September 24, 2020
Issue 340  |  View Past Issues

Editor's Note

General Electric has finally read the writing on the wall and agreed to exit from involvement in further new coal plant construction. Whether it decides to cancel its role in the 18 plants it is currently involved in remains to be seen. In a speech to the United Nations General Assembly, China’s President Xi Jinping flagged greater climate ambition but provided no details. In India, a new report has highlighted how few Indian coal plants are on track to meet pollution control standards which were first unveiled in 2015. To its credit, the Indian Government has announced 32 coal units at 12 plants will be closed for not meeting the standards.

Elsewhere, the impacts from the COVID-19 pandemic continue to mount. In India, analysts estimate Coal India may only produce about 580 million tonnes, well short of its original 2020 target of 710 million tonnes and even the revised goal of 650 million tonnes. In Indonesia, the downturn in demand from countries such as India and China, as well as flat domestic demand, is hitting coal mining companies hard. In Vietnam, power demand growth has slumped from over 10 per cent a year to just over two per cent this year and, despite effective control of COVID-19, is forecast by the Institute for Energy Economics and Financial Analysis to be around nine per cent a year for 2021 to 2023. With a massive expansion in high-cost coal capacity underway, lower than projected demand growth could have big financial implications for the government-owned utility EVN.

Bob Burton


China’s 2060 climate pledge: long-awaited breakthrough or sugar-coating another decade of rising emissions?

President Xi Jinping’s one-sentence announcement that China will aim to peak greenhouse gas emissions before 2030 and carbon neutrality by 2060 leaves plenty of space for different readings, writes Lauri Myllvirta from the Centre for Research on Energy and Clean Air.

Coal’s last refuge crumbles with China’s renewables plan

China has been the world’s most important redoubt of lingering coal demand. As those defences crumble, the prospect of keeping the world’s emissions within more manageable limits looks a little brighter, writes David Fickling in Bloomberg.

South African miners fight climate change

Informal coal miners in South Africa’s Mpumalanga province coalfields are pushing for a just transition away from reliance on coal mining and burning, writes Kim Harrisberg for the Thomson Reuters Foundation.


Polish court orders PGE to negotiate coal plant closure 

A judge has ordered PGE, the owner of the 5420 megawatt (MW) lignite-fired Belchatow power plant, to negotiate a closure timetable within three months with the environmental law NGO ClientEarth. ClientEarth’s case against PGE argued the power plant and two associated mines polluted land, air and water in the area and damaged the climate which, as common good under Polish civil law, must be protected. ClientEarth sought a court order that 11 of the 12 coal units at the Belchatow plant be closed by 2030 with the last unit, which was commissioned in 2011, shut down by 2035. The judge told the court “we all see the damage climate change is doing. We all breathe the same air.” (ClientEarth)

Top News

Chinese President flags more ambitious climate action: In a speech to the United Nations General Assembly, President Xi Jinping announced China will “scale up” its commitments to reduce national greenhouse gas emissions “by adopting more vigorous policies and measures.” For the first time President Xi committed China to achieve “carbon neutrality before 2060” and restated its commitment of having carbon dioxide emissions “peak before 2030.” Analysts welcomed the commitment to achieving carbon neutrality as potentially significant ahead of the finalisation of the 14th Five Year Plan which will set out the direction for the energy sector. Provincial governments and major coal and energy companies have been lobbying for the Five Year Plan to support a major increase in new coal plant construction. There have been mixed signals from the national government and key agencies on whether it will support lifting the cap on coal plant capacity or not. (Guardian, Chinese Ministry of Foreign Affairs)

General Electric rules out new coal plants: General Electric (GE) has announced it will “exit from the new build coal power market” and will “work with customers on existing obligations as it pursues this exit”. GE, which boasts on its website that it has installed 30 per cent of the world’s steam turbine capacity, provided no details on the fate of the 18 proposed coal plants it is currently involved with. These proposed projects include coal plants in Kenya, Mozambique, South Africa, Bangladesh and Bosnia. Han Chen from environment non-profit NRDC, which has campaigned against GE’s role in new coal projects, welcomed the announcement and urged the company to cancel any projects that are not yet operating. GE stated it will continue to service existing coal power plants. Market Forces said GE’s exit increases the pressure on the remaining companies in the coal plant business such as Siemens, Toshiba and Doosan. (General Electric, NRDC, Market Forces)

Indian utilities failing to act on need for pollution control upgrades: A survey by the Center for Science and Environment (CSE) has found only 35 per cent of India’s coal unit capacity complies with new sulphur dioxide emission limits announced in 2015. It also found only 56 per cent of India’s coal plant capacity meets the standards for fine particle air pollution emissions. The study found only a marginal change in compliance since October last year. The study estimates that at the current rate of upgrades 65 per cent of the coal units may not meet even the 2022 compliance deadline demanded by power industry lobby groups. CSE could find no publicly available data on the level of compliance with mercury emissions or water consumption. India’s Minister of Power, RK Singh, recently told Parliament 32 coal units at 12 plants will be closed as they have not submitted plans to install flue gas desulphurisation and nitrous oxide burners. Singh said the units, which are all over 20 years old, have a combined capacity of 5,019 MW. (Center for Science and Environment, Financial Express)

Adani mentioned  in leaked suspicious activity reports: Adani Global Pte Ltd, a Singapore-based subsidiary of the Adani Group, was the subject of several suspicious activity reports filed with the Financial Crimes Enforcement Network, a section of the US Federal Treasury that monitors potential international money laundering and other financial crimes. Records revealed Adani Global received a total of US$14.46 million from Thionville Financier Ltd, an investment company in Seychelles, a known tax haven. The most recent transfers were in January 2015. Records also revealed Thionville’s website stated it was “under construction” between 2013 and 2020. Adani insists the transactions were legitimate and had been reported to relevant authorities. (Financial Express)

Report argues Papua New Guinea plant unnecessary: A report by the Centre for Environmental Law and Community Rights and the Jubilee Australia Research Centre argues a proposed 52 MW coal plant is unnecessary and criticised the lack of consultation with the nearby community of Labu Butu, which is just 500 metres from the proposed site in Lae. The plant and an associated coal mine in Papua New Guinea (PNG) are being proposed by an Australian mining company, Mayur Resources. The report also challenges the claim the plant would produce power at a lower rate than PNG’s existing hydro and biomass resources and warns there is a risk a power purchase agreement would lock PNG into higher power prices. (ABC, Centre for Environmental Law and Community Rights)

Two groups join Colombian court case over Cerrejon river diversion plan: Two UK-based Colombian civil society groups have filed a brief in support of an action brought by the Wayuu indigenous communities seeking the enforcement of a Constitutional Court ruling. In 2017 the court ruled that the diversion of the Bruno River to allow the expansion of the Cerrejon mine violated the communities’ rights to water, health and food security. The Wayuu have asked the Court of Execution of Penalties and Security Measures to enforce the Constitutional Court order that Cerrejon undertake environmental assessment of the project with the involvement of the Wayuu communities and consider restoring the river to its original watercourse. The Cerrejon mine is owned by BHP, Anglo American and Glencore. (Garden Court Chambers, ABC Colombia and the Colombian Caravana {Spanish])

US company owned by coal baron governor aims for minimal fine: Lawyers for Bluestone Coal Corporation, a company owned by West Virginia Governor Jim Justice, have petitioned a federal court judge to dismiss a lawsuit by environmental groups over ongoing pollution from the Red Fox Mine. Bluestone’s lawyers argue that a proposed US$125,000 fine included in a proposed deal with the West Virginia Department of Environmental Protection is sufficient to resolve the matter. However, lawyers for the Ohio Valley Environmental Coalition and other environmental groups argue the proposed deal is “a self-dealing administrative order” and is an insufficient penalty to deter continued pollution in excess of discharge limits. Bluestone faces fines of up to US$170 million if the federal lawsuit proceeds. (ProPublica)

Report warns Bangladesh power plant cluster could kill 30,000: A report by the Centre for Research on Energy and Clean Air estimates the eight coal power projects centred on Cox’s Bazar would be responsible for an estimated 650 deaths per year and expose over 20 million people to sulphur dioxide emissions in excess of the World Health Organization’s 24-hour guideline level. The report estimates the plants would result in 30,000 air pollution-related deaths over an operating life of 30 years. The coal projects, which are proposed to have a combined capacity of about 10,000 MW, would emit an estimated 1600 kilograms of mercury per year into the air, affecting agricultural land and fisheries. (Daily Star, Centre for Research on Energy and Clean Air [Pdf])


Australia: A subsidiary of Whitehaven Coal has been fined A$30,000 (US$21,944) for polluting a local creek and failing to properly maintain a sediment pond.

Botswana: Minister acknowledges the Botswana Power Corporation faces growing losses due to the low availability of the 600 MW Morupule B coal plant and the increasing cost of importing power.

US: Appalachian Power agrees with Sierra Club to study possible retirement of two West Virginia coal plants, the 2933 MW John Amos plant and the 1300 MW Mountaineer plant.

Vietnam: Thai firms Egco Group, Egat International and Ratch Group enter agreement to develop the 1320 MW Quang Tri 1 coal plant in Vietnam.

Companies + Markets

Coal India production slows as downturn bites: Financial analysts doubt the ability of Coal India to achieve its target of producing between 650 and 660 million tonnes of coal this financial year. The Indian financial year runs to the end of March. Coal India had originally projected production of 710 million tonnes but a slower economy and COVID-19 restrictions have undercut power demand. In response to pressure from the government to cut expensive coal imports Coal India has launched spot auctions to substitute domestic production for imported coal. However, the brokerage firm Motilal Oswal estimates Coal India may only produce 582 million tonnes and sell 565 million tonnes this financial year. ICICI Securities estimates production of 580 million tonnes and sales of 550 million tonnes. In August, Indian electricity demand was nearly back to pre-COVID consumption. However, India now has over 1 million active cases of COVID-19 and is recording over 80,000 new known cases a day. (Daily Pioneer, Business Standard)

Indonesian utility predicts coal demand will stall in 2020: Indonesia’s state-owned utility, PLN, estimates domestic coal demand by power utilities will be 95.6 million tonnes, a 12.2 per cent decline on its original projection for 2020. PLN had originally estimated strong electricity demand growth but, due to COVID-19 restrictions, electricity demand has grown only marginally. PLN estimates coal demand by the power sector in 2021 may be 98 million tonnes, well down on its original prediction of 120.53 million tonnes. Indonesia’s Ministry of Energy estimates total domestic coal demand from all sectors may only be 125 million tonnes, well below the original estimate of 155 million tonnes. A key factor in the decline is reduced demand by the power and cement industries. (Argus)

Ratings agency tips Asian thermal coal price decline: Fitch Solutions estimates the thermal coal price in the Asian market is likely to decline to US$55 per tonne, down from its previous estimate of US$65 per tonne in 2020. It attributes the change to slowing economic growth due to COVID-19 restrictions. The average price for the benchmark 6000 kilocalories per kilogram Newcastle thermal coal has been US$58 per tonne in the year to date. Fitch Solutions estimates prices will decline after 2020–21 as demand in South Korea and Japan declines and China and India emphasise domestic supplies. (Mining, Fitch Ratings)

Polish utility announces more old coal unit closures: The Polish utility PGE has proposed the closure by the end of 2022 of a further two units at its 1720 MW Rybnik power plant. The units have a combined capacity of 450 MW. In 2018 PGE announced its plan to close 450 MW of coal-fired capacity at the plant by 2021 because of new European Union air pollution standards. The first two units will be closed on August 16, 2021 with the 225 MW Units 3 put on standby from that date. In December 2022 PGE proposes both Unit 3 and the 225 MW Unit 4 will be closed. All four units were first commissioned between 1972 and 1974. (Montel, Global Energy Monitor)

Pressure increases on South Korean banks: South Korean banks are facing increasing scrutiny of their support for coal projects as some state education offices look to select which banks hold their accounts when current contracts expire in 2020 and 2021. The move comes as the Financial Supervisory Service revealed the country’s five largest commercial lenders ― KB Kookmin, Shinhan, Woori, Hana and NongHyup ― spent 917.2 billion won (US$918 million) to finance coal-powered companies between 2015 and June 2020. The Export-Import Bank of Korea spent a combined 428.8 billion won (US$368) to finance two coal-powered plants, one in Vietnam and the other in Indonesia. A further 372.1 billion won (US$320 million) has been invested by the Korea Development Bank in coal projects since 2015. (Korea Times)

Demand downturn exposes Vietnam’s power utility to increased financial risk: A report by the Institute for Energy Economics and Financial Analysis (IEEFA) argues Vietnam’s state-owned utility EVN faces a formidable challenge to absorb increasing capacity payments for new and under-construction coal plants as COVID-19 restrictions lead to slower power demand. Between 2015 and 2019 Vietnam’s electricity demand grew at an average of 10.3 per cent a year but EVN predicts this will slump to just 2.2 per cent in 2020. The country’s Power Development Master Plan for 2021–2030, which is due to be released shortly, freezes plans for new coal proposals while allowing the completion of coal plants under construction and supporting renewables and gas plants. IEEFA cautions the impact of COVID-19, the cost of new coal plants and the need to invest in new renewables will be a difficult juggling act for EVN. (IEEFA)

Glencore coal project faces major hurdle with Australian pension fund: The A$80 billion (US$57 billion) Australian pension fund, UniSuper, has foreshadowed its opposition to Glencore’s proposed Valeria coal mine in Queensland. Glencore, which states the mine could produce up to 20 million tonnes of thermal and metallurgical coal for 35 years, argues it doesn’t need UniSuper’s approval for the project to proceed. However, UniSuper’s Chief Investment Officer, John Pearce, said through the joint venture it holds a 15 per cent stake in the mine with some of the decisions requiring support of all the partners. (S & P Global)

Report urges power sector reforms needed for Southeast Asia to reach 1.5 track: A report by Greenpeace Southeast Asia finds that without significant reforms none of eight Southeast Asian countries – Indonesia, Vietnam, Thailand, the Philippines, Malaysia, Laos, Cambodia, and Myanmar – will meet the Paris Agreement goal of limiting global heating to a 1.5 degree increase. The report finds Vietnam is most advanced in promoting solar and wind capacity. The report argues Indonesia’s state-owned utility PLN, which has the second largest list of proposed coal plants in the region, continues to pour funds into supporting new coal projects but devotes little attention to renewables. Greenpeace Southeast Asia called for Indonesia to adopt a target of 50 per cent renewables by 2030. (Greenpeace Southeast Asia[Pdf])


Environmental Norms for Coal-Fired Power Stations, Center for Science and Environment, August 2020. (Pdf)

This 8-page briefing paper reviews the lack of progress of India’s power generators in meeting pollution control standards first unveiled in 2015.

“Revisiting carbon lock-in in energy systems: Explaining the perpetuation of coal power in Japan”, Energy Research & Social Science, November 2020.

This journal article explores the range of factors underpinning continued reliance on coal power in Japan and some emerging opportunities to overcome these hurdles.

The Coal Agenda: Mayur Resources and the Push to Start a Coal Industry in PNG, Centre for Environmental Law and Community Rights and Jubilee Australia and September 2020. (Pdf)

This 51-page report details the push by a small Australian mining company to establish Papua New Guinea’s first coal mine and associated power plant.