: US Democratic Senator Joe Manchin, who holds a key vote in the US Senate, has vetoed President Joe Biden’s nomination of Sarah Bloom Raskin as vice-chair for supervision of the Federal Reserve Board. The US Senate has approved Bloom Raskin on two previous occasions. After stating her approval of bank regulators considering how to transition away from high-emissions investments, she became a target for the oil, gas and coal industries. Manchin, who owns a family coal company, has received the most donations in the current electoral cycle from fossil fuel companies of any US Senator. He said he opposed her nomination because he was concerned to ensure financial support for all energy options. (New Yorker)
|
Australia: Prime Minister says Australia’s remaining coal plants should “run as long as they possibly can.”
Australia: NSW Land and Environment Court has approved a five-year extension for Australian Pacific Coal’s mothballed Dartbrook mine.
Canada: Alberta government has blocked parliamentary debate on a bill to restrict coal mining on the eastern slopes of the Rocky Mountains.
Colombia: Government in discussions with Glencore and Drummond over the prospect of boosting exports while global demand is strong and prices are high.
India: Tata Steel seeks alternatives to Russian coal for its Indian and European steel mills.
UK: Ten directors resigned from the board of Evraz, a major steel and coal producer, after the UK sanctioned Roman Abramovich, who has a 29 per cent stake in the company.
UK: Discussions with French utility EDF over possible short-term delay of the 2188 MW West Burton A coal plant closure.
|
Spanish insurer toughens coal policy: The Spanish insurance company MAPFRE has tightened its climate policy to exclude insuring or investing in coal or other fossil fuel companies that “do not commit to an energy transition plan that allows global warming to be maintained at around 1.5C.” In March 2019, MAPFRE’s initial policy commitment was to no longer underwrite the construction of new coal mines or power stations or invest in companies that derive over 30 per cent of their income from coal-based energy or coal mining. It has now lowered the threshold to 20 per cent and over 20 million tonnes of thermal coal production. It has also ruled out investing in companies with coal power expansion plans of over 300 MW. (MAPFRE [Pdf, p.51], Insure our Future)
US coal plant breakdown may result in accelerated closure: Colorado Public Utilities Commission (CPUC) is considering accelerating the retirement of Xcel Energy’s 857 MW Comanche 3 unit, which broke down in January and does not have a scheduled date when it will return to service. The unit, first commissioned in July 2010, has suffered persistent breakdowns leading to CPUC staff and the utility proposing it retire in 2034. However, two CPUC commissioners requested Xcel Energy model the possibility of retiring the unit by the end of 2029. Commissioner John Gavan told a hearing on the utility’s latest update that “having an unreliable unit in your dispatch stack can be worse than not having it at all, because when you may need it, it may not be there.” (CPR News, Colorado Sun)
Germany bails out floundering coal utilities: The state-owned bank KfW has provided a €5.5 billion (US$6 billion) loan to stabilise the finances of Leag, a major lignite power utility. Uniper, which operates five coal plants in Germany, also received a loan of over two billion euros from the bank. The utilities were caught out by the cost of generation from gas and coal plants exceeding the price they had contracted to sell power to customers under long-term contracts. The utilities had insufficient funds to cover the cost of power purchases from other generators to meet their contractual obligations. Uniper also operates five power plants in Russia, four with coal units, which contribute about five per cent of the country’s electricity. On its website, Uniper states that it condemns the war in Ukraine and has decided to “restart the divestment process” from its Russian subsidiary. (Handelsblatt [German], Clean Energy Wire)
Moody’s downgrades Adani’s Queensland coal port subsidiary: Moody’s has downgraded the credit rating of North Queensland Export Terminal Pty Ltd (NQXT), a subsidiary of Adani, to negative because the company is struggling to refinance US$500 million of bonds due in December 2022. Without support from the financial sector, NQXT, which operates the Abbott Point Coal Terminal, has turned to its parent company to provide the necessary funding. Moody’s says that the lack of transparency over related corporate entities, the port’s reliance on exporting thermal coal from the Carmichael mine, and the increased risk associated with thermal coal are key reasons for downgrading NQXT’s credit rating. (Moody’s [registration required])
Chinese ministry charges companies with emissions data offences: China’s Ministry of Ecology and Environment (MEE) has charged four companies with falsifying greenhouse gas emissions data provided as part of their obligations in the national emissions trading scheme (ETS). MEE accused the firms of a range of offences, including forging and tampering with test reports, doing “false coal samples”, and “writing distorted and inaccurate conclusions”. The charges stemmed from an MEE investigation of the accuracy of greenhouse gas emission verification reports submitted in the last quarter of 2021. The ETS currently applies to about 2000 power sector operations which emit almost 4.5 billion tonnes of carbon dioxide a year or 40 per cent of the country’s total. The use of inaccurate data undermines confidence in the scheme by buyers and policymakers. (Reuters)
Australian coal company ordered to hand over audit report: A Federal Court of Australia judge, Justice Angus Stewart, has ruled that the coal mining company TerraCom must provide a copy of an internal PricewaterhouseCoopers (PwC) investigation to the Australian Securities and Investment Commission (ASIC). ASIC is investigating whether TerraCom pressured laboratories to falsify the results of coal quality tests on A$126 million (US$90.5 million) of coal exports. TerraCom argued the audit was protected by legal professional privilege, and therefore it was not required to provide it to ASIC. However, the court ruled that TerraCom’s public references to the audit exonerating senior staff amounted to waiving privilege, at least for crucial parts of the report. The judge found that as parts of the report could not be redacted without risking distorting the disclosed components, the complete audit should be provided to ASIC. TerraCom has coal mines and exploration projects in Australia and South Africa. (Australian Financial Review [Paywall], Federal Court of Australia)
Goldman Sachs challenged over support for Peabody Energy: Environmental groups argue Goldman Sachs’s decision to provide a US$150 million loan to Peabody Energy illustrates the weakness of its 2019 policy to phase out financial support for thermal coal unless companies diversified away from coal. Yann Louvel from Reclaim Finance, an NGO working to end fossil fuel finance, said Goldman Sachs’s decision reflected how its “vague” policy is “open to internal interpretation by the bank, which makes it difficult to prove a clear breach of the policy.” Peabody said it needed the loan because the surge in coal prices had triggered a US$534 million call to cover a financial shortfall on derivative contracts it entered into in 2021. Peabody Energy operates 17 coal mines in Australia and the US and produces thermal and metallurgical coal. (Financial Times, Peabody Energy)
Bangladesh cancels additional private coal terminal: The Bangladesh Government has scrapped a new coal terminal at Payra port, proposed initially as a joint public–private project. The project’s cancellation comes as a new Integrated Energy and Power Master Plan, funded by the Japan International Cooperation Agency, is being drafted. A recent report by the Institute for Energy Economics and Financial Analysis argued that to avoid significant tariff increases, Bangladesh needs to focus on renewables and to upgrade the grid rather than swapping proposed imported LNG plants for previously proposed imported coal projects. In January 2022, the Bangladesh Power Development Board proposed a bulk power tariff increase of up to 64 per cent to address a US$3.8 billion shortfall in revenue due to high costs of imported coal, LNG and oil. (The Business Standard, Institute for Energy Economics & Financial Analysis)
|
Net Zero Pathways for the Korean Steel Industry, Solutions for Our Climate, March 2022. (Pdf)
This 18-page report outlines options for South Korea’s steel industry to eliminate greenhouse gas emissions through a shift to electric arc furnaces and the use of hydrogen. South Korea imported about 36 million tonnes of metallurgical coal in 2021.
Mine-to-Plant Explorer, Ember, March 2022.
This interactive webpage allows to you view thermal and metallurgical coal shipments to and from a specific country or port, the nearest supplying mines and the closest steel and coal power plants.
Change is in the wind: Unlocking onshore wind in Poland, Ember, March 2022. (Pdf)
This 9-page report finds Poland’s restrictions banning wind farms within two kilometres of a residence and the repowering of existing sites block the country from deploying half of the onshore wind capacity necessary for Europe’s 2030 climate goals.
|
|
