January 17, 2019
Issue 260  |  View Past Issues

Editor's Note

Over the Christmas/New Year break many of the trends well established early in 2018 continued to play out. In Japan, Turkey and Pakistan, proposed new coal plants have been cancelled. In Canada, two more plants are set to exit by 2030, albeit with a little backsliding on two units originally scheduled to close at the end of this year. Barclays, a major global investment bank, has ruled out project funding for new thermal coal mines and power plants but left significant loopholes to preserve its support for existing controversial customers. As Indonesia gears up for a national election, scandals in the coal sector keepemerging, with the government’s own anti-corruption agency charging a former minister over alleged bribes for a new coal plant.

Major shifts are occurring in some of the biggest coal countries too. After China’s soft ban on coal imports late in 2018, all are watching to see what happens next. A continuation of the ban and a switch to domestic coal would have profound effects on the global coal market. In the US even the traditionally conservative Energy Information Administration is predicting a continued decline for coal power. Colorado, a state blessed with strong wind and solar resources and with Democrats taking over the governorship and both houses of the legislature, could well demonstrate how a fast phase out of coal power could deliver significant financial and social benefits. Meanwhile, in heavily coal-dependent South Africa, the publicly-owned utility Eskom is desperately seeking a large price increase and a government bailout as it tries to stay afloat.

Bob Burton


India’s plan to breathe easy is out, but targets are not legally binding

The Indian Government has released its Clean Air Action Plan but it lacks binding targets and provisions for enforcement, writes Mayank Aggarwal in Mongabay India.

It’s decision time for Southeast Asia as power demand soars

If Chinese decision makers moved swiftly to prioritise renewable investments abroad over outdated coal technologies, Southeast Asia’s energy future could quickly become more diverse and sustainable, writes Courtney Weatherby in China Dialogue.

President Trump can't stop U.S. coal plants from retiring

More US coal-fired power plants were shut in President Donald Trump’s first two years than were retired in the whole of Barack Obama’s first term, writes Scott DiSavino in Reuters

Colorado could save billions by rapidly shutting down its coal power plants

A new study on the prospects for shutting down coal power generation in Colorado reveals that a gradual exit is cheaper in direct costs but a rapid phase out creates more social benefits, writes David Roberts in Vox.

Top News

Pakistan cancels proposed China-backed coal plant: The newly-elected Government of Pakistan has told Chinese Government officials that it wants to cancel the proposed 1320 megawatt (MW) Rahim Yar Khan power project and remove it from the list of projects included as part of the China-Pakistan Economic Corridor (CPEC). The project, which was proposed to rely on imported coal, was approved for consideration by the previous government despite having been rejected once before. Pakistan government officials insist the project is unnecessary and would create overcapacity, undermining the commercial viability of the power sector. (Dawn, CoalSwarm)

Japanese utility dumps plan for new coal plant: JFE Steel Corporation and Chugoku Electric Power have cancelled the proposed 1070 MW Soga coal plant near Tokyo. A JSE spokesperson insisted that the project wasn’t being cancelled because it would have burnt coal but because “construction costs would increase more than originally anticipated.” The proposed project has been opposed by local residents and environmentalists. In early 2017 Japan's then Minister of Environment, Koichi Yamamoto, expressed concern that greenhouse gas emissions from the project would undermine Japan’s Paris Agreement obligations. (The Japan Times, CoalSwarm)

Community opposition forces cancellation of Turkish plant: Following sustained community opposition,the proposed 990-megawatt (MW) Cerkezkoy coal-fired power plant in Tekirdag province has been cancelled. Turkey's Electricity Generation Corporation (EUAS) argued the construction of the plant would require expropriation of land but a successful legal challenge blocked the utility’s plan. In late 2017 EUAS proposed an alternative location but also faced a legal challenge over that plan. Government officials acknowledged community opposition to the project but claimed that it had been cancelled “due to technical reasons.” (Yenicag [Google Translate], CoalSwarm)

Indonesian politician charged over alleged bribe for coal plant: Indonesia’s Corruption Eradication Commission (KPK) has charged former Minister for Social Affairs, Idrus Marham, of accepting bribes from Johannes Budisutrisno Kotjo, a shareholder in BlackGold Natural Resources. In December 2018 Johannes was found guilty of bribing a deputy speaker of the Energy Commission of the House of Representatives (DPR), Eni Saragih. Johannes was sentenced to two years and eight months in prison. The KPK allege Johannes gave 2.25 billion rupiah (US$159,506) to the two politicians to assist in gaining approval for the 600 MW Riau-1 coal plant proposed by Blackgold and China Huadian Engineering Company. The KPK stated that parts of the funds were earmarked to cover part of the cost of the ruling Golkar party’s extraordinary national congress in December 2017. Eni’s trial before the Jakarta Corruption Court is continuing. (Jakarta Post, Tempo)

Canada finalises end dates for Saskatchewan coal units: A draft agreement between the Canadian government and the Saskatchewan provincial government proposes the closure of the 582 MW Poplar River plant and the 276 MW Shand plant by 2030. Saskatchewan had previously argued the Shand plant should be allowed to operate until 2042 when it would have been 50 years old. The agreement also proposes allowing SaskPower’s Boundary Dam 150 MW units 4 and 5, which were originally due to close by the end of 2019, to operate until the end of 2021 and 2024 respectively. The troubled Boundary Dam 3 unit, which has been fitted with a carbon capture and storage plant, is exempt from the 2030 closure deadline. The draft agreement was released on December 29 for 60 days public consultation and, unless changes are made, is likely to be ratified in March. (The Star, Government of Canada)

India releases clean air plan to lukewarm applause: The Indian Government’s National Clean Air Programme proposes a “tentative” target of reducing PM2.5 and PM10 fine particle pollution by between 20 and 30 per cent by 2024 compared to 2017 levels. The plan proposes increased air quality monitoring and the development of city-specific action plans for 102 cities designated as in breach of air quality standards. However, even if the reduction targets are met India’s most polluted cities would still well exceed World Health Organization standards. The plan provides for no binding targets or enforcement mechanisms but notes there is a need to ensure “stringent compliance” of all coal plants with new emission standards by 2022. A study recently published in the medical journal The Lancet estimates that air pollution in India caused up to 1.24 million premature deaths in 2017. (Times of India, Government of India)

Coal shipping accidents in three countries: In early January a Panamanian-flagged coal ship, carrying 3300 tonnes of coal, sank off Turkey’s Black Sea coast with killing six of the crew. One of the seven surviving crew members said the ship’s bow broke off after the ship hit a wave. In India, a ship carrying 56,000 tonnes of coal grounded off Tuticorin and was later refloated on high tide. In the US, seven coal barges sank in the Ohio River while a further two were jammed up against the McAlpine Lock and Dam on the river. (Andalou Agency, Times of India, WBOI)


Australia: Suspected asbestos and other building waste dumped in Vale Point coal ash dam.

Australia: Queensland government declines to renew Sunshine Coast coal exploration licence.

Bangladesh: Fisheries scientist alarmed at likely impact of three proposed coal plants on important fishery.

France: Energy Minister proposes 1200 MW Cordemais coal plant could run for a “few more years” after 2022 if it converts to biomass and uses no more than 20 per cent coal in its fuel mix.

Germany: Prosper-Haniel, Germany’s last hard coal mine closes as subsidies end.

India: Citizen’s group accuses Meghalaya government of colluding with violation of court ban on ‘rat hole’ mining.

Russia: Authorities in Kemerovo in Siberia painted snow before Christmas to conceal coal dust pollution.

US: Court orders Tennessee Valley Authority contractor into mediation over workers lawsuit alleging mass poisoning from coal ash spill cleanup.

US: Trump nominates former coal lobbyist Andrew Wheeler to head US Environmental Protection Agency.

Companies + Markets

US forecaster points to coal’s ongoing decline: The US Energy Information Administration (EIA) estimates US coal production will decline by 75 million tons (68 million tonnes) due to “coal’s relatively weak competiveness in the electric power sector” and declining export markets. The EIA, which has routinely underestimated the decline of coal and the growth of renewables, estimates coal’s share of power generation will fall from 28 per cent in 2018 to 24 per cent in 2020. (Energy Information Administration)

Chinese year-end coal imports slump: China’s ban on coal imports instituted in late 2018 resulted in imports in December which fell by 46.6 per cent compared to November and were 55 per cent lower than the year before. The ban was initiated to reduce stockpiles of imported coal and boost demand for domestic coal. However, domestic coal prices remained low, raising uncertainty about whether the ban will be extended or whether imports will resume at a high level. Despite the end of year ban total coal imports in 2018 increased by 3.9 per cent to 281 million tonnes. (Platts, Reuters)

Barclays toughens coal stance but leaves big loopholes: In its new energy and climate change statement Barclays has ruled out providing project finance for new “greenfield thermal coal mines”, new coal power plants or the expansion of existing coal power stations. While ruling out project finance for these projects, Barclays says it will continue to provide general corporate financing for existing clients which own and operate existing thermal coal mines and coal power plants. In 2018 Barclays’ underwriting included for Adani, National Thermal Power Company of India and RWE, all companies embroiled in controversial coal projects. (BankTrack, Barclays)

Indonesian utility looks to buy coal mines for proposed plants: Indonesia’s publicly-owned utility Perusahaan Listrik Negara (PLN) is negotiating to buy two coal mines in Kalimantan and Sumatra to reduce its exposure to high international coal prices. PLN declined to identify the projects under consideration. Attempts to cap the price of coal for domestic power generation has been resisted by companies which have the option of exporting their product at far higher prices. PLN is in a poor financial position in part due to a cap on power prices, increasing fuel costs and plans for expensive new coal plants. Despite the rapidly falling cost of renewables, the government is seeking to press ahead with plans to build up to 20,000 MW of new coal plants. (Jakarta Post)

Rio Tinto confirms new Mongolian coal plant: On New Year’s Eve the global mining company Rio Tinto announced that it had reached agreement with the Mongolian Government to build a 300 MW coal plant near the Tavan Tolgoi coalfield to supply its Oyu Tolgoi copper mine. Rio Tinto’s original agreement with the Mongolian Government was to investigate domestic power supply.  However, repeated attempts by the Mongolian Government to attract a commercial consortium to build a plant at the Tavan Tolgoi field failed, leading Rio Tinto’s subsidiary, Oyu Tolgoi LLC, to source power from China. Mongolia is proposing to raise up to US$3 billion by selling a 30 per cent stake of the publicly-owned coal mining company Erdenes Tavan Tolgoi (ETT) through the Hong Kong Stock Exchange. ETT’s Chief Executive, Gankhuyag Battulga, said the proceeds from the partial sale would be used to fund the Tavan Tolgoi coal plant. (Reuters, Nikkei Asian Review, CoalSwarm)

Eskom pleads for higher tariffs and government bailout: At a National Energy Regulator of South Africa (NERSA) hearing Eskom’s CEO, Phakamani Hadebe, has argued the utility’s request for a 15 per cent tariff increase is one of three essential elements to put the debt-laden utility on a sounder financial footing. Hadebe flagged that in addition to the tariff increase the utility had requested the government take on 100 billion rand of (US$7.2 billion) of the utility’s 350 billion rand (US$25.4 billion) debt. Eskom has also proposed it will cut costs by 150 billion rand (US$11 billion) over the next five years. A task force of six electricity industry experts appointed by President Cyril Ramaphosa is due to report by the end of January on Eskom’s structure, business model and the revival strategy proposed by the board. Goldman Sachs has warned there is a risk that if Eskom’s bonds are sold off, the rand could depreciate by 3.5 per cent. (Times Live, Sunday Times, Reuters)

Russian coal production and exports climb: Russia’s Energy Ministry data indicates that coal exports reach 191 million tonnes in 2018, the highest level since 2013. Exports in 2018 increased by 3.4 per cent compared to 2017. However, the ministry does not detail the split between thermal and metallurgical coal. Total coal production is estimated to have increased by six per cent in 2018 to 432 million tonnes. Customs data indicates that in the first 10 months of 2018 Russian exports of thermal coal to Taiwan increased by seven percent to 8.5 million tonnes. Over the first 11 months of 2018 exports to South Korea of Russian thermal coal increased by 15.6 per cent to 18.6 million tonnes. (Platts)

Poland’s draft energy plan seeks to set a low bar: Poland’s draft energy plan proposes targets for both solar energy and energy efficiency almost one-third lower than the European Union has adopted and envisages no reduction in coal production before 2030. While the plan seeks to boost offshore wind generation it also proposes the construction of nuclear plants which are seen by analysts as very unlikely to proceed. (Financial Times)


Belt and Road insiders: What we think about 'greening' the initiative, Panda Paw Dragon Claw, December 26, 2018.

This article, based on interviews with a range of Chinese company officials primarily in the energy sector, investigates the barriers to the ‘greening’ of China’s Belt and Road Initiative.