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)
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