Solar and electric vehicle booms push China toward an energy tipping point
A boom in the deployment of solar capacity and electric vehicles means China is nearing a crucial stage where fossil fuel use will fall into long-term decline, writes Dan Murtagh in Bloomberg.
The ‘Big 4’ drivers of coal imports and power emissions
China, India, the Philippines and Vietnam accounted for just over half of global thermal coal imports and over 72 per cent of greenhouse emissions in the power sector during the first four months of 2023. This concentration illustrates how changes in coal demand and increased deployment of renewables in these countries will have global significance, writes Gavin Maguire in Reuters.
India’s workers are trapped in a vicious cycle of coal and heat
Continued reliance on the dirtiest fossil fuel means the world’s most populous nation is making its climate troubles worse, write Rajesh Kumar Singh and Pratik Parija in The Straits Times.
In Canada’s Rocky Mountains, an Australian-owned coal mine is quietly forging ahead
An underground coal mining project in Alberta has been quietly resurrected by Valory Resources, an Australian mining company, leaving many residents with questions about how the project got the green light and whether it will benefit the community, writes Trina Moyles in The Narwhal.
South African court orders coal company to cease work pending decision: The Pietermaritzburg High Court has ordered Petmin’s Tendele Mining to cease works expanding the Somkhele coal mine in KwaZulu-Natal until a full hearing on June 9 on an application by Mfolozi Community Environmental Justice Organisation (MCEJO) against the mining operations. The request for an injunction follows a court ruling in May last year that the company’s environmental assessment process was defective and had not complied with the Interim Protection of Informal Land Rights Act. In February 2023, the company stated it planned to resume mining, prompting MCEJO to seek an injunction. In October 2020, MCEJO member Fikile Ntshangase, who opposed the mine expansion, was assassinated in her home. No one has been charged with her murder. (News24, Daily Maverick)
Vietnam’s new power plan sets deadline for proposed coal plants: Vietnam’s recently approved Power Development Plan 8 (PDP8) set the expected amount of planned coal generation by 2030 at 30,127 megawatts (MW), up from the 21,400 MW online at the end of 2020. The PDP8 states that coal projects which have failed to demonstrate financial viability by 2024 will be cancelled. While Vietnam has 6120 MW of new coal capacity identified as “under construction”, several projects, such as the 650 MW An Khanh-Bac Giang power station, have struggled for years to attract international finance, with satellite imagery revealing little progress at the plant site. The plan proposes coal capacity in 2030 of 20 per cent of 150,489 MW. The plan proposes all coal plants must close by 2050 or transition to the use of ammonia, with the latter a strategy promoted in Asia by Japan. (Mekong Eye)
Study urges Indonesia to cancel proposed coal plants: A study by the Institute for Essential Services Reform (IESR), an Indonesian energy policy think tank, argues that the government should cancel nine coal units under construction with a combined capacity of 3000 MW without affecting system reliability or cost. The Just Energy Transition Partnership (JETP) the Indonesian government agreed to last year aims to cap power sector emissions at 290 million tonnes of greenhouse gas emissions by 2030. ESR estimates it would require about 8600 MW of coal capacity to be retired. The state-owned power utility PLN has identified 6000 MW of old coal capacity that can be retired. PLN faces significant financial challenges due to lower electricity demand growth and the high cost of capacity payments to private power producers for underutilised plants. IESR notes that the main Java-Bali power grid has a reserve margin estimated at 49.99 per cent compared to PLN’s target of 30 per cent. (Institute for Essential Services Reform [Pdf])
South Africa’s Minister for Electricity granted new powers: President Cyril Ramaphosa has announced that he has transferred responsibility for a critical section of the Electricity Regulation Act governing new generation capacity to the recently appointed Minister of Electricity, Dr Kgosientsho Ramokgopa. The powers were previously the responsibility of the pro-coal Minister for Minerals Resources and Energy, Gwede Mantashe. As a result of the decision, Ramokgopa will have responsibility for determining how much additional generation will be required and what generation technology will be selected, while Mantashe will retain responsibility for implementing projects. Ramokgopa is also responsible with Eskom for ending load shedding. The decision to delineate Ramokgopa’s role comes amidst intense lobbying for delays in coal plant closures, opposition to renewables and support by key political players for a long-term contract for gas-powered Karpowership and new nuclear power plants. (Daily Maverick [reg. required])
Further delay in repairs at Australian coal plants after 2021 explosion: CS Energy, a Queensland government-owned utility, has revealed that repairs at the Callide C power station have been further delayed, with the two 466 MW coal units not due back online until February and July 2024, respectively. The Callide C power station is a 50:50 per cent joint venture between CS Energy and a privately-owned company, Genuity. In March, Genuity was placed into administration after shareholders could not agree on further funding for the project. CS Energy stated previously that the units would return to service in October 2023. In May 2021, an explosion and fire in Unit 4 caused extensive damage and required the demolition and reconstruction of the cooling towers that service the two units. In March, the problems at the plant resulted in an increase in wholesale power prices in Queensland, with the deputy premier predicting the latest delay in restarting the plant would cause a further wholesale price increase. (ABC News, CS Energy)
Canada: Teck tops the ‘dirty dozen’ list [Pdf] of polluting mines in British Columbia, with the proposed Telkwa Coal project and the mothballed Quintette coal mine also included.
Chile: AES Andes has requested approval from the grid regulator to retire the two coal units at its 276MW Norgener power plant by the end of December 2025.
India: The Ministry of Coal has extended the deadline for bids on 106 coal blocks until June 27, 2023.
India: Coal India has increased prices by eight per cent on grades of coal mainly used by cement, steel and fertiliser producers.
South Africa: A coalition of NGOs is challenging the decision of a provincial minister to revoke the protected status of a large part of the Mabola Protected Environment to facilitate a new coal mine.
US: The Connecticut Senate has passed a bill banning private utilities from passing lobbying, trade association dues and other costs to customers.
US: A federal appeals court has stayed a decision of the Environmental Protection Agency rejecting Arkansas’s proposed plan to manage downwind emissions from coal power plants.
“The project pipeline for producing steel with hydrogen rather than coal is expanding rapidly. If currently announced projects come to fruition, we could already have more than half of what we need in 2030 for the IEA’s net zero pathway,” wrote Fatih Birol, the Executive Director of the International Energy Agency, in the Financial Times.
Glencore shareholder revolt forces consultation over climate policy: In a rebuff to Glencore management, over 29 per cent of the shares voted at the company’s annual general meeting supported a resolution requesting the company to explain how its thermal coal production is aligned with the goals of the Paris Agreement goal of limiting the global temperature increase to 1.5°C. Glencore recommended shareholders vote against the resolution, which a coalition of shareholders and NGOs had filed. A company resolution proposing the adoption of the company’s 2022 Climate Report resulted in a vote against it of 30.25 per cent of shares voted, up from 24 per cent last year. The UK Corporate Governance Code mandates management consult with shareholders where a resolution wins the support of over 20 per cent of shares voted. The company must publish a report on its discussions with disaffected shareholders within six months. Glencore is the world’s largest thermal coal exporter, with major mines in Australia and Colombia, and is also the world’s largest coal trader. Eleven per cent of shares voted against the reappointment of the chair of the board, Kalidas Madhavpeddi. (Financial Times, Australasian Centre for Corporate Responsibility, Glencore)
Falling demand hits Chinese coal mining companies, boosts utilities: New Chinese data indicates slowing demand in key economic sectors, including in industries linked to manufacturing and construction. The earnings of Chinese coal mining companies have been hit by declining prices just as a significant expansion of production is underway, and high levels of imports have boosted stockpiles. Since the start of 2022, the cost of coal at Qinhuangdao port in the northern Hebei province has declined by 18 per cent. Data from the National Energy Administration revealed that over 48,000 MW of solar capacity was installed in the first four months of 2023, triple the amount over the same period in 2022. One analyst tips that China may install between 120,000 MW and 140,000 MW of solar this year as costs decline and demand remains strong. “The good days of high coal prices are basically coming to an end,” said an analyst with Fengkuang Coal Logistics, a Chinese coal trader. (Mining.com, South China Morning Post)
Bangladesh power plant shuts down over payment dispute: The Bangladesh-China Power Company has shut down the 1320 MW Payra coal plant as part of a dispute with the Power Development Board and Bangladesh Bank over the payment of US$300 million for coal imports. China National Machinery Import and Export Company (CMC), which has a 50 per cent stake in the plant, said it would not order more coal until the outstanding debt had been paid. CMC said that the second unit at the plant would shut down on June 2, and it would take about three weeks before new coal supplies could arrive. The Payra plant was commissioned in mid-2020. The recently commissioned 1320 MW Rampal coal plant only recently resumed generation after it shut down for three weeks due to a lack of coal supplies. Earlier this year, Bangladesh Bank imposed restrictions on further coal purchases after soaring costs contributed to the depletion of its foreign exchange reserves. (Daily Star, The Business Standard)
Report argues car makers failing to decarbonise steel supply chain: A report by Greenpeace East Asia argues that the global auto industry is responsible for about 573 million tonnes of carbon dioxide emissions a year but is failing to insist steel suppliers decarbonise their production. The report estimates that the 16 largest automakers generated more than 74 million tonnes of carbon dioxide emissions in 2022 from the 39 million tonnes of steel consumed. The single largest steel consumer in the auto sector is Toyota, which Greenpeace estimated was responsible for more than 12 million tonnes of carbon dioxide emissions in 2022. Greenpeace wants automakers to disclose their emissions from steel supplies and make green steel procurement commitments. The report notes that Hyundai has initiated a partnership with South Korean steel producer POSCO to produce steel from direct reduced iron made with hydrogen, and Mercedes-Benz and BMW in China have launched projects with Baosteel and HBIS, respectively. (Al Jazeera, Greenpeace)
Global investment in coal production climbs: In its World Energy Investment 2023 report, the International Energy Agency (IEA) estimates investment in global coal production may increase by 10 per cent in 2023 to US$150 billion, compared to the US$135 billion spent in 2022. The IEA estimates that almost 90 per cent of the investment will be in the Asia-Pacific region and China and India in particular. The report notes that in 2023 the proposed coal investment is nearly six times greater than the amount envisaged in 2030 in the IEA’s Net Zero Scenario. The IEA stated that major coal exporters such as Australia, South Africa, the US, and Russia face increasing production hurdles. Australian coal companies face growing opposition, especially to greenfield mines, while US exporters struggle to attract finance and labour. An increase in Russian exports to the Asian market requires additional investment in new transport and port infrastructure, but sanctions after the invasion of Ukraine mean there are significant question marks over viability. The South African industry has been hampered by rail network problems and load shedding affecting production and investor sentiment. (S & P Global, International Energy Agency)
European coal buyers redirecting cargoes to the Asian market: Slowing power demand, increasing renewable generation and high natural gas storage inventories are prompting some coal buyers to onsell coal to the Asian market. An anonymous Indian coal trader told S & P Global that some European sellers are willing to sell cargoes at a loss. A US trader said South African exporters are competing with Colombian, Indonesian, and Australian high ash and high moisture coals in the few markets looking for supplies while Indian and Chinese demand is muted. The price of Australian 5500 kilocalories per kilogram of thermal coal has dropped from US$134 per tonne at the start of the year to US$104 per tonne in late May. A Ukrainian coal trader has reported large stockpiles of Russian coal on the routes to and at Black Sea ports due to the impact of the European Union ban on Russian coal imports and slowing demand in Turkey. (S & P Global, Montel)
South African coal exports hit a six-year low: Coal exports from South Africa have declined for the fourth year in a row, with just over 60 million tonnes shipped through the Richards Bay Coal Terminal. The port has a nominal capacity of 91 million tonnes a year. However, Transnet, the rail network operator, has experienced disruptions from derailments to the theft of critical cables and a shortage of locomotives that have constrained its operations. Demand for South African coal boomed after European Union sanctions came into effect on Russian imports, but this was less than the decline in demand from Asia. The decline in prices this year will likely result in a slump in profits for South African producers. (EnergyTrackerAsia)
“The Carbon Brief Profile: Pakistan”, Carbon Brief, May 26, 2023.
The article provides a good overview of Pakistan’s climate and energy politics and the profound energy and economic crises that have brought it to the brink of bankruptcy.
“Taking on big coal to protect Navajo water”, Grist, May 30, 2023. (Podcast and transcript)
This podcast features an interview with Nicole Horseherder, a Dine leader, on the campaign to end water extraction by the Mohave Generating Station on Navajo Nation lands.