July 2, 2020
Issue 329  |  View Past Issues

Editor's Note

As the impacts of the COVID-19 induced recession mount, the pressure to shift away from coal generation is growing. The United Nations Secretary-General, Antonio Guterres, is adamant that post-COVID economic stimulus plans should be coal-free. In the US, two more coal units have been slated for early retirement. In Spain, almost half the country’s entire coal fleet was retired this week. In Pakistan, a proposed coal plant has been cancelled at a time that the costs of generous capacity payments grow.

As the structural shift away from coal gathers momentum, the global seaborne market is reeling, with prices falling dramatically. In Indonesia, the world’s largest exporter of thermal coal, a peak coal industry lobby group is calling on its members to cut production as it estimates demand may fall by 60 million tonnes this year. A normally conservative Australian government agency estimates seaborne thermal coal demand will fall by 100 million tonnes.

There may be worse yet to come. A new report estimates that the plunging cost of renewables and batteries means that the existing coal plants that aren’t already uncompetitive will be within a few years. Pension funds such as in Sweden are accelerating their divestment from the fossil fuel production and power generation sector, recognising the increasing risks of stranded assets.

For all the pressures to shift away from coal, there are still regions and companies wedded to pursuing new coal projects. New coal plant proposals in China have boomed in the first half of the year, with approvals amounting to more capacity than was approved in in 2018 and 2019 combined. In South Korea, the government-owned utility KEPCO has decided to proceed with an investment in a proposed 2000 megawatt (MW) coal plant in Indonesia.

Bob Burton


Germany's coal-exit law, or the politics of inertia

Germany’s draft coal-exit law would allow highly polluting lignite to burn well into 2038 – long after 2030 when coal-fired power plants in the OECD need to be phased out to meet Paris Agreement goals, write Gaurav Ganti and Bill Hare from Climate Analytics.

Seaborne coal prices slammed on slumping India imports, China fears

Seaborne coal prices in Asia have plunged to the lowest in more than a decade as shipments to the region’s top importers, such as India, have been hit by the COVID-19 recession, writes Clyde Russell in Reuters.


Almost half of the Spanish coal plants shut down

Seven out of Spain’s 15 coal plants, with a combined capacity of 4630 MW, closed on June 30 to comply with the European Union’s emissions standards adopted in 2017. A further four plants, with a combined capacity of 3092 MW, have filed for permission to close and are likely to cease generating in 2021 or 2022. The closures have been spurred by a mix of the high carbon prices, the comparatively low cost of gas, falling cost of renewables generation and pressure on investors to divest from fossil fuels. “The way things are going, I think there will no longer be any coal generation by 2025,” said Tatiana Nuno, from Greenpeace. (El Pais)

US utilities accelerate coal exit plans

Florida Power & Light will close one of the four coal units at Plant Scherer in Georgia on January 1, 2022 after reaching an agreement with a municipal utility that owns a minority share in the 848 MW unit. The Sierra Club has welcomed the announced and argues that the closure of a unit at the plant, which was commissioned in 1982, is another indication that “even the nation's biggest coal plants don't make economic sense”. The other three units at the plant, which have a combined capacity of 2673 MW, will remain online but are subject of legal action over whether the plant owners or power consumers will pay for coal ash clean-up costs. In Colorado, the Colorado Springs Utilities Board has voted to close the 207 MW Martin Drake Power Plant by 2023 and the 207 MW Ray Nixon Power Plant by 2030. In 2015 the board voted to keep the Martin Drake plant operating until 2035. (Utility Dive, Sierra Club, Colorado Springs Business Journal)

Top News

Pakistan abandons a proposed Chinese-backed coal project: Pakistan’s Cabinet Committee on Energy has confirmed the proposed 700 MW Port Qasim Datang power station has been abandoned. The project was first proposed in 2016 by K-Electric, Pakistan’s largest power utility, with China Datang and China Machinery Engineering Corporation holding 49 per cent stake in the imported coal plant. The collapse of the project was in part due to concerns the project was inconsistent with the ban on new imported coal projects. It was also determined that other generation options, including gas, could be used to meet demand in K-Electric’s supply area. (Express Tribune, Global Energy Monitor)

China coal plant approvals surge: New data reveals that in the first half of 2020 Chinese utilities have proposed 40,000 MW of new coal plants. Between January and June 15 an estimated 17,000 MW of new coal plant capacity was approved, which is more than all the coal plants permitted in 2018 and 2019 combined. A report by Global Energy Monitor and the Centre for Research on Energy and Clean Air notes proposals surged after the COVID-19 shutdown indicating provinces are pushing new coal plants as a short-term form of economic stimulus. Recently, the central government has indicated concern about the scale of new proposals. China’s coal production in the first five months of 2020 has increased by 0.9 per cent compared to the same period in 2019. In May, China’s air pollution surged to be higher than before the COVID-19 crisis. (Financial Times, CarbonBrief)

South Korean utility decides to proceed with Indonesian project: The board of KEPCO, the publicly owned South Korean utility, decided at a special June 30 board meeting to proceed with its plan to invest in the proposed 2000 MW Jawa 9 & 10 coal project in Indonesia. Opposition to the project by Indonesian civil society groups has spurred opposition to South Korean agencies’ support for new coal plants in Asia. At its June 26 board meeting KEPCO deferred making a decision. The Korea Development Institute, an agency tasked with reviewing proposed investments by government agencies, found KEPCO would lose US$7 million on its proposed $51 million investment in the project. KEPCO’s decision has been criticised by civil society groups and prompted a protest in front of the South Korean embassy in Jakarta. (Yonhap News Agency [Korean], Eco-Business, Korea Times)

Taiwanese utility fined over coal plant restart as council threatens legal action: The Taichung City government has fined Taipower, a Taiwanese government-owned utility, $2 million New Taiwan dollars (US$67,751) for restarting one of its ten 550 MW units shut down by the national government to cut pollution. City officials have warned that Taipower could face fines of between $8 million and $20 million New Taiwan dollars (US$270,000–677,000). Earlier in 2020 the national government overturned the city’s revocation of permits for the two units, leading Taipower to claim it is allowed to operate the units as summertime power demand increases. The city has appealed the national government’s decision but the case has not yet been resolved. (FocusTaiwan)

German Government finalises draft law for coal exit by 2038: The German Cabinet has agreed to amendments to the three coal-exit laws before parliament with one change allowing hard coal plant operators a higher maximum price in auctions for the closure of coal plant capacity before 2027. Lignite plant owners will be paid €4.35 billion (US$1.12 billion) for the closure of plants on a fixed schedule to 2038 though uneconomic plants will not be artificially kept online if higher carbon prices or lower power prices render then uneconomic sooner. The option to bring the final exit date forward from 2038 is subject to review but only after 2027. Debate on the laws is set to restart on July 3. An estimated 100 activists occupied the Garzweiler and Janschwalde mines in protest against the slow phase-out deadline. (Argus, Clean Energy Wire, The Local)

Indian Government drops one coal block from auction process: The Minister for Coal, Mines and Parliamentary Affairs, Pralhad Joshi, has announced the Bander coal bock near the Tadoba-Andhari Tiger Reserve in Maharashtra state has been excluded from the 41 coal blocks being auctioned by the national government. The inclusion of the block led to protests by civil society groups. While some commentators have touted the prospect that international coal companies may bid on projects, the Institute of Energy Economics and Finance notes the major companies mentioned — Peabody, BHP and Rio Tinto — are either exiting coal or are already in financial distress. (Indian Express, Down to Earth)

“There is no good reason for any country to include coal in their COVID19 recovery plans. This is the time to invest in energy sources that don’t pollute, generate decent jobs and save money,”

said Antonio Guterres, the United Nations Secretary-General.


Australia: Victorian Government report finds there is insufficient water for Latrobe Valley coal pits to be turned into lakes when mining is completed.

Australia: Origin Energy’s 2800 MW Eraring coal plant utilisation has fallen by 20 per cent as renewables suppress wholesale prices and power demand drops by 10 per cent due to COVID-19.

Australia: Health industry superannuation fund to divest from all companies that earn over 15 per cent of revenue from thermal coal.

Czech Republic: A spike in COVID-19 cases is centred on employees of the coal mining company OKD and their families and contacts.

Europe: European Union launches its online Just Transitions Platform for coal regions.

India: Tata Steel suspends its Jamadoba coal mine in Jharkhand state after the mine manager tested positive for COVID-19.

India: US-based utility AES has sold its 49 per cent stage in the 1700 MW Odisha Power Generation Corporation 1&2 plant to Adani.

Israel: Coal generation on track to fall to 24.9 per cent in 2020 from 30 percent in 2019.

Poland: In the first five months of 2020, coal production fell by 13.4 per cent to 22.7 million tonnes.

Russia: Businessman Roman Trotsenko has bought a 75 per cent stake in the Arctic Mining Company which has a proposed coal mine on the Taimyr Peninsula.

Spain: Endesa has approved a 700 MW solar and wind farm on the site of the idled Compostilla coal plant.

South Africa: Eskom says the 4764 MW Medupi plant will be completed this year and the 4800 MW Kusile plant commissioned by 2023.

Companies + Markets

Report estimates existing coal plants’ competitiveness rapidly eclipsed by renewables: A report by the Rocky Mountain Institute and others estimates new renewable generation is not only cheaper than new coal plants just about everywhere but is also cheaper than 39 per cent of the world's existing coal capacity. It estimates the amount of uncompetitive coal capacity will increase to 60 per cent in 2022 and to 73 per cent in 2025. The report does not factor in a cost for the health, climate, or environmental impacts of coal plants. The report estimates 17 per cent of India’s coal fleet or 48,000 MW capacity is already uncompetitive, with the share rising to 50 per cent in 2022 and 85 per cent in 2025. In China, the report estimates 43 per cent of coal plants, accounting for 492,000 MW of capacity, are already uncompetitive with that rising to 93 per cent or 1081 gigawatts by 2020. (Economic Times)

Swedish pension fund to sell off coal stocks: Sweden’s largest pension fund, AP7, which has over US$70 billion under management, will sell its assets in all companies that generate over five per cent of their production from the mining or generation of power from coal and other fossil fuels. AP7 said the divestment will begin immediately with the aim of achieving carbon neutrality by 2030. The fund said divestment from fossil fuels was being driven by the fund’s clients and recognition that “the risk of fossil investing is estimated to increase substantially”. (Business Day)

Australian agency forecasts 100 million tonne drop in seaborne thermal coal trade: In its latest Resources and Energy Quarterly, the Australian Government’s Office of the Chief Economist forecasts demand in 2020 for thermal coal in the seaborne market will fall by 100 million tonnes or almost 9 per cent. It estimates most of the decline will be for coal from Indonesia and US exporters. It estimates the benchmark Newcastle 6000 kilocalories per kilogram coal will sell for US$56 a tonne in 2020 and gradually increase to US$65 a tonne in 2022. The agency estimates China’s thermal coal imports are likely to fall over the rest of 2020 to 230 million tonnes, down from 241 million tonnes in 2019. It also estimates India’s thermal coal imports will fall by over 40 million tonnes in 2020 to 167 million tonnes. (Department of Industry, Science, Energy and Resources [Pdf])

Indonesia coal lobby call on members to slash production: Despite Indonesian coal production between January and May being 20 million tonnes lower than 2019, the Indonesian Coal Mining Association (APBI) estimates exports could fall by up to 60 million tonnes due to the collapse in Chinese and Indian coal demand. APBI has called on its 89 member companies to cut production by 40–50 million tonnes between June and December to head off a collapse in prices. APBI has also flagged that domestic Indonesian coal demand could amount to 128–138 million tonnes, far lower than the 2020 forecast of 155 million tonnes. In 2019 domestic Indonesian coal consumption was 138 million tonnes. The Minister for Energy and Mineral Resources, Arifin Tasrif, told parliament that reduced Chinese and Indian demand would have “a quite serious” impact on coal production. (Argus, Reuters)

South African court rules in favour of Eskom costs claim: South Africa’s High Court has set aside a decision by the National Energy Regulator of South Africa (NERSA) which limited the costs Eskom could recover from customers for three financial years to June 30 2017. Eskom had sought 66.6 billion rand (US$3.8 billion) but NERSA ruled it could only recover 32.69 billion rand ($US1.9 billion) from the regulatory clearing account that was established to allow for differences between the utility’s forecast revenue and actual costs. Eskom argued that NERSA inappropriately disallowed the utility’s bid to recover funds for changes in coal prices, power supplied by independent power producers, capital expenditure costs and lower than projected revenue. The ruling means NERSA will have to reconsider Eskom’s application for those years. Increased cost recovery will push power prices up, potentially further undermining demand. (Reuters)

Mongolian Government and Rio Tinto reach agreement on new coal plant: Turquoise Hill Resources, a subsidiary of the global mining company Rio Tinto, has reached agreement with the Mongolian Government to fund and build a state-owned 300 MW coal power plant on the Tavan Tolgoi coalfield to supply power for the Oyu Tolgoi copper and gold mine. The mine is currently powered through a connection to the grid in Inner Mongolia in China. Under the terms of its 2009 agreement to develop the mine, the company agreed to source power locally, with the Mongolian Government hopeful a new plant will help underpin the development of the Tavan Tolgoi coalfield. Under the latest agreement, the parties aim to complete a power purchase agreement by the end of March 2021, begin construction of the plant by July 1, 2021 and have the plant commissioned within four years. (Financial Times, Turquoise Hill Resources [pdf])

Renewable surge exceeds Vietnam’s power plan targets: At a June 22 meeting on power development Vietnam’s Prime Minister, Nguyen Xuan Phuc, emphasized the revision of the 2021–2030 Power Development Plan to include more renewables capacity. The revised plan allows for 7000 MW of new wind capacity. The National Steering Committee for Power Development has noted that solar and wind power projects listed in the revised plan will account for 26 per cent of the expected capacity by 2030, higher than the 15–20 per cent target set by the Politburo of the Communist Party of Vietnam in February. The increase in the renewables target followed increasing community opposition to new coal plants, difficulty obtaining finance and delays. (Nang luong Viet Nam [Vietnamese],  Forbes)


A New Coal Boom In China, Global Energy Monitor and Centre for Research on Energy and Clean Air, June 2020. (Pdf) (The report is also available in Mandarin here.)

This 4-page briefing note analyses the latest data indicating a boom in coal plant proposals in China.

National Economic Transition, Just Transition Fund, June 2020. (Pdf)

This 14-page report by a coalition of US labor, First Nations and local groups outlines a key elements needed to build sustainable local communities in areas most affected by the rapid downturn in coal production.

How to Retire Early: Making Accelerated Coal Phaseout Feasible and Just, Rocky Mountain Institute, Carbon Tracker Initiative, and Sierra Club, June 2020. (Registration required.)

This 60-page report analyses the finances of 2500 coal plants and finds many are already uncompetitive and consumers will increasingly benefit from the early retirement of the coal fleet.

AIRPOLIM-ES: Air Pollution Impact Model for Electricity Supply, New Climate Institute, June 2020.

This web-based interactive tool allows users to explore the emissions and health impacts of coal-fired power generation, though its coverage is currently limited to Argentina, Indonesia, Kenya, Mongolia and Thailand.