September 8, 2022
Issue 433  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The closure of Hawaii’s only coal plant and the switch to renewables is symptomatic of the decline of coal power generation in the US. While the plant’s closure has gathered global attention, less well known is that as recently as 2017, there was a proposal to expand the plant. It was a proposal rejected by regulators as “not reasonable or in the public interest”. Another successful campaign against a coal project was by a coalition comprising a First Nations group, farmers and environmentalists against Shenhua’s proposed Watermark project in New South Wales.

Other news coverage this week has highlighted the long tail of community impacts from coal projects, including air pollution in South Africa’s Mpumalanga Highveld and Bosnia and Herzegovina, water pollution from mines in Canada, pollution from an old coke oven plant in Alabama in the US and the impacts on communities displaced by Glencore’s Cerrejon mine in Colombia. In all these cases, impacted communities struggle to have their voices heard and concerns taken seriously.

Another significant report notes how Russian coal displaced by the European Union’s export ban is struggling to find alternative markets. The problem for Russian exporters is that major Asian importers are moving to alternative suppliers. Increased sales to China and India are not making up for the loss of sales to Europe and Ukraine.

Bob Burton

Features

How the local community rallied to defeat Shenhua’s Watermark open-cut coal mine in New South Wales

A coalition of First Nations, farmers and others campaigned for over 14 years before Shenhua’s proposed Watermark coal mine in New South Wales was finally defeated, writes Alys Marshall in ABC News.

Shutting down coal is a matter of conscience — just ask the victims of Mpumalanga’s deadly air

President Cyril Ramaphosa’s energy crisis plan did not mention, even once, the ongoing toxic air pollution being spewed forth by the same coal power stations South Africa is now trying to fix. It’s almost as if the public health emergency that is the Mpumalanga Highveld does not exist, writes Melissa Fourie from the Center for Environmental Rights in the Daily Maverick.

The tragedy of North Birmingham, Alabama

Despite extensive pollution of the local community from old coke ovens, now owned by the family company of West Virginia Governor Jim Justice, Jefferson County Board of Health might settle a potential US$60 million penalty for less than US$1 million, writes Max Blau in Pro Publica.

What if the Biden administration financed replacing every coal plant in the US?

The Biden administration could use the financial tools available under the Inflation Reduction Act to replace the country’s coal fleet by 2030, writes Justin Guay from the Sunrise Project in Energy Monitor.

Campaigns

Hawaii closes its only coal plant

AES Corporation’s 180 megawatt (MW) West Oahu plant, the only coal power station in Hawaii, has closed with the expiry of its power purchase agreement with the local power utility, Hawaiian Electric. In 2017 a proposal by Hawaiian Electric and AES to expand the plant was opposed by the Blue Planet Foundation and rejected by the Hawaii Public Utilities Commission. The commission determined the coal plant’s “potential to significantly increase greenhouse gas emissions to undermine the claims regarding its reasonableness.” The state’s legislature adopted legislation in 2020 banning coal generation after the end of 2022. The plant was first commissioned in 1992 and relied on imported coal from Indonesia. Hawaiian Electric planned on solar and battery storage capacity on the island of Oahu to replace the plant’s supply, but COVID and other disruptions have delayed this. (Bloomberg, Guardian)

Top News

First Nations warn against expansion of Teck Resources Canadian mines: Rich Janssen, the director of natural resources for the Confederated Salish and Kootenai Tribes (CSKT) in Montana, has warned that pollution from Teck Resources’ existing coal mining operations has caused “irreparable” damage to cultural heritage and contaminated waterways. While Teck has argued new water treatment plants will address selenium pollution, it has refused to detail the percentage of the water that will be processed. “From what I’ve seen, they’re doing everything in their power to muddy the waters and slow the process, not release their data,” Janssen said. The CSKT, along with Kootenai Nation in Idaho and Canada’s Ktunaxa Nation, requested water pollution from the existing mines be referred to the International Joint Commission (IJC), a mechanism established under the Boundary Waters Treaty to resolve transboundary disputes. Canada has blocked a request to the IJC. Teck Resources is the world’s second-largest exporter of metallurgical coal. (Missoulian)

Colombian community blocks access to Glencore mine: Representatives from the Wayuu indigenous community and others affected by Glencore’s Cerrejon mine in northern Colombia have blocked access roads to the southern part of the mining operations for six days. Glencore has confirmed that the peaceful blockades have cut production at the mine by 70 per cent. Communities displaced by the mining project argue the company has not honoured provisions in agreements, including on issues such as access to water. London Mining Network expressed concern about the safety of the protestors and called on the company and government to resolve the communities’ grievances. In a separate development, the Minister of Environment and Sustainable Development, Susana Muhamad, has suggested that the new government require mining companies to obtain environmental licenses for mineral exploration to protect the environment and reduce conflict with local communities. The Cerrejon mine is the largest thermal coal export project in Colombia. (Reuters, NB Media, Mining.com)

Bosnia and Herzegovina’s deadly air pollution: A Human Rights Watch report estimates that air pollution from coal for power generation and wood and coal for home heating causes 3300 premature deaths annually in Bosnia and Herzegovina. Bosnia and Herzegovina has the fifth-highest mortality rate from air pollution worldwide. Air pollution in the country is at its worst between October and February. Local government officials acknowledge that the country’s 17 air pollution monitoring stations are sometimes out of service, and many don’t adequately measure PM2.5 fine particle pollution. Five lignite plants in the country have a combined capacity of 2073 MW. (Human Rights Watch)

Indian court finds coal company directors guilty of cheating government: The Central Bureau of Investigation (CBI), India’s anti-corruption agency, said a special court had convicted Himachal Emta Power Limited (HEPL), two company directors and an executive over the allocation of Gourangdih ABC Coal Block in West Bengal. The CBI filed the case in 2014, alleging the company and its officials conspired to cheat the government by misrepresenting the status of the land and the company’s investment in the project. The CBI argued that HEPL was not entitled to the coal allocation. (Tribune India)

Peabody Energy fined over dangerous drilling at US mine: The Federal Mine Safety and Health Review Commission has fined Peabody Midwest US$96,000 and its manager US$6000 for breaching safety standards which could have caused a “catastrophic” methane explosion at its Francisco mine in Indiana. The company is a subsidiary of Peabody Energy. The commission found the company continued with exploratory drilling at the underground mine after it went through into an old mine shaft with methane levels over five per cent by volume. Mine Safety and Health Administration standards require operators to disconnect all equipment from the power source and evacuate the area when methane levels exceed 1.5 per cent by volume. Over five per cent of methane is in the explosive range. Continued drilling or energised equipment could have caused a spark resulting in an explosion. (US Department of Labour)

NSW Government approves major coal mine expansion: The New South Wales Independent Planning Commission has approved the expansion of Mach Energy’s Mt Pleasant mine near Muswellbrook in the Hunter Valley. The company is seeking approval to double mine production to 21 million tonnes annually and extend the project’s life to 2048. Lock the Gate, an NGO campaigning against coal and gas projects, estimates the thermal coal produced by the expansion will add 876 million tonnes of carbon dioxide to the atmosphere over its 22-year life. The final decision on the mine rests with the Federal Minister for the Environment, Tanya Plibersek. (Guardian, Lock the Gate)

Indian Government extends pollution control deadline, again: In response to pressure from power utilities, India’s Ministry of Environment, Forest and Climate Change (MoEFCC) has granted yet another two-year extension for coal power plants to comply with sulphur dioxide emission limits that were first announced in December 2015. The standards for sulphur dioxide, nitrogen oxides and mercury were originally due to come into effect by the end of December 2017 but have been delayed twice. MoEFCC watered down the standards in 2018 and 2020. In the latest announcement, MoEFCC said plants scheduled to retire won’t have to meet the standards until December 31, 2027, with the deadline set one year earlier for plants planning to operate beyond then. Environmental lawyer Ritwick Dutta said that “rather than taking punitive action against violators, all that it [MoEFCC] is doing is succumbing to the dictates of other ministries.” (Hindustan Times)

News

Australia: Centennial Coal seeks to revive the Angus Place Colliery despite its likely impact on the adjoining Greater Blue Mountains World Heritage Area and listed threatened species.

Australia: The Queensland Government has approved the expansion of Fitzroy Australia’s Carborough Downs underground metallurgical coal mine from 1.5 million tonnes a year to 5 million tonnes a year.

Germany: Low water levels in the Rhine River have caused coal shortages for the 465 MW of coal units at EnBW’s Heilbronn plant and Trianel’s 750 MW Lunen plant.

Greece: The Greek gas grid operator DESFA said the closure of seven coal units would be delayed due to the European gas and power industry crisis.

Mozambique: Mozambique’s publicly owned ports and rail company, CFM, has reached an agreement with Etswini (formerly Swaziland) that allows the doubling of South African coal exports via the Goba railway to Maputo port to about 1.2 million tonnes per annum.

Norway: The 125,000 tonnes per year Svalbard mine, which was due to close in 2023, will operate until mid-2025, with the mine owner pressing the council to extend the life of the coal plant to provide a market for low-grade coal. The higher-grade coal from the mine will be exported to Germany.

South Africa: Cabinet approves the Presidential Climate Commission’s Just Transition Framework.

US: The former Greenidge coal plant in New York state was restarted to power a cryptocurrency operation. It tops the EPA list of 170 coal ash dumps potentially below the water table requiring clean-up.

Companies + Markets

Demand for Russian coal falters in key Asian markets: Russian coal exports to key Asian markets have declined, increasing doubts that alternative markets will be found for the estimated 63 million tonnes of coal locked out of the European market after the August 10 ban came into effect. In the first seven months of 2022, Russian exports to Taiwan, Japan and South Korea have fallen by 33.3 per cent, 25 per cent and 3 per cent, respectively. Russia exported about 172 million tonnes of thermal coal in 2021, of which the European Union imported 48 million tons and Japan 16 million tons. It also exported 32 million tonnes of metallurgical coal in 2021. Japan has announced it intends to phase out Russian coal imports gradually. South Korean imports of Russian coal are likely to slowly decline, with the Ministry of Finance stating it would look to buy coal from Australia, South Africa and Colombia. (News.am)

New Mongolian coal railway to China set to open: The 267-kilometre Tavan Tolgoi-Gashuunsukhait coal railway connecting Mongolia to China will open on September 9. Construction on the railway began in December 2019. Mongolian officials estimate the railway could carry between 20 and 50 million tonnes of primarily metallurgical coal to northern China. It will cost about US$8 per tonne to freight coal to China via the new railway, compared to about US$40 per tonne for the current truck-based transport system. COVID-19 restrictions at border crossings dramatically curtailed Mongolian exports to China. However, China has eased restrictions recently and is keen to facilitate the development of Mongolian supplies of metallurgical coal as an alternative to importing Australian cargo. (Sxcoal)

Interest from China and India in coal exports from Afghanistan: A Ministry of Mines and Petroleum official has revealed delegations from China and India have expressed interest in importing coal from Afghanistan. A ministry official said the roads are poor in Badakhshan province, which adjoins western China, making exports through the port at Chah Bahar in Pakistan more likely. The Afghanistan National Standards Authority is proposing to establish a laboratory to certify coal quality to facilitate exports into the global market. Pakistan has recently increased coal imports from Afghanistan as an alternative to high-cost coal available on the seaborne market. Increased exports from Afghanistan have had a knock-on effect on domestic prices, with local buyers complaining the price of coal in Kabul has surged from 9,000 afghanis (US$102) per tonne last year to 15,000 afghanis (US$171) per tonne. (ToloNews, Pajhwok Afghan News)

Anglo American automates underground longwall operation: Anglo American has fully automated the operation of longwall mining equipment at its underground Moranbah North metallurgical coal mine. The longwall mining equipment is fully controlled from a surface operations centre at the mine. Longwall mining equipment at the company’s other two mines — Grosvenor and Aquila — will also be automated. The company promotes using the technology as a safety measure that prevents employees from being exposed to the danger of underground operations. Industry analysts promote automation, including automated drill rings and remote-controlled trains and trucks, to achieve significant increases in staff productivity and reduce the number of employees. (International Mining)

Germany moves to cap power sector profits: The German Government has announced it will provide a €65 billion (US$64.8 billion) package to counter the economic and political impact of soaring energy prices caused by high gas prices and Russia cutting gas exports to Germany. The package includes one-off heating payments to households to cover the September to December period and restructuring prices paid to power utilities, referred to as a brake on electricity prices. The government is proposing to cap revenue on electricity from renewables, coal and nuclear generation. The aim is to capture the price difference between a technology-specific cap and the electricity spot price with the proceeds used to reimburse consumers. The objective is to prevent utilities from reaping super-profits from supplying electricity from projects with no or low fuel costs. Energy-intensive industries will be eligible for financial support if consumers cannot absorb higher costs. The European Union energy ministers will likely discuss a similar proposal at a September 9 meeting. (Clean Energy Wire, Reuters)

Power station consortium seeks to take over West Australian coal miner: The Kansai Electric and Sumitomo Corporation consortium, which owns the 466 MW Bluewaters power station in West Australia, has launched legal action to appoint a controller to operate the Griffin coal mine which supplies the plant. Griffin, owned by the Indian company Lanco Infratech, reportedly has debts of A$1 billion (US$671 million). The Japanese consortium said Griffin has failed to reliably supply the contracted volume of coal, forcing power generation to be curtailed. Both projects face an uncertain future. Earlier this year, the Western Australian government-owned power and water utilities, Synergy and the Water Corporation announced they are unlikely to extend their contracts which expire in 2025. That would leave Newmont’s Boddington Gold Mine, with an approximate demand of 150 MW capacity, as the plant’s sole customer. In late 2020 Sumitomo reported a US$241 million loss on the plant and wrote off its US$250 million investment. (ABC News)

Report finds CCS projects on coal units have a poor track record: An Institute for Energy Economics & Financial Analysis report finds that carbon capture and storage projects in the power sector have a poor technical and economic track record. The report argues that the technology will not be a “quick fix” for power sector emissions even with government incentives. The report – which reviews the experience with the Petra Nova plant in Texas, the Kemper plant in Mississippi and the Boundary Dam plant in Canada – notes that technical problems have been one of the most significant barriers. The Petra Nova and Boundary Dam plants operated significantly below their target capture rates. (New Scientist, Institute for Energy Economics & Financial Analysis [Pdf])

Moody’s lifts thermal coal price and cuts metallurgical coal estimate: Moody’s Investors Service has reduced the forecast prices for metallurgical coal over the next year from US$275 per tonne to US$250 per tonne due to slowing global growth, especially in China. The financial services firm increased its estimate of seaborne thermal coal from US$150 per tonne to US$250 per tonne. (SteelOrbis,  Moody’s [reg req’d])

Resources

Managing the social consequences of the transition away from coal: the case of clean heating in Shanxi Province, China, The Oxford Institute for Energy Studies, August 2022. (Pdf)

This 9-page paper examines the challenges of households in Shanxi Province in northern China switching from using coal for home heating and cooking to clean energy. In 2017 about 200 million tonnes of low-grade coal were used for home heating.

The international conference on fossil fuel supply and climate policy, The Queen’s College, Oxford, UK, September 26–27, 2022.

Recordings will be available after the event if you can’t attend this conference in Oxford, UK.

Financing Putin’s war: Fossil fuel exports from Russia in the first six months of the invasion of Ukraine, Centre for Research on Energy and Clean Air, September 2022. (Pdf)

This 27-page report tracks Russia’s fossil fuel exports since the start of the war in Ukraine and estimates that €13 billion (US$12.9 billion) of the €158 billion (US$157 billion) has been from coal sales.

Australian thermal coal exports outlook – Volumes set to fall amid accelerating energy transition, Institute for Energy Economics & Financial Analysis, September 2022. (Pdf) (The Executive Summary is here.)

This 40-page report concludes that despite the short-term bump in demand for Australian coal due to the shift away from Russian supplies, the long-term outlook for Australian thermal coal exports is declining rapidly. The report finds demand from Japan, South Korea and Taiwan will decrease first.