May 6, 2021
Issue 368  |  View Past Issues

Editor's Note

The last week has a seen a flurry of announcements of major coal plant closures, conversions and abandoned projects. In the US, the Tennessee Valley Authority has signalled it intends to close all of its coal plants by 2035, affecting 6050 megawatts (MW) of capacity at four coal power stations not covered by previously announced retirements. After a decade of community opposition the proposed 660 MW Subic coal plant in the Philippines has finally been abandoned. French utility Engie has also announced the conversion of three coal plants in Chile, bringing the country’s coal phase-out closer. In Australia, the proposed Baralaba South coal mine has been abandoned by the US insurance giant Liberty Mutual.

Other announcements suggest more cuts to coal projects are yet to come. The global insurance company Allianz has announced a further tightening of its coal policy, setting an end date for all support for coal by 2040. In Australia, a major Australian coal company has warned Asian banks may be unwilling to support coal companies if all Australian banks have withdrawn from lending to the sector. In Germany, the Constitutional Court has ruled the country’s 2019 Climate Protection Act is unconstitutional and needs to be more ambitious in its emissions reduction target, increasing pressure for an accelerated coal exit schedule. In China, President Xi Jinping has told a Politburo meeting of the need to cut energy-intensive and polluting projects.

Bob Burton


How South Korea's banks plan to kick the coal habit

South Korea’s major financial players — KB Financial Group, Shinhan Financial Group, Hana Financial Group and Woori Financial Group — have all announced plans to make their investment portfolios carbon neutral by 2050, writes Kim Jee-hee in Korea JoongAng Daily.

The end of an era: how the global steel industry is cutting out coal

Plans for new metallurgical coal mines are under threat from the growing interest of major steel producers in coal-free production, writes Sharon J. Riley in The Narwhal.

Australia wrestles with its coal mining dilemma

The downturn in the global thermal coal market will have profound impacts on Australia’s Hunter Valley but pressure for a just transition is coming more from the community than from state or federal governments locked into pumping billions into propping up the fossil fuel industry, writes Jamie Smyth in the Financial Times.

A grandiose dream to carve out a giant coal mine in frozen eastern Siberia

The development of the huge Elga coal mine in Russia’s Far East epitomises Moscow’s contrarian view of the global energy transition underway, writes Polina Ivanova in Reuters.


Chilean coal phase-out accelerates

The French energy utility, Engie, has announced plans to convert three of its newest Chilean coal-fired plants to alternative fuels by 2025. The utility said its 377 MW Infraestructura Energetica Mejillones, which was commissioned in 2019, will be converted to run on gas. It also said the 169 MW Andina and 170 MW Hornitos plants, which were commissioned in 2011, will be converted to run on biomass. Engie also announced it would commission 2000 MW of solar and wind capacity by the end of 2024, double its previous plan. In June 2019 the Chilean Government entered into an agreement with the power utilities to phase out coal generation by 2040, a target criticised as inadequate by environmental and civil society groups. The utilities agreed to close eight old units with a combined capacity of 1000 MW by the end of 2024. Six of the eight units were closed by the end of 2020 and with Engie’s announcement, almost 2900 MW will be closed by 2025. (S & P Global)

Philippines coal plant cancelled

Redondo Peninsula Energy, a consortium comprising subsidiaries of Manila Electric Company, the Aboitiz Group and Taiwan Cogeneration International Corporation, has announced the cancellation of the proposed 660 MW Subic coal plant in Zambales province. The project, which was first proposed in 2011, encountered strong community opposition, with the regional Court of Appeals of the Philippines ruling the environmental compliance certificate was invalid. Despite a higher court overturning the ruling and the consortium gaining finance, the project was further delayed when another legal appeal in May 2019 resulted in the Supreme Court of the Philippines ruling that the plant's power supply agreement was invalid as it had not gone through a competitive selection process. Faced with ongoing community opposition the consortium said it has abandoned the coal project but would retain the site for a possible gas-fired plant. (Manila Standard, Global Energy Monitor)

Farmers celebrate decision to shelve Queensland coal mine

The NGO group Save the Dawson has welcomed the decision of the US insurance company Liberty Mutual not to file an environmental impact statement (EIS) for its proposed 5 million tonnes a year Baralaba South coal mine in Queensland. In a statement the company said it would not submit its EIS “at this stage” and is evaluating unspecified “alternatives.” Save the Dawson said the company’s failure to submit its EIS by the required deadline is the end of the project but wants the company to withdraw its application. The group also wants the Queensland Government to rule out consideration of any further mining proposals over the agricultural land near the Dawson River which supplies water to two regional towns. (Reuters, Lock the Gate)

Top News

US government utility plans closure of 6050 MW of coal plants by 2035: The US Government-owned Tennessee Valley Authority (TVA) has confirmed that it plans to close four of its five remaining coal plants by 2035. The four plants have a combined capacity of 6050 MW. The fifth plant, the 865 MW Bull Run plant in Tennessee, is scheduled to close in late 2023. President Joe Biden has stated he wants the US power grid decarbonised by 2035. The plants: the 1206 MW Shawnee plant, in Kentucky, and the 2470 MW Cumberland, 976 MW Gallatin and 1398 MW Kingston plants in Tennessee. A detailed retirement schedule is yet to be voted on by the TVA board. (Reuters)

German court ruling increases pressure for accelerated coal phase-out: Germany’s Constitutional Court has ruled part of the 2019 Climate Protection Act is unconstitutional and needs to be more ambitious in its emissions reduction target. The case was brought by nine young people with the court ruling their “fundamental rights to a human future” were threatened by inadequate emissions reduction. The climate legislation, which passed parliament in 2019, set a target of a 55 per cent emissions reduction by 2030 from a 1990 baseline. “The regulations irreversibly postpone high emission reduction burdens until periods after 2030,” the court stated and specified new targets for the period after 2030 should be finalised by the end of 2022. The decision will increase pressure on the government over its 2038 phase-out date for coal power. One of the applicants, Luisa Neubauer from Fridays for Future, welcomed the ruling, stating “climate protection is not nice to have; climate protection is our basic right and that’s official now.” Germany’s federal election will be held in September with a strong chance the Greens will be part of a coalition government. (Deutsche Welle, Guardian)

Chinese President flags cuts to energy-intensive and polluting projects: China’s official Xinhua news agency has reported President Xi Jinping telling the Communist Party's Politburo meeting last week that his pledge to achieve carbon neutrality by 2060 and reduce greenhouse gas emissions after 2025 “are solemn promises China has made to the world.” Xi also emphasised the need for greater emphasis on environmental protection, pollution reduction and low-carbon development. “High-energy-consuming and high-emission projects that do not meet the requirements must be resolutely taken down,” Xi stated according to Xinhua [translation]. He also emphasised the need to “jointly build a green ‘Belt and Road’” with neighbouring countries. (Straits Times, Xinhua [Chinese])

British Columbian First Nation calls for federal review of Alberta mine: The Ktunaxa First Nation, a British Columbian First Nation, has called on the Canadian Government to become involved in the environmental review of Montem Resources' proposed Tent Mountain metallurgical coal mine in Alberta. The Ktunaxa argue that if the project proceeds it would have an impact beyond the borders of Alberta with the potential for waste rock and wastewater to affect British Columbia. They also argue the Australian-headquartered mining company has tailored the proposed production volume of the project to be just below the threshold for federal assessment. (CBC)

Leaked files reveal details of suspect contracts for South African coal plants: A tranche of leaked documents has revealed an estimated 178 billion rand (US$12.3 billion) in suspect contracts issued by Eskom over the last decade, many of which were associated with work on the 4800 MW Kusile plant and the 4764 MW Medupi plant. The last units at the Kusile plant are still under construction with the cost escalating from the initial estimate of 78 billion rand (US$5.4 billion) to 161 billion rand (US$11.1 billion). As a result of the investigations by the legal firm Bowmans for new management at Eskom, the utility has referred 110 cases to police for investigation. The Special Investigating Unit, a government anti-corruption unit, has also referred 60 cases to the National Prosecuting Agency and 53 cases to the agency’s Asset Forfeiture Unit. (News24)

US co-ops lobby group seeks to block coal exit negotiations: The National Rural Electric Cooperative Association (NRECA), the national lobby group for electricity cooperatives, is attempting to block member utilities’ negotiations with environmental groups on measures in the Biden administration’s American Jobs Plan to support the transition away from reliance on old coal plants. The CEO of the Tri-State Generation and Transmission Association, Duane Highley, told an April 7 board meeting NRECA had asked him “to not pursue these requests”. At the meeting another Tri-State executive said one of the proposals under discussion with administration officials would offer US$500 per kilowatt to cooperatives that replaced coal units with clean energy over the next five years. Tri-State estimated this measure could lead to a 3 per cent decrease in electricity prices for its member cooperatives. (Energy and Policy Institute)


Australia: South32 seeks review of Independent Planning Commission’s rejection of the proposed expansion of the Dendrobium metallurgical coal mine.

Botswana: Moody's downgrades [registration required] credit rating for state-owned Botswana Power Corporation in part due to construction problems with the 600 MW Morupule B coal plant.

China: Four coal mines suspended after inspectors found 384 violations of safety regulations.

Poland: The European Commission has warned Poland’s plan to operate the Turow mine until 2044 means it could be excluded from access to the European Union’s Just Transition Fund.

“Australian banks have stated that there is limited support for coal deals within the banks hierarchy and a term used is the ‘grief to income ratio’ was too high for coal deals,”

wrote [Pdf] Centennial Coal in a submission to a parliamentary inquiry.

“Australian banks have stated that there is limited support for #coal deals within the banks hierarchy and a term used is the ‘grief to income ratio’ was too high for coal deals,” wrote Centennial Coal in a submission to a parliamentary inquiry.

Companies + Markets

Allianz tightens coal lending policy: Allianz, a global financial services provider, has tightened its coal policy to rule out the provision of property and casualty insurance and financing to companies that are planning new thermal coal mines, have over 25 per cent of revenue from coal mining or produce over 10 million tonnes of thermal coal a year. The coal policy previously set a threshold of 30 per cent of revenue from thermal coal with the main restriction being those companies planning the expansion of coal capacity of over 300 MW. The new policy, which comes into effect on January 1, 2023, will also apply to mining service providers that earn over 25 per cent of revenue from thermal coal. From July 1, 2021 the current exclusion of insurance for single-site coal plants and mines will be extended to include related infrastructure such as coal ports. (Allianz)

One of the largest US coal plants to close by the end of 2028: American Electric Power (AEP) has announced it will close the 2600 MW Rockport plant in Indiana by the end of 2028 after reaching an agreement to buy the 1310 MW Unit 2 which is leased to the Wilmington Trust Company until the end of 2022. In July 2019 AEP reached an agreement with the Sierra Club to shutter a 1300 MW unit at the Rockport plant in 2028 and required the installation of pollution control equipment on both units by 2021 to cut sulphur dioxide emissions. The Rockport plant is the only one of the top 10 largest coal plants in the country currently slated to close before 2030. (Inside Climate News, American Electric Power)

US utility brings forward retirement of old coal units: Evergy, a utility that serves consumers in Kansas and Missouri, will close the remaining two units at the coal-fired 487 MW Lawrence Energy Center in Kansas by the end of 2023 and has proposed closing the 720 MW Unit 3 of the Jeffrey Energy Center by the end of 2030 rather than 2039. Evergy described the Lawrence Energy Center as being at “the end of its useful life”. The utility said the retirement schedule of its eight units online after 2023 is based on their “current depreciable lives” with the exception being Unit 3 at the Jeffrey Energy Center. The retirement of this unit, which was originally commissioned in 1983, “is largely driven by the expectation that environmental retrofits for this unit will be required prior to 2039.” (Evergy, Evergy [Pdf])

Covid resurgence hits Coal India: The resurgence of COVID-19 in India has resulted in a slump in Coal India’s sales in April to 54.13 million tonnes, 21 per cent lower than the target offtake of 68.89 million tonnes. A Coal India official said 5470 of the company’s 259,000 employees and 83,000 contract workers have contracted COVID-19. Public health restrictions have resulted in reduced coal offtake in some states while the company’s previously mounting stockpiles declined by 12.21 million tonnes to 87.12 million tonnes. An anonymous government official said coal supplies to power plants have not been affected. In April the number of new COVID-19 cases in India reported each day surged from just over 80,000 to over 400,000 by the end of the month. (Livemint)

Pakistan seeks to renegotiate Chinese debt on power projects: The Government of Pakistan is seeking approval from China to restructure the debt on coal and hydro power projects sponsored as part of the China–Pakistan Economic Corridor (CPEC) scheme. The coal power projects developed under CPEC include the 1320 MW Port Qasim plant, the 1320 MW Sahiwal power plant, the 1320 MW Hubco coal plant and the 660 MW Engro power generation project. The government is seeking approval to extend repayment of US$3 billion in debt from three years to between 10 and 12 years. With an extended repayment period the government estimates power price increases will be lowered by 1.5 rupees per unit (about 1 US cent) compared to its current estimate of an increase of between Rs4.60 to Rs5.65 per unit (3–3.7 US cents per unit). (The Express Tribune)

Declining Asian demand signals longer term trend: While Asia has been the largest consumer of coal in the seaborne market, data for the first three months of 2021 indicates a 6.5 per cent decline to 228.8 million tonnes compared to the same period in 2020. The first quarter of 2020 was before the peak impact of COVID-19. Longer-term trends running against the seaborne coal market include President Xi Jinping’s commitment for coal use to peak in 2025 and South Korea’s end to financing new overseas coal plants. Japan, the second largest Asian importer of coal, has cancelled its last proposed new coal plant with those currently under construction mostly replacing less efficient units. Reuters columnist Clyde Russell concludes the growth in the seaborne coal market is over with the question now being how rapid the retreat will become. (Reuters)

Australian coal company warns of finance drought as banks retreat: Centennial Coal, a subsidiary of the Thai company Banpu, has warned a parliamentary inquiry that finance is drying up for thermal coal companies as banks tighten their lending policies. The company told the inquiry “offshore Asian banks will only participate in an Australian-based syndicated financing deal if Australian banks are participating … If Australian banks don’t participate it makes it highly unlikely that Asian banks will fill the void.” Centennial Coal has five operating coal mines in New South Wales which produced 11.8 million tonnes in 2019. (Australian Financial Review [Paywall], Centennial Coal [Pdf])


The United States’ Role in Limiting Warming to 1.5°C, RMI, April 2021. (Pdf; registration required)

This 24-page report outlines a strategy for the US in helping achieving the goals of the Paris Agreement including the retirement of most coal plants by 2025.

“Confronting the myth of carbon-free fossil fuels: Why carbon capture is not a climate solution”, Environmental Working Group, April 2021.

This referenced article argues carbon capture and storage will not address the core drivers of the climate crisis or meaningfully reduce greenhouse emissions.

Europe's coal regions: boosting employment, environment, economy through 'just transition', WWF Europe, April 2021. (Pdf)

This 28-page report examines the just transition options for key European coal regions, and specifically Silesia and Eastern Wielkopolska in Poland, Western Macedonia and Megalopolis in Greece, and the Pernik and Bobov Dol regions of south-western Bulgaria and Bulgaria’s largest coal producing region of Stara Zagora.

City of Coal: the climate crimes of UK banks, Reclaim Finance and Urgewald, May 2021. (Pdf)

This 17-page report five leading UK banks provided US$56 billion of support to coal companies on in the two years to October 2020.