August 15, 2019
Issue 287  |  View Past Issues
CoalWire

Editor's Note

The latest half yearly update of the Global Coal Plant Tracker reveals that just 15 countries account for over 90 per cent of all new proposed coal plants. Increasingly, the economic life span of existing coal plants is getting shorter. In the US, a coal plant Trump set out to save will be closing at the end of 2019 instead of 2021 as previously announced. In Australia, the owner of a brown coal plant which has a licence to run to 2047 has flagged that it will close in the early 2030s and possibly earlier if stronger climate policies are pursued.

The decline of coal power in key markets is having a knock-on effect on coal producers. In the US, two Powder River Basin mines rescued from bankruptcy might only reopen for less than a year rather than the six to twelve years originally claimed. In Colombia, the CEO of Cerrejon, a major coal exporter, is predicting a rapid decline of demand for Colombian coal from major European consuming countries. A new study has also detailed how a two-thirds reduction in German coal and lignite generation by 2030 would only increase power prices by about one per cent.

While India’s Prime Minister Nahendra Modi likes to promote a green image internationally, his government has told the Supreme Court it plans to allow significantly higher nitrogen oxides emissions from coal power plants. There was also a major coal ash dam failure at Essar Energy’s Mahan coal plant in Madhya Pradesh. In Gujarat, a sweetheart power deal for Adani Power’s Mundra plant may be about to unravel, with the distribution company requesting it be rescinded.

Bob Burton

Features

How plans for new coal are changing around the world

With just 15 countries accounting for 90 per cent of proposed new coal plants, policy shifts in these and a few other markets will be crucial for cutting global greenhouse gas emissions, writes Christine Shearer in CarbonBrief.

Reality of carbon capture not even close to proponents’ wishful thinking

Arguments against the early closure of two coal units at a Colorado coal plant rely on unrealistic assessment of the costs and performance of carbon capture technology, writes David Schlissel from the Institute for Energy Economics & Financial Analysis in the Denver Post.

'Coal is over': the miners rooting for the Green New Deal

Some former coal miners are pinning their hopes for Appalachia’s economic future on an economy far less reliant on coal, writes Michael Sainato in the Guardian.

Top News

NSW mine re-opening approved but five year extension rejected: The New South Wales Government’s Independent Planning Commission (IPC) has approved the proposed re-opening of the mothballed Dartbrook underground mine until 2022 but rejected Australian Pacific Coal’s bid to extend the mine life to 2027. The mine was put onto a care and maintenance basis in 2006 by Anglo American and sold to Australian Pacific Coal, a company with no mining experience. The IPC stated that the extension to 2027 “would not be in accordance with the principles of ecologically sustainable development or inter-generational equity; and, as such, is not in the public interest.” (Singleton Argus, Lock the Gate, Independent Planning Commission)

Australian utility flags early closure of brown coal plant: The CEO of Alinta Energy, Jeff Dimery, believes the 1000 megawatt (MW) Loy Yang B brown coal plant Victoria might close in the “early 2030s when those [coal] assets will really struggle to be around.” The plant currently has a licence to operate until 2047. The two 513 MW units were commissioned in 1993 and 1996. Engie sold the 1000 MW plant to Hong Kong-based Chow Tai Fook Enterprises, Alinta’s parent company, in January 2018 for approximately A$1.2 billion (US$810 million). (RenewEconomy)

Coal unit Trump wanted saved set to close 19 months early: FirstEnergy Solutions has announced it plans to close the 914 MW Unit 3 at its Mansfield power plant in Pennsylvania in November 2019 rather than its previously stated closure date of June 2021. FirstEnergy Solutions stated that the unit will be closed because of “a lack of economic viability.” The CEO and owner of Murray Energy, Robert Murray, had lobbied Trump to save the plant, which is one of the company’s customers. The Department of Energy subsequently drafted a plan aimed at bailing out struggling coal and nuclear plants but the plan was rejected by the Federal Energy Regulatory Commission. (Bloomberg)

Coalition of US states and cities challenges Trump coal pollution wind-back: A coalition of 22 states, the District of Columbia and six cities have filed a legal challenge in the US Court of Appeals against the Environmental Protection Agency’s (EPA) regulation to replace President Obama’s Clean Power Plan. The Clean Power Plan set state-by-state targets for greenhouse gas emission reductions from coal plants while the latest EPA plan leaves emissions cuts up to each state. The legal challenge argues that the EPA’s replacement rule does not “meaningfully” cut greenhouse gas emissions and is not consistent with the Clean Air Act. (Washington Post, New York Times)

Indian coal ash dam collapses: The coal ash dam at Essar Energy’s 1200 MW Mahan coal plant in Madhya Pradesh has collapsed inundating surrounding agricultural land and damaging the crops of up to 500 farmers. The Mahan coal plant is in Singrauli district which hosts 10 coal power stations with a combined capacity of 21000 MW. A local official stated that “initial investigations reveal that there was negligence on part of the power company.” However, Essar Energy stated in a media release that the dam failed due to “sabotage” but did not provide any credible evidence to support its claim. (Times of India, Global Energy Monitor, Essar Energy)

Indian power lobby presses for further delay in pollution standards: India’s Ministry of Power is lobbying the national government to further delay the deadline for compliance with new air pollution and water consumption standards for coal power plants. The standards were originally intended to come into effect in December 2017 but was extended until 2022 after lobbying from power producers. Now, in a Supreme Court case over air pollution, the government has stated that it plans to change the standard for oxides of nitrogen (NOx) emissions to allow coal plants to emit 450 milligrams per normal cubic metre (mg/Nm3) compared to the original standard of 300 mg/Nm3. Nitrogen oxides pollution contributes to smog formation and increases the likelihood of respiratory problems. (Business Standard)

Russian coal company seeking change to Big Arctic Reserve boundary: Russia’s Ministry of Natural Resources has agreed to exclude Medusa Bay from the Great Arctic Reserve to allow VostokCoal to proceed with the Chaika coal export terminal in the port of Dikson. VostokCoal’s plan is to export 19 million tonnes of coal a year via the Northern Sea Shipping Route, a route designated by President Vladimir Putin in May 2018 as a strategic priority for development. In June this year VostokCoal was fined 600 million roubles (US$9.2 million) for illegally mining and exporting coal from the remote Taymyr Peninsula. The federal environmental agency, Rosprirodnadzor, had sought a fine of 2 billion roubles (US$30.6 million). (RBC, The Barents Observer)

“No matter how much money you [Australian Prime Minister Scott Morrison] put on the table, it doesn't give you the excuse to not to do the right thing. Cutting down your emissions, including not opening your coal mines, that is the thing we want to see”,

said Enele Sopoaga, the Prime Minister of the low-lying island state of Tuvalu.

News

Australia: Over 725,000 litres of water a day delivered by rail to keep Centennial Coal mine operating.

Australia: Engineers Without Borders Australia severs ties with engineering firm GHD over its role with Adani’s proposed Carmichael coal mine.

Botswana: Minergy’s Masama thermal coal mine opens but lacks long-term offtake buyers.

India: Despite farmers concerns, Telangana state utility has been exempted from social impact assessment on 50 acres of land sought for coal conveyer for Kakatiya coal plant.

New Zealand: Nineteen arrested at an Extinction Rebellion blockade of a coal railway line to Christchurch port.

South Korea: Checks to be stepped up on radiation levels in Japanese coal ash imports used in cement production.

US: Former coal lobbyist appointed as Puerto Rico Governor ousted by Supreme Court.

“The large impact we foresaw from the market disappearing, we always saw as out there in the future. Well, the future is now,”

Guillermo Fonseca, the CEO of Cerrejon, a major Colombian coal exporter, told Bloomberg.

Companies + Markets

Colombian coal company warns of rapid decline in thermal coal market: Guillermo Fonseca, the CEO of Cerrejon, which operates the Cerrejon thermal coal mine in Colombia, has warned that demand from some European countries could decline by between 50 and 60 per cent over the next five to seven years. Cerrejon is a joint venture between BHP, Glencore and Anglo American. Cerrejon, which produced 29 million tonnes of thermal coal in 2018, primarily exports to the European market. BHP has reportedly hired JPMorgan Chase to sell its one-third stake in the project. (Bloomberg)

Fitch estimates continued decline in Chinese coal imports: Fitch Ratings, a financial services company, estimates that Chinese thermal coal imports will decline by 2023 to 40 million tonnes a year less than the 210 million tonnes imported in 2018. The decline is expected to follow a decline in power generation and heavy industry in the coastal regions mostly served by imported coal. Fitch Ratings estimates Indonesian coal companies are the most exposed to a decline in Chinese demand. It also warns that competition for growing regional markets such as Vietnam, Pakistan and India could be “intense” which could see prices driven down “if demand is lower than anticipated.” Fitch Ratings also warns that the growth markets for coal exporters “have less stable operating environments and potentially weaker counterparty credit quality.” (Fitch Ratings)

Indian utility seeks cancellation of Adani Power’s special coal cost deal: Gujarat Urja Vikas Nigam (GUVNL), the power utility owned by the Gujarat Government, has petitioned the Central Electricity Regulatory Commission (CERC) to rescind the April 12 order authorising Adani Power’s Mundra coal plant to pass the costs of imported Indonesian coal on to consumers.  GUVNL alleges Adani Power breached terms of the agreement and is seeking a refund on the payments made to the company. GUVNL has agreements covering generation of 2000 MW of the plant’s 4620 MW capacity. CERC’s order to allow Adani Power’s coal costs to be passed on to consumers is also being challenged in the Appellate Tribunal for Electricity by the All India Power Engineers Federation. (Economic Times, Livemint)

Uncertain future for Powder River Basin mines even after bankruptcy ruling: A bankruptcy court has approved the sale to Contura Energy of Blackjewel’s Eagle Butte and Belle Ayr thermal coal mines in Wyoming pending the settlement of overdue royalties owed to the federal government. While Blackjewel claimed the sale would see the mines operate for between six and twelve years, it has been reported that Contura Energy may only operate them for up to a year, mine the already exposed coal seams and then rehabilitate the land to reduce its reclamation liability. The two mines produced almost 36 million tons (33 million tonnes) in 2018. (Wyoming Public Media, Institute for Energy Economics and Financial Analysis)

Study finds little impact from German coal phase-out: An analysis of the German coal phase-out finds that power prices would be just one per cent higher in 2030 after the closure of 24,000 MW of coal capacity compared to a business-as usual-scenario. The study finds that with renewables increasing to 65 per cent by 2030, household power prices would be 0.4 Euros (45 US cents) per kilowatt-hour higher while industrial prices would benefit from wholesale prices being 0.5 Euros (56 US cents) per kilowatt-hour lower. The closure of two-thirds of coal and lignite generation by 2030 would result in a 60 per cent reduction in energy sector emissions. (Agora Energiewende)

Vietnam’s Prime Minister urges construction of two coal plants: Vietnam’s Prime Minister, Nguyen Xuan Phuc, has directed the Ministry of Industry and Trade (MOIT) and other government agencies to fast-track power projects including two coal projects, the Quang Trach 1 and Quang Trach 2 plants. Bother of the plants are proposed to be 1200 MW in capacity.  In recent months, some Vietnamese energy analysts have been arguing that new coal and other projects are needed to avoid a shortage in 2025. The government also pressed MOIT and Vietnam Electricity to complete the construction of the 1200 MW Thai Binh 2 and the 1200 MW Song Hau 1 plants, which are mostly built but have been delayed. (NangluongVietnam [Vietnamese])