March 8, 2018
Issue 220  |  View Past Issues

Editor's Note

As the financial viability of existing coal plants and the mines that supply them become ever more dire, the response of the industry is diverging. Some utilities and banks are bowing to public and financial pressure and shifting strategy. Other companies and industry groups have stepped up their lobbying efforts for even more subsidies and the axing of environmental regulations. In Australia, Adani is still seeking alternative sources of government financial support for its Carmichael coal project. In Europe, the European Parliament is set to finalise its negotiating position on whether to continue to oppose further subsidies for coal power plants. In the US, the rapid decline in coal power continues but utilities have persuaded the Trump Administration to weaken regulations governing coal ash disposal from power plants.

In Germany, the shut-down of three old coal units has been announced. In South Africa, the near-bankrupt Eskom is being pressed to slash costs and close at least its 2232 megawatt (MW) Arnot coal plant. In India, it has been reported that the government is pressing banks to take legal action against private power companies that have “gold-plated” new coal plants to avoid investing equity in now stricken projects. In Spain, a major bank has announced it won’t finance new coal plants or mines but has left itself a big loophole for Turkish plants. In Australia and the UK, Rio Tinto is facing a shareholder resolution over its financial support for coal industry lobby groups that are hostile to achieving the Paris Agreement goals.

CoalWire will be taking a one week break and will be back on March 22.

Bob Burton


The European Union can look to the US for inspiration on rejecting more coal subsidies

When the European Parliament meets to finalise its negotiating position on reforming the EU’s internal energy market, it can look to the US energy market regulator for inspiration on why rejecting subsidies for old coal plants is the best way to go, writes Joanna Flisowska, the coal policy coordinator at Climate Action Network Europe in Euractiv.

US coal industry in terminal decline despite Trump

The US coal industry is in long-term decline, a downturn that one of Trump’s own government agencies predicts will only worsen over time, writes Reid Wilson in The Hill.

Australia’s fossil fuel revolving door

Over the last decade over 180 individuals have moved between positions in the fossil fuel and/or mining industries and senior positions in government, or vice versa, writes Adam Lucas in The Conversation.

Top News

Rio Tinto faces shareholder revolt over pro-coal activism: Three pension funds have filed a shareholder resolution urging Rio Tinto to review the compatibility of its corporate policies with membership of the pro-coal Minerals Council of Australia (MCA) and its NSW and Queensland counterparts. The pension funds — Australian Local Government Super, the Church of England Pensions Board and the Seventh Swedish National Pension Fund (AP7) — want the company to disclose membership fees paid since 2012 and detail what it would take for the company to leave the MCA. (Guardian)

German coal plant closures announced: The German power utilities Steag has applied to the grid regulator to close two coal units, which have a combined capacity of 517 MW, at its Luenen plant in March 2019. Another utility, Enervie, announced that it plans to shut its 310 MW coal plant at Werdohl-Elverlingsen by the end of March. In 2017 hard coal generation in Germany fell by 17 per cent due to unfavourable economics. (Platts)

Widespread coal ash contamination of US groundwater revealed: Data filed by US power utilities with the US Environmental Protection Agency (EPA) has revealed widespread contamination of groundwater by leaking coal ash dams. Some utilities have reported elevated arsenic and radium levels in groundwater. About 90 million tonnes a year of coal ash is dumped in often unlined landfill sites near power plants. Last week the EPA proposed a dozen changes to weaken coal ash disposal regulation developed in response to the December 2008 collapse of a dam at the Tennessee Valley Authority’s Kingston Fossil Plant. (CBS, USA Today)

Adani keeps lobbying for subsidies: The Australian Government’s export credit agency, the Export Finance and Insurance Corporation (EFIC), has confirmed it is providing financial support to contractors for Adani’s proposed Carmichael mine and railway project. An EFIC representative also confirmed the agency had recently met with Adani to discuss the project. The Leader of the Opposition Labor Party, Bill Shorten, has announced that while he opposes the Adani mine, if elected, the Labor Party will not cancel environmental approvals for the project. Adani has welcomed the comments. (Sydney Morning Herald, Guardian)

EU environment groups seek to intervene in coal lobby legal appeal: European environmental groups have applied to intervene in a case brought by coal lobby groups and companies against the European Commission’s introduction of stricter limits on nitrogen oxides (NOx) and mercury emissions from brown coal plants. The new standards were introduced after years of consultation. The European coal lobby group Euracoal and four German coal companies and associations claim the new standards are not technically possible. (Deutsche Welle, European Environment Bureau)

“Ten years ago over 90% of the [US] coal fleet was operating in what would be considered baseload operation. Today that operation is below 60%, with increasing flexible or seasonal operation of coal plants,”

wrote General Electric in a submission to the US EPA.


Afghanistan: US pitch for coal mine deals only likely to spur opposition by the Taliban.

Australia: Corporate regulator launches legal action against Rio Tinto over concealing problems with Mozambique coal project.

Bangladesh: Chinese companies pitch proposals for three new 1320 MW coal plants.

Colombia: Thermal coal price rises make exports to the Asian market more attractive.

Greece: Doubts raised about viability of plan by Greek and Chinese companies to rebuild ailing Amyntaio lignite plant.

Mongolia: To cut pollution, government wants processed coal used for home heating instead of low-grade coal.

Pakistan: Energy Department of Balochistan province raises concerns over two proposed coal plants.

UK: Protest camp established against Banks Group’s proposed Bradley mine in County Durham.

US: Operators of six Alabama coal plants fined $250,000 each for breaching clean water laws.

Companies + Markets

Eskom under pressure to slash costs: In detailing why it approved only a 5.2 per cent tariff increase in 2018–19 instead of the 19.9 per cent sought by Eskom, the National Energy Regulator of South Africa (Nersa) has warned Eskom it needs to cut costs by closing its 2232 MW Arnot power station. Nersa also refused permission for 7,227 million rand (US$610 million) in proposed construction costs for the Medupi and Kusile coal plants. With Eskom’s next five-year tariff application due later this year, the regulator flagged that it would be reluctant to increase tariffs further as this could trigger a “utility death spiral” by further undermining demand. (Business Day, Nersa)

Spanish bank backs away from new coal financing: The Spanish bank BBVA has announced it will not finance new coal mines and coal-fired power stations or extensions to existing ones. It will also exclude financial support for utilities that generate more than 40 per cent of their power from coal. However, it said it would exempt countries that import more than 70 per cent of their energy from the policy, a loophole designed to cater for the bank’s desire to finance coal projects in Turkey. (Financial Times)

US coal generators wary of alternative to Clean Power Plan: In submissions to the US EPA several utilities have flagged that attempts to achieve greenhouse gas emissions reductions by promoting greater efficiency would be “a challenge” and may shorten the life of plants. The North Carolina Department of Environmental Quality argued that the EPA should accept that shifting to renewables is “not just a low-cost means of compliance but the best system of emissions reductions as chosen by the electric power industry.” The EPA is seeking to design an alternative to the Obama Administration’s Clean Power Plan. (S & P Global)

Pressure on Indian banks to sue companies over gold-plated projects: An anonymous partner with a major accountancy firm has told Livemint that the government has been lobbying banks to launch legal action in the National Company Law Tribunal against private power producers that “gold plated” new power plants. By over-inflating the cost of projects, companies could raise loans to cover the full cost of the project and avoid having to contribute any corporate equity. An estimated US$920 million (60 billion rupees) has been allocated to 10,000 MW of proposed plants on which no work has been undertaken. (Livemint)

China coal use inches up in 2017; production cuts to come in 2018: China’s coal consumption grew by 0.4 per cent in 2017 according to the Chinese National Bureau of Statistics. While this is the first increase in coal consumption in three years, the shift away from heavy industry and housing construction in late 2017 suggests the downward trend will resume in 2018. The central government has also unveiled a target to cut a further 150 million tonnes in coal production capacity in 2018. (GreenBusiness, Reuters)

Executives concealed problems with US carbon capture and storage plant for years: An internal Southern Company document reveals that it 2014 it was estimated the Kemper carbon capture and storage plant in Mississippi would be offline for maintenance for 45 per cent of its first five years of operation, far higher than the 25 per cent originally envisaged. Even though more downtime meant much higher costs for the project, the company failed to inform regulators of the problem for over three years. (Guardian, Guardian)

Turkey looks to allow importation of higher sulphur coal: Turkey’s Ministry of Energy and Natural Resources is considering relaxing the current two per cent sulphur limit on imported thermal coal. Anonymous coal trading sources have told the industry publication Platts that increasing the limit to three per cent is expected within a year. A change would potentially mean higher levels of sulphur dioxide pollution but is also likely to result in an increase in imports of higher-sulphur-content US coal at the expense of Colombian coal. In 2017 Turkey imported 33 million tonnes of thermal coal with just over half from Colombia. (Platts, Platts)