December 13, 2018
Issue 258  |  View Past Issues

Editor's Note

Far from the climate negotiations in Poland, setbacks for the coal industry continue to mount. In Australia, a New South Wales Government agency has recommended the rejection of a new underground mine proposed by a subsidiary of South Korean steel maker POSCO. In the US, a court has dismissed a legal challenge by the company proposing a coal export terminal.

Elsewhere regulators are playing catch-up on the consequences of past bad decisions. In Canada, regulators are hoping to stabilise selenium pollution of waterways from a series of open cut coal mines, at best by early next decade. In India, the Central Pollution Control Board wants power utilities to comply with a directive requiring the reuse of coal ash from coal power plants. However, one utility is objecting to the cost of compliance.

Coal power is facing other economic shocks too. In Maharashtra, the public power generator, which has built its business model around the ready supply of cheap domestic coal, is complaining power prices will have to increase to cover the high cost of coal imports. Meanwhile, a new Greenpeace report estimates the Indian Government’s 5-year delay on the implementation of coal power pollution standards could cause up to 380,000 premature deaths.

Other analysts are sounding the alarm bells about coal too. The European Bank for Reconstruction and Development has launched a report warning that for five Western Balkan countries, renewables are a better option than building new coal power units. In its 2019 annual outlook for the Asian power sector, the consultancy company Moody’s raises some red flags for power utilities in Japan and South Korea.

In South Africa, Eskom has been staggering from crisis to crisis. Last week, many of its major coal plants had breakdowns. Eskom has now launched an investigation into significant technical problems at the huge Medupi and Kusile plants. The Japanese contractor Hitachi has been singled out for special mention. In Indonesia, a new Greenpeace report finds Japanese companies are playing a major role in trying to subsidise new coal plants.

Bob Burton


China, Japan & South Korea lead global push to expand coal plants

The largest countries backing continued roll-out of new coal plants are China, Japan, and South Korea, writes Joshua S Hill in Clean Technica.

The rising tide of selenium pollution from coal mines in British Columbia’s Elk Valley.

Selenium pollution from Teck’s Elk Valley coal mines has hit water supplies, neighbouring properties and a declining species of trout, but the company does not plan to begin work to cut its emissions until the 2030s, writes Carol Linnett in The Narwhal.

Top News

Australian regulator urges rejection of POSCO mine: In a scathing assessment of the proposed Hume Coal project in New South Wales the Department of Planning and Environment has recommended the project be rejected. The department wrote that the impact on groundwater from the proposed underground metallurgical coal mine south west of Sydney would be “the most significant for any mining project that has ever been assessed in NSW.” The project is being proposed by a subsidiary of the Korean steel company, POSCO. The department received over 13,000 submissions on the proposed 3.5 million tonne per annum mine with the bulk objecting to the project on environmental and social grounds. (ABC News, Sydney Morning Herald)

US court rejects coal port developer’s claims: US District Court Judge Robert J. Bryan has dismissed claims by Lighthouse Resources and BNSF Railway that the State of Washington’s rejection of a water quality permit for the proposed Millennium Bulk Terminals coal terminal was in breach of federal laws. Lighthouse Resources, the parent company of Millennium Bulk Terminals, had claimed that rejection of the water quality permit was in breach of the Interstate Commerce Commission Termination Act and Ports and Waterways Safety Act. The decision, which is the latest legal rebuff for Lighthouse Resources, has been welcomed by the Power Past Coal coalition. (Power Past Coal)

Deadly toll from India’s delay in enforcing coal plant pollution standards: Modelling by Greenpeace India estimates that 76,000 premature deaths could have been avoided over the last year if the Indian Government had stuck to the original December 7, 2017 deadline for compliance with new coal power pollution standards. Following lobbying by public and private power producers, the government extended the deadline for compliance with the new standards by five years to the end of 2022. The standards were first announced, after a long period of consultation, in 2015. The Central Pollution Control Board estimated that the standards would have cut sulphur dioxide and nitrogen oxides emissions by 48 per cent and fine particle pollution by 40 per cent. Greenpeace estimates that a 5-year delay in enforcing the standards could cause an estimated 380,000 premature deaths without considering pollution from new plants commissioned before December 2022. (Economic Times, Greenpeace India)

Two Thai coal plants remain on hold: Thailand’s 2018 Power Development Plan confirms two controversial proposed coal plants — the 600 megawatt (MW) Krabi project and the 2200 MW Thepa plant — remain on hold. The plan proposes the projects be replaced in part by two 700 MW gas plants in the country’s south. The plan also proposes coal’s share of generation be cut from the 23 per cent proposed in the 2015 plan to 12 per cent in the current one. The new plan also proposes up to 10,000 MW of solar capacity be commissioned by 2037. The coal plant proposals, which were included in the 2015 power plan, were strongly resisted by local communities, resulting in the military government proposing new environmental reviews be undertaken. Local residents and environmental groups fear that the projects, proposed by the Electricity Generating Authority of Thailand, could still potentially be revived in the next year or two. (Bangkok Post, The Nation)

Pakistani court orders investigation into failed coal gasification project: Pakistan’s Supreme Court has ordered the country’s anti-corruption agency, the National Accountability Bureau, to investigate Dr Samar Mubarakmand and others involved in the proposed Thar underground coal gasification project in Sindh province. The proponents claimed the project would have 100 MW capacity. A report prepared for the court by the Auditor General of Pakistan found that 4.69 billion rupees (US$33.75 million) had been spent on the project but no power generated. “Who will be held accountable for the billions of rupees that were spent?” asked Chief Justice Mian Saqib Nisar. (Dawn)

School students protest Adani’s Australian plans: Thousands of students at rallies in major Australian cities have protested against support for Adani’s proposed Carmichael coal project by both the Liberal National Party government and the opposition Labor Party. The previous week an estimated 15,000 students walked out of school to attend rallies calling on the Australian Government led by Prime Minister Scott Morrison to take action on climate change. Morrison denounced the school strike. However, a national opinion poll after the strike revealed 62.7 per cent of those surveyed supported the right of the students to urge the Morrison Government act on climate change. (SBS, ABC News)

Japan pushing coal on Indonesia: A new report by Greenpeace finds that Japan is currently funding the construction of eight new coal power units in Indonesia, with a further four units under consideration. The report rebuts the claim that Japanese support for the projects boosts access to energy as eight of the 12 projects are in the area served by the Java-Bali grid which already has 99 per cent access and currently has 40 per overcapacity. As a result of overcapacity, mounting debts and depreciation of the rupiah, the publicly owned utility PLN is facing growing financial problems. Japan’s largest banks — MUFG Bank, Mizuho Bank and Sumitomo Mitsui Banking Corporation — are involved in funding the projects. (Greenpeace Southeast Asia)


Australia: Energy sector union backs tougher pollution controls on brown coal plants in Victoria’s Latrobe Valley.r.

Australia: Bengalla Coal company, part-owned by Mitsui and Taipower, fined A$15,000 (US$10,800) for dust pollution.

Indonesia: Government warned it could face lawsuit if it fails to take action on air pollution within 60 days.

Myanmar: Families protest one-month prison sentence for villagers who blocked road to coal-fired cement plant under construction.

Pakistan: Coalition of groups plans a two-week march in February 2019 to protest coal power projects.

South Korea: Four charged with illegally importing North Korean coal via Russia in breach of United Nations sanctions.

Tanzania: Kibo Energy agrees to a four-month deadline extension for Chinese construction company SEPCOIII to decide on whether it will continue its involvement with the proposed 300 MW Mbeya coal plant.

US: UK investor files legal claim against international law firm Baker McKenzie over its role in a failed attempt to recover ownership of Gramoteinskaya coal mine in Siberia.

Companies + Markets

Moody’s sounds note of caution for Japanese and South Korean utilities: Moody’s notes that carbon transition risks “are rising” and that the cash flows of power generation companies “will weaken gradually as both generation from renewables and environmental compliance costs are rising”. The ratings agency considers that the carbon transition risk will not emerge as a significant factor in the next 12–18 months “because renewable power growth is unlikely to outpace power demand growth in Asia”. However, it notes the credit metrics of South Korean utilities “are weakening” while Japanese generators face more competition as market deregulation erodes regional monopolies. Moody’s rates the outlook for both South Korean and Japanese power sectors as “negative” due to “greater regulatory challenges.” (Moody’s)

US utility moves away from coal: PacifiCorp, a subsidiary of Berkshire Hathaway, has revealed that its preliminary internal analysis shows that 13 of the 22 coal power units it operates at plants in Arizona, Montana, Colorado, Wyoming and Utah are more expensive to run than alternatives. PacifiCorp found that it would save US$317 million if it closed five coal units in Wyoming and Colorado by 2022 instead of running them until their scheduled retirement dates between 2029 and 2037. PacifiCorp is expected to provide more details of its coal plants assessment at a stakeholder meeting on January 24. In September, PacifiCorp rebuffed legal action by the Sierra Club, which had sought public disclosure of the analysis before the Oregon Public Utilities Commission finalised its integrated resource plan. PacificCorp’s coal plants serve Oregon and other states. A Sierra Club report released in July estimated that 20 of PacifiCorp’s 22 coal units were uneconomic compared to alternatives. (Utility Dive)

EBRD pushed Western Balkans countries to dump lignite: A new European Bank for Reconstruction and Development (EBRD) paper argues that with five of the six countries in the Western Balkans —Bosnia and Herzegovina, Macedonia, Kosovo, Montenegro and Serbia — building or considering new lignite-fired plants, a better option would be to “significantly increase” solar, wind and sustainable biomass capacity. The Western Balkans countries currently have almost 9000 MW of coal plant capacity. The EBRD argues all the Western Balkans countries currently suffer from high levels of air pollution from old coal plants but replacing old coal plants with new ones, even if less polluting, would be uneconomical due to rising carbon prices. It argues gas may also play an increasing role if new pipelines are developed. (EBRD)

South Africa launches audit of work on Medupi and Kusile plant: South Africa’s Minister of Public Enterprises, Pravin Gordhan, has revealed Eskom is investigating substandard work at the near-completed 4764 MW Medupi power station and the under-construction 4800 MW Kusile power station. The Medupi plant was originally costed at 69.1 billion rand (US$4.8 billion) in 2007 but the latest estimate is that it will cost 145 billion (US$10.7 billion) by the time the last unit is commissioned in 2020. Gordhan specifically singled out Hitachi for criticism over what he claimed was substandard work. An internal Eskom report found that flaws in three units at the two plants had taken 1000 MW of capacity out of the system last week and contributed to load shedding. Last week Eskom experienced failures at every single one of their major coal power stations. (Fin24, Business Report, City Press)

Big investors increase coal holdings after Paris Agreement: A report by InfluenceMap, a UK non-profit group, has found that major investors, including companies such as Blackrock and Axa, have increased their thermal coal assets by one-fifth between 2016 and 2018. The Paris Agreement was agreed to in December 2015. BlackRock has the largest absolute holdings in thermal coal, followed by Vanguard, JPMorgan and State Street. Axa, a major French insurance company, which has announced it aims to divest from coal, has doubled its thermal coal investments since the Paris Agreement was negotiated in December 2015. (Financial Times, Influence Map)

High costs of imported coal pushing Indian power prices up: Maharashtra State Power Generation Company (Mahagenco) has warned that its need to import up to one-third of its coal requirements from the global market due a shortage of domestic coal supply will push up the cost of power. Mahagenco says Indian coal costs an average of US$48.50 per tonne, half the cost of coal from the global market. The utility estimates that importing 2 million tonnes of coal will cost it an additional 7 billion rupees (US$97 million) and push the average generation cost up by over 7 per cent. (Times of India)

Indian agency directs compliance on fly ash use by December 31: The Central Pollution Control Board has directed all state pollution control boards to ensure compliance with the national directive requiring the reuse of fly ash from power stations by December 31. The Indian Government first unveiled a policy of using fly ash in other uses in 2009 but it was largely ignored. In January 2016, the Ministry of Environment Forest and Climate issued a notification requiring the use of fly ash in cement and brick manufacturing, road construction, land reclamation projects and as “soil conditioner in agriculture”. The notification requires power generators to cover the transport cost to users within 100 kilometres of the plant and split the costs if the customer is between 100 and 300 kilometres away. It has been estimated that coal plants in India create about 170 million tonnes of fly ash a year. Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited, a publicly owned power utility, wants the transport costs formula changed unless the price it is paid for electricity is increased. (Times of India, Hindustan Times)


How can the Western Balkans electricity mix be made sustainable? European Bank for Reconstruction and Development, December 2018. (Pdf)

This 4-page briefing paper outlines the case against the construction of new coal plants in the Western Balkans and backs increased investment in renewables.

Uncertain and Harmful: Japanese Coal Investments in Indonesia, Greenpeace Japan, December 2018. (Pdf)

This 22-page report details Japan’s role in financing coal projects in Indonesia despite growing public opposition and deteriorating economic viability of projects.

Health & environmental benefits of implementing the emission standards for coal-based TPPs, Greenpeace India, December 2018. (Pdf)

This 4-page analysis estimates that the 5-year delay in the enforcement of pollution control standards on coal plants is likely to be responsible for an estimated 380,000 avoidable deaths in India.

Pakistan’s Power Future: Renewable Energy Provides a More Diverse, Secure and Cost-Effective Alternative, Institute for Energy Economics and Financial Analysis, December 2018. (Pdf)

This 38-page report argues that Pakistan’s current energy plan is too reliant on fossil fuels while renewables could supply 30 per cent of generation by 2030 at lower cost.