Editor's Note
It’s been another week of high-level coal scandals. In India, the former Chief Minister of Jharkhand, Madhu Koda, has been charged with corruption over the allocation of a proposed coal mine. Also in India, Adani is trying to block investigators from accessing Singaporean government records relating to a coal over-invoicing scandal. In Indonesia, the recently resigned Minister for Social Affairs, Idrus Marham, was arrested as part of an ongoing investigation into alleged bribes for a new coal plant.
Controversies over coal plant pollution continue too. In Sri Lanka, villagers have accused the Ceylon Electricity Board of breaching an agreement to cut pollution from the coal ash dump at the country’s only coal plant. In the US, Environmental Protection Agency records reveal coal ash clean-up workers were exposed to arsenic and radium without any protective clothing.
In Indonesia, the government has frozen plans for over 15,000 megawatts (MW) of new power plants, probably including many coal plants. As the economics of coal plants have become direr, the industry has stepped up lobbying for sweetheart deals to remain viable. In Poland, a new coal plant is seeking capacity payments from the outset. In India, Adani and two other companies are seeking to have consumers cover the cost of a faulty business assumption they made about the cost of imported Indonesian coal. Forecast short-term falls in the costs of solar capacity will only make the economic case of coal even worse. Despite this, the Japanese company Mitsubishi is pressing Vietnam to approve deals for two new coal plants. In the US, a coal industry-dominated advisory committee is drawing up a blueprint of polices to dramatically expand coal exports.
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South Africa’s energy plan’s drafters are stuck in a coal hole and have just kept digging
To help address Eskom’s crippling debt South Africa’s recently released draft energy plan should be revised to increase the role for new renewables to displace more expensive power from existing coal plants, writes Grove Steyn in BusinessDay.
India's muddled coal policy leaves producers and banks poorer
India’s pursuit of a massive coal plant building spree over the last decade has saddled its banks with massive debts and has starved healthier companies of funds, writes Megha Bahree in Nikkei Asian Review.
Are China's energy investments in Africa green enough?
New coal-power projects in developing countries go against China’s vision for South–South climate cooperation, writes Lili Pike in China Dialogue.
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Corruption charges laid against former chief minister of Indian state: The former Chief Minister of Jharkhand, Madhu Koda, has been charged with corruption, criminal conspiracy and cheating over the allocation of the Amarkonda Murgadangal coal block to Jindal Steel and Power and Gagan Sponge Iron. Former Congress Party MP Naveen Jindal and 14 others have previously been charged with offences relating to the allocation of the same coal block. Koda and all 14 others have pleaded not guilty. In its final report on the case the Directorate of Enforcement, India’s agency responsible for investigating money laundering, alleged Jindal Steel and Power and others had paid bribes of approximately 20 million rupees (US$283,000) to influence members of the screening committee deciding the allocation of the coal block. (Scroll) Former Indonesian Minister arrested; Speaker questioned in coal scandal: Idrus Marham, the former Minister for Social Affairs in Indonesia’s Parliament has been arrested after being interviewed by Corruption Eradication Commission (KPK) officials investigating bribes allegedly paid for the approval of the Riau-1 coal plant. The KPK allege Idrus was offered a US$1.5 million bribe when he was Acting Chairman of the Golkar Party if the public electricity utility, PLN, signed a power purchase agreement for the project. The KPK has also questioned the former Speaker of the House of Representatives, Setya Novanto, over allegations that he knew about bribes being paid over the coal-power project. The KPK have also summonsed three PLN officials for interviews as well as the CEO of Blackgold Natural Resources, the coal mining company which would have supplied fuel for the plant. (Tempo, Jakarta Post, Antara) Adani seeks to block Indian agency access to coal import scandal files: Adani has applied to the Bombay High Court seeking an order to block the Directorate of Revenue Intelligence (DRI) from requesting Singaporean authorities provide details of the company’s transactions relating to coal imports from Indonesia. The DRI is investigating 40 Indian power companies, including six Adani subsidiaries, for alleged over-invoicing on the cost of imported coal. The cost of a high coal price would be passed through to electricity consumers and also shift income into offshore accounts of subsidiaries, thereby avoiding tax in India on the company’s real profit. In early August, Adani lost an appeal in the Singapore High Court against an order for Indian state-owned banks to turn over to DRI records of accounts allegedly used to handle the transactions. The opposition Congress Party has called for the inquiry into over-invoicing, which began in October 2014, be allocated to a special investigation team to expedite the case. (Guardian, Indian Express) US coal ash disaster clean-up workers exposed to toxic waste: Internal US Environmental Protection Agency records reveal officials were alarmed that hundreds of workers were cleaning up spilled coal ash without any protective equipment, despite tests showing high levels of radium and arsenic. In December 2008, a coal ash dam at the Tennessee Valley Authority’s (TVA) Kingston coal plant collapsed, spilling an estimated 5.4 million cubic yards (4.1 million cubic metres) of coal ash sludge. An estimated 30 workers on the site have subsequently died with a further 200 sick or dying with symptoms consistent with exposure to arsenic, radium and other coal ash elements. Fifty workers have launched legal action against Jacobs Engineering, a contractor employed by TVA, over unsafe working conditions. (Knox.com) Sri Lankan villagers protest half-hearted coal ash control measures: Residents are alarmed that the terms of a plan intended to settle a legal action brought against the Ceylon Electricity Board (CEB) over pollution from the 900 MW Norochcholai coal plant are not being met. Villagers allege provisions of the agreement have not been honoured and that CEB officials no longer attend meetings with community representatives to review the implementation of the agreement. While a university study had recommended the construction of a 30 metre high wind barrier around the coal ash yard, CEB opted for a cheaper 15 metre high barrier. (Sunday Times, CoalSwarm) Adani to be prosecuted over Australian coal port pollution: The Queensland Department of Environment and Science will prosecute Abbot Point Bulkcoal, an Adani subsidiary, over allegedly illegally releasing polluted water from its Queensland coal terminal in breach of a temporary emission licence it was granted before the landfall of Cyclone Debbie in 2017. The government alleges Abbot Point Bulkcoal discharged water that contained more than eight times the approved pollutant levels. The coal terminal adjoins the Great Barrier Reef Marine Park. The case will be heard in Bowen Magistrates Court on October 23. (ABC News) US industry pitches plan for Trump to save coal: A draft report by the National Coal Council, a coal industry-dominated advisory body to the US Department of Energy, proposes a raft of measures to boost coal industry exports including the establishment of new coal terminals on the West Coast, some potentially on federal land. The report also proposes upgrading existing East Coast and Gulf Coast ports to cater for larger ships, having the government help broker coal export deals and easing a range of restrictions on support for international coal plants. Contributors to the report include representatives of Peabody Energy, the fossil fuel industry-backed Heartland Institute and the consultancy Wood Mackenzie. (S & P Global, National Coal Council) |
Africa: General Electric teams up with Kibo Mining to pursue new coal plants in Botswana, Tanzania and Mozambique. Australia: Three arrested over protest that blocked the operation of a Hunter Valley coal railway. Australia: South Australian Government approves three-month trial of underground coal gasification project. Botswana: Construction of Masama coal mine begins with aim to export 3.5 million tonnes a year to South Africa. Canada: Fishermen alarmed over seismic testing and impact on lobster fishing grounds of proposed coal export terminal. Russia: To cut costs and ease access to capital markets, SUEK, Russia’s largest coal producer, will merge with Siberian Generating Company; both companies are owned by billionaire Andrey Melnichenko. US: Billionaire Clinton donor aims to save 44 year old Navajo Generating Station in Arizona from closure. US: Trump administration proposes weakening mercury emissions standards for power plants. US: Peabody Energy surrenders 2740 acres (1109 hectares) of Powder River Basin coal leases due to being “uneconomical in current market conditions.” |
Indonesia puts half of planned new power plants on hold: Facing the rapid depreciation of the rupiah against the US dollar the Indonesian Government has announced it plans to suspend work on 15,200 MW of power projects, almost half of the proposed 35,000 MW of projects originally proposed for completion by 2020. The original program proposed about 19,000 MW of new coal plant capacity. While the latest announcement will affect projects across the energy sector, including renewables projects and transmission lines, the greatest impact is likely to be on coal plants. The Minister for Energy and Mineral Resources, Ignasius Jonan, did not specify exactly which projects will be suspended. “Power projects yet to achieve financing will be delayed as we want to reduce unnecessary imports,” he said. (Bloomberg, Reuters) With eye on possible bailouts, US company announces coal closures: FirstEnergy Solutions, one of the companies that proposed the Trump administration bailout of failing coal and nuclear plants, has notified PJM Interconnection, an eastern states transmission operator, that it plans to close three coal plants in Pennsylvania and Ohio in 2021 and 2022. The plants have a combined capacity of 4000 MW. The company complained that the plants faced an “insurmountable challenge” in the current market but flagged that a decision by the federal government to subsidise failing coal plants could see the decisions “reversed or postponed”. (Utility Dive) New Australian PM backs new coal and plant upgrades: The new Australian Prime Minister, Scott Morrison, has distanced himself from a push by pro-coal backbenchers and Murdoch media commentators to withdraw from the Paris Agreement. While Morrison said he supports the upgrade of existing coal plants on the proviso the government won’t fund them, the Minister for Energy, Angus Taylor, said the government would be “backing investment in reliable baseload power.” New wind generation projects are estimated to supply power at A$50–60 (US$36–43) per megawatt hour (MWh) while Bloomberg New Energy Finance estimates new coal projects would provide power at over A$150 (US$108) per MWh. (2GB, ABC News, RenewEconomy) Polish utility backs new coal plant investment: Energa, one of two Polish Government-owned utilities in a joint venture promoting the construction of the 1000 MW Ostroleka C plant, has voted to proceed with the project. The European Commission has approved a Polish Government capacity payments regulation, under which the Ostroleka C plant would be eligible for support for 15 years. However, the European Union is due to decide by the end of the year whether to rule out capacity payments for new coal plants. A recent report by Carbon Tracker estimates the plant could lose €1.7 billion (US$2 billion) if the EU amends its rule to ban state aid for coal plants. The other utility in the joint venture, Enea, is scheduled to vote on the project on September 24. GE Power and Alstom Power have been contracted to build the US$1.63 billion plant. (Platts) Turkish depreciation to hit imported coal, spur renewables and domestic lignite: As a result of the rapid depreciation of the Turkish lira during August, FitchSolutions estimates that electricity demand growth will slow, that some solar and wind projects will fail to gain finance in the short term and demand for imported coal and gas will fall. FitchSolutions also predicts that domestic lignite generation will increase in the short term. However, the consultancy estimates that about 8100 MW of new solar capacity will be added over the next decade and non-hydro renewables will increase from 11 per cent of electricity in 2018 to 21 per cent by 2027. The consultancy predicts that power demand growth, which was 7 per cent in 2017, will average 4.2 per cent a year between 2018 and 2027. (FitchSolutions) Mitsubishi pressure Vietnam for tax concessions on proposed plants: The Executive Vice President of Mitsubishi, Hiroshi Sakuma, recently pressed Vietnam’s Deputy Prime Minister Vuong Dinh Hue to urge him to finalise tax concessions and financing limits for the proposed 1200 MW Vung Ang 2 and 1980 MW Vinh Tan 3 projects. In early 2017 the Ministry of Industry and Trade and Mitsubishi entered into cooperation agreements for the two projects, including provisions to ensure land allocation and power purchase agreements. Mitsubishi is lobbying Vietnam to finalise support for the projects ahead of Prime Minister Nguyen Xuan Phuc’s visit to Tokyo in October where the company aims to finalise cooperation agreements for the projects. (Nhan Dan) Push to slug consumers to cover loss-making Indian plants: After repeated legal rebuffs in their bid to revise the terms of loss-making power purchase agreements, a high-level committee has proposed Adani Power, Essar and Tata Power be allowed to pass higher-than-expected costs of Indonesian coal onto the state power utility. The committee appointed by the government of Gujarat, where the three companies’ plants are based, is proposing the power purchase agreements be amended to pass-through the cost of imported coal up to a specified price level and to revise the formula after five years. The companies all won power purchase agreements via competitive bidding but failed to consider the possibility that the Indonesian Government would set a minimum export price to reflect the higher global market price. The committee’s proposal has yet to be considered by Gujarat Urja Vikas Nigam Ltd, the state-owned utility, the Chief Minister or the State Cabinet. (The Hindu) Rule change to see solar costs fall in Europe: The European Commission has lifted minimum import prices on solar cells and modules from China, Taiwan and Malaysia which were imposed as an anti-dumping measure in December 2013. IHS Markit, a market consultancy, predicts that the policy change could lead to a price fall of up to 30 per cent for new modules. IHS Markit estimates solar installations in Europe could jump from about 12,000 MW in 2018 and 17,000 MW in 2019, a jump of over 40 per cent. The consultancy concludes the policy change is likely to particularly benefit utility-scale projects in Southern Europe. (PV Magazine) |
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