December 1, 2022
Issue 445  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The Queensland Land Court’s recommendation against the mining licence and environmental approval for Waratah Coal’s proposed Galilee Coal Project is of enormous significance. Judge Fleur Kingham found that climate change posed an existential threat to First Nations at risk of losing their land and culture and threatened the human rights of children and other members of the Queensland community. In Serbia, a court has ordered the state-owned utility EPS to cut pollution from its coal plants.

While the global thermal coal price in the export market has dropped below the levels prevailing before Russia invaded Ukraine, the price shocks are now catching up with importing utilities. Utilities in the Philippines and Japan are requesting significant power price increases to cover the cost of imported fossil fuels. In Bangladesh, two new coal plants are about to start supplying power – but at almost twice the estimated price when the projects were approved.

2022 CoalWire Survey

To guide the future of CoalWire we are doing a survey of readers which will take less than 5 minutes to complete. The survey will only be open until midnight Thursday December 22nd (Australian Eastern Standard Time) so please fill it out today!

And please encourage any of your colleagues who also receive the CoalWire bulletin or read it online to fill out the survey too.

Thank you for your time.

Bob Burton

Features

South African community wary as coal company redoes environmental assessment report

After a South African court found the owner of the Tendele coal mine failed to properly consult the local community on plans to expand the mine, it ordered the company to redo its environmental impact assessment. But critics of the project are not optimistic the company will address their concerns, writes Victoria Schneider in Mongabay.

India’s electricity shortage erased by renewables growth

The growth in India’s renewables capacity is starting to bend the curve of coal consumption for power generation and reduce the future trajectory, writes John Kemp in Reuters.

Seaborne thermal coal returns to pre-Ukraine invasion ‘normal’

The global thermal coal market has returned to where it was before Russia attacked Ukraine, with prices for most seaborne grades dropping back to pre-invasion levels while volumes remain steady, writes Clyde Russel in Reuters.

Top News

Court rules Serbian utility must cut sulphur dioxide emissions: The Higher Court in Belgrade has ordered the state-owned Public Electricity Company of Serbia (EPS) to cut sulphur dioxide emissions at its coal power plants. EPS operates four lignite-fired plants, including the 1110 megawatt (MW) Kostolac and 2891 MW Nikola Tesla power stations. The Renewables and Environmental Regulatory Institute (RERI) filed the case, arguing that Serbia, as a member of the Energy Community Treaty, must meet emissions limits for sulphur dioxide, nitrogen oxides and particulate matter in line with the January 2018 National Emission Reduction Plan. RERI argued the emissions from the EPS plants posed a significant risk to human health and the environment, with the court accepting medical evidence that sulphur dioxide can cause respiratory and cardiovascular diseases. Mirko Popovic from RERI welcomed the decision and said he expects EPS to comply with the judgment. (Serbian Monitor, Renewables and Environmental Regulatory Institute)

Court recommends against Australian coal mine: Queensland Land Court President, Fleur Kingham, has recommended against approval of a mining licence for Waratah Coal’s proposed Galilee Coal Project. Mining and property billionaire Clive Palmer owns the company. In her ruling, Kingham said the 1.58 gigatonnes of greenhouse gas emissions from the proposed 40 million tonnes a year thermal coal mine would pose an “unacceptable” risk to Queensland people and property. The challenge against the mine was filed by First Nations-led Youth Verdict and The Bimblebox Alliance. Kingham said approving the mine would “narrow the options” for achieving the goals of the Paris Agreement, with the potential displacement and destruction of First Nations culture counted against approving the project. She also found the ecological value of the privately owned Bimblebox nature reserve would be “seriously and possibly irreversibly damaged” by the mine. The Queensland Minister for Resources, Scott Stewart, and Minister for Environment, Meaghan Scanlon, can reject or approve Waratah Coal’s lease. (National Indigenous Times, Guardian, Queensland Land Court [Pdf])

Vietnam expands role of coal as negotiations over funding continue: A revised draft of Vietnam’s next power plan, dated November 11, flags an increase in coal generation from 21,000 MW in 2020 to more than 36,000 MW in 2030. The draft plan proposes 11 new coal plants would be built to cater for the increase, with coal generation not significantly falling until after 2040. A previous draft prepared before the COP27 conference outlined coal generation of about 30,000 MW in 2030. The latest draft plan proposes 21,000 MW of renewable capacity by 2030, compared to 26,000 MW to 39,000 MW in the October draft. A coalition of governments hopes to agree on a Just Energy Transition Partnership before a mid-December conference in Brussels. (Reuters)

India offers discounts on 141 coal blocks up for auction: In a bid to boost interest in the auctions of 141 coal blocks, the Ministry of Coal is offering companies that begin coal production ahead of the scheduled date a 50 per cent rebate on the final offer. The incentive also applies to companies that use coal blocks for coal gasification. Of the 141 coal blocks up for auction, 70 failed to sell in earlier tender rounds or were relinquished by the successful bidder. Coal mining in India was nationalised in the early 1970s, and the Modi Government auctioned off 64 coal blocks after removing restrictions on the ownership and sale of coal from new mines in 2020. (Business Standard [paywall], Ministry of Coal [Pdf])

Two Balkans countries yet to back an end to coal power: According to data from the International Energy Agency, Serbia and Bosnia and Herzegovina are the only countries in the Balkans with no announced plan to phase out coal power plants. In a list of 40 countries with the largest shares of coal generation, six in the Balkans – Bulgaria, Kosovo, Montenegro, North Macedonia, Slovenia and Turkey – have announced policies to restrict or end the use of coal at some point. Bulgaria, Montenegro and Slovenia have national plans to end coal power, and North Macedonia has accepted coal generation will need to be phased out. Turkey has committed to achieving net-zero emissions but has not yet adopted an end date for coal generation. Bosnia and Herzegovina has five operating coal plants with a total capacity of 2073 MW. Serbia has four plants with a total of 4405 MW and a 350 MW unit under construction. (Balkan Green Energy News)

Protest against new South Korean plant: Catholic civil society groups and environmentalists have held a protest against the construction of the 2100 MW Samcheok Blue Power Plant in Gangwon province. The plant is owned by a consortium including NH Nonghyup Bank and POSCO Energy and has a nominal closure date of 2054. The first 1050 MW unit will begin test operation on November 30. In September, civil society groups submitted a petition with 50,000 signatures to the National Assembly in favour of the enactment of the Coal Phase-out Act. South Korea has 23 operating coal plants, with two more under construction. (UCA News)

Report says Korean steel-making switch would save thousands of lives: A study of the health impacts of pollution from South Korea’s three coal-based blast furnaces for producing steel estimates that air pollution from the plants caused about 506 premature deaths in 2021. It estimates that unless additional emission control measures are adopted, pollution from blast furnace steel production could result in up to 19,400 cumulative premature deaths between 2022 and 2050. The Centre for Research on Energy and Clean Air and Solutions for Our Climate study estimates adopting measures outlined in South Korea’s 2050 carbon neutrality roadmap could avoid 9300 cumulative premature deaths from reliance on integrated blast furnace steel plants. (Solutions For Our Climate [Pdf])

“If you are a business [expanding existing coal mines] with a bank right now, it’s easier. If you want to build a new mine, forget it, that has become impossible,”

said Gerhard Ziems, the chief financial officer at Coronado Global Resources, a US and Australian metallurgical coal producer.

News

Australia: Activist calls on Adani to turn over images that its private investigator took of his family.

Germany: Police plan to evict protestors from Luzerath in January 2023 to allow RWE to demolish the village and expand the Garzweiler lignite mine.

US: Conservative Democratic Senator Joe Manchin’s proposed coal, oil and gas permitting changes may languish before the new Congress takes effect.

“I have decided that the climate scenario consistent with a viable mine risks unacceptable climate change impacts to Queensland people and property, even taking into account the economic and social benefits of the Project,”

wrote [Pdf] Queensland Land Court President Fleur Kingham, in her judgment recommending against approval of Waratah Coal’s proposed Galilee Coal Project.

Companies + Markets

Cost hikes of coal plants to hit Bangladesh power prices: The Bangladesh Power Development Board said the Rampal coal plant and Adani’s Godda coal plant in India would provide an additional 1400 MW capacity to Bangladesh by the end of the year, with further units commissioned early next year. However, power from the projects will be far more expensive than initially planned, partly due to the high costs of imported coal. Electricity from the 1320 MW Rampal plant will be about 14 taka per kilowatt-hour (kWh; US$0.13 per kWh) compared to the original estimate of 7.7 taka per kWh (US$0.07 per kWh). Electricity from the 1600 MW Godda plant will cost 15 taka per kWh (US$0.15 per kWh) compared to the original estimate of 8.71 taka per kWh (US$0.08 per kWh). “The false promise of coal being easy and cheap has turned out not to be true, and the country’s dependence on coal is becoming an increasing drag on its economy,” said Flora Champenois from Global Energy Monitor. (The Business Standard)

Japanese utility seeks price hike to cover cost of imported fossil fuels: Tohoku Electric Power, a power utility serving customers in the Tohoku region, is seeking approval from the Ministry of Industry for a 32.94 per cent increase in regulated electricity prices for 5.2 million customers from April 2023. Tohoku Electric Power operates five coal units and eight gas or LNG units, all reliant on imported fossil fuels. The utility is seeking a price increase to offset the high cost of imported fossil fuels and estimates it will post a loss of 180 billion yen (US$1.31 billion) in the year to the end of March 2023. Other major power utilities are expected to submit requests for increases in regulated prices over the next few months. While the government plans to pay utilities a subsidy of 7 yen per kWh (US$0.05 per kWh) for household consumers, the utilities argue this is insufficient to offset the high costs of fuels. (Japan Times)

Banks climate policies stalling new coal projects: A survey of one dozen executives of coal mining companies has found many are finding it hard to obtain financial support from banks due to policy restrictions despite the surge in prices. Without ready backing from banks, coal companies have turned to public stock markets, pre-sale finance, trading houses, private equity firms and investment funds. Small companies are struggling. Morne du Plessis, the Chief Executive of Minergy, a company wanting to develop a coal mine and power plant in Botswana, said, “commercial banking is not necessarily available”. A small US producer, Bens Creek Group, said Lloyds withdrew its banking services due to its policy of not financing companies that generate over five per cent of revenue from coal. It then took the company months to find another bank in the UK. Reclaim Finance said banks, including ANZ, Bank of Montreal, Barclays and Standard Chartered, had financed coal mining companies in 2020 but didn’t in 2021. (Reuters)

Philippines President concerned over court ruling on power contract: The Philippines Court of Appeals has granted a 60-day temporary restraining order suspending the power supply agreement between South Premiere Power Corporation (SPPC), a subsidiary of San Miguel Corporation (SMC), and Manila Electric Company (Meralco). SPPC and Meralco sought the order after the Energy Regulatory Commission rejected a request from the companies for a 30-centavo per kWh (US$0.05 per kWh) increase to offset higher imported coal and gas prices. Meralco is the largest electricity distributor in the Philippines, with the decision affecting about 7.5 million customers in Manila and surrounding areas. President Ferdinand Marcos Jr was elected earlier this year on a platform including lowering electricity prices. He said he hoped the Court of Appeals would reconsider the decision. Gerry Arances from the Power for People coalition said the decision leaves consumers “to foot the bill for SMC’s business decisions to use volatile coal and gas in its power contracts.” (Interakyson, Inquirer.net)

Report urges Queensland to diversify away from coal and gas: A report commissioned by the Queensland Government argues that there is a need to urgently diversify the state’s economy away from reliance on coal and gas. In one of the six scenarios assessed in the New Futures, New Resources report, Deloitte argues the “lose-lose” scenario of no domestic and international decarbonisation would lead to “disrupted and declining quality of growth in the
Queensland economy” and must be avoided “at all costs”. It argues this scenario would leave the state suffering the worst consequences of global climate change and the mining and resource sector exposed to disruption. Queensland is the world’s largest exporter of metallurgical coal and a major thermal coal producer for export and local power stations. Australian Conservation Foundation campaigner, Jason Lyddieth, said the state Labor Government could no longer “walk both sides of the street on climate change and fossil fuels”. (Guardian, Deloitte)

Namibia looks at switching coal from trucks to rail: TransNamib, Namibia’s publicly owned railway, has announced plans to shift truck-based coal exports from Botswana onto the railway to Walvis Bay port by early next year. Botswana wants to increase coal exports due to the high global prices and Europe’s Russian coal import ban. However, exports through the Richards Bay Coal Terminal in South Africa have been curtailed by disruptions on Transnet’s rail lines. Walvis Bay is on the east coast of Africa, while Richards Bay is on the west coast. TransNamib has negotiated a 2 billion rand (US$117 million) loan from the Development Bank of Southern Africa and the Namibian Development Bank for new locomotives and wagons. Under the scheme, coal from Botswana’s mines would be moved to Gobabis in eastern Namibia, about 600 kilometres from Walvis Bay. Initially, TransNamib estimates the railway could carry 50,000 tonnes per month from February 2023, with the potential to double later. (Reuters)