August 6, 2020
Issue 333  |  View Past Issues

Editor's Note

A new report reveals that in the first half of 2020 total coal plant capacity declined for the first time on record. Whether the trend continues depends largely on decisions made by the Chinese Government. The report comes as the Bangladeshi Government is considering scrapping proposed coal plants not already under construction. In India, JSW, one of the few private companies looking to buy stressed coal plants, has announced it will now focus on renewables.

Meanwhile, the Polish Government has backtracked on its plan to close two loss-making coal mines after unions objected. Even so, it has outlined a plan to restructure three power utilities into two, with one to hold all the coal plants. In India, the central government has bowed to objections from civil society groups and the Chhattisgarh Government and excluded five coal blocks in the Hasdeo Arand forest from the list of areas to be auctioned off.

In the US it was revealed that the now-bankrupt coal company Murray Energy was one of those that played a role in helping elect candidates supporting the now-deposed Speaker of the House of Representatives. In the wake of the Ohio dark money scandal, questions are also being asked about the political spending of other utilities across the country. In South Africa, Eskom has launched a bid to recover US$220 million from former directors and executives over the use of the utility’s funds to buy the Optimum coal mine for a Gupta family company. The Guptas and an associate are also the subject of the recovery action.

While the now-mothballed Petra Nova carbon capture and storage project was widely touted as a success story for the beleaguered technology, a new report cautions that the failure to disclose data on key issues should be a warning for investors considering other projects.

Bob Burton


The global coal fleet shrank for first time on record in 2020

The world’s fleet of coal-fired power stations has declined for the first time on record, with more capacity retired in the first half of 2020 than the amount opened, writes Christine Shearer from Global Energy Monitor in Carbon Brief.

When utility money talks

Recent US power industry scandals, such as in Ohio and Indiana, illustrate that citizens need to counter the dirty money in politics that keeps dirty energy projects alive, writes Justin Gillies in the New York Times.

In a dispute over a Colombian coal mine, COVID-19 raises the stakes

Colombia’s largest Indigenous group, the Wayuu, want the operation of the Cerrejon mine suspended to cut pollution and control the spread of COVID-19, writes Lise Josefsen Hermann in Undark.

Top News

Coal capacity declined in first half of 2020: Global coal power capacity declined by 21,200 megawatts (MW) in the first half of 2020 with the largest changes being the closure of 8300 MW in European Union countries and 5400 MW in the US, according to a new report by Global Energy Monitor. Over the same period 18,300 MW of new capacity was commissioned, of which 11,600 MW was in China, resulting in a 2900 MW net decline over the period. Between 2010 and 2019 new coal plant capacity has increased on average by 25,000 MW every six months. At present 189,800 MW of coal power capacity is still under construction. In the first half of 2020 China accounted for 90 per cent of the 59,400 MW of newly proposed capacity and 86 per cent of the 15,000 MW of new construction. With China’s existing coal plants already running at just 50 per cent utilisation rate, the completion of plants already under construction will add to the financial stress on utilities and waste scarce capital. (Reuters, Guardian, Global Energy Monitor)

Bangladesh reviews proposed coal plants: Bangladesh’s Minister of Power, Energy and Mineral Resources, Nasrul Hamid, has announced the government is “reviewing how we can move from coal-based power plants” but supports the completion of three plants currently under construction. Bangladesh is one of the top countries for proposed coal plants with up to 26 more plants proposed in recent years with a combined capacity of 28,000 MW. Civil society groups have opposed the construction of coal plants due to environmental and social impacts; Bangladesh is one of the most climate change exposed countries. (China Dialogue)

Murray Energy donated to group at heart of US subsidy scandal: Murray Energy, a now-bankrupt US coal company, contributed US$100,000 in October 2016 to Hardworking Ohioans, a group obliquely referred to in the Department of Justice indictment filed in support of bribery and racketeering charges against the Ohio Speaker Larry Householder and four Republican lobbyists. The indictment referred to “Dark Money Group 1” as having paid for campaign advertising that “targeted rivals of candidates aligned with Householder” ahead of the November 2018 Ohio election. Householder, with the support of candidates elected with his financial backing, pushed through legislation subsidising loss-making nuclear and coal plants. The Ohio scandal has led to increased attention on other energy industry funded dark money groups. In Michigan, Citizens for Energizing Michigan’s Economy, which is backed by the utility Consumers Energy, which operates five coal plants, is actively campaigning in support of four Republican candidates and one Democratic Party candidate in primary contests. (Cincinnati Enquirer, Energy and Policy Institute)

Eskom launches legal action to recover debts from former executives and Guptas: The Special Investigations Unit (SIU), a government agency to investigate maladministration, and Eskom have commenced legal proceedings to recover as much as 3.8 billion rand (US$220 million) they allege was “illegally diverted” from Eskom in 2015­­–16 to help Tegeta Resources & Exploration, a company owned by the Gupta family, to buy Optimum Coal from Glencore. The Optimum mine supplied Eskom’s Hendrina power station. The legal action names four former utility executives, three Eskom board members, former Minister of Mineral Resources, Mosebenzi Zwane, and three members of the Gupta family and an associate as defendants. (Fin24, Eskom)

Indian Government excludes Hasdeo Arand forest coal blocks from auction: Following protests from civil society groups and the Chhattisgarh Government, India’s Minister for Coal and Mines, Pralhad Joshi, has agreed to exclude five coal blocks in the Hasdeo Arand forest from the list of areas to be auctioned. The excluded blocks also covered the Lemru elephant reserve and the Mand river catchment. However, the Chhattisgarh Minister for Forests, Mohammad Akbar, agreed to add three other blocks to the auction list. The state government in the neighbouring state of Jharkhand has launched a legal challenge against the auction arguing the central government should have consulted the states first. (Hindustan Times)

Canadian First Nations tribe welcomes review of coal mine expansion: Canada’s Federal Environment and Climate Change Minister, Jonathan Wilkinson, has reversed an earlier decision and will now require Coalspur’s proposed expansion of the Vista thermal coal mine in Alberta to be subjected to a federal environmental assessment. Wilkinson’s announcement follows lawyers for the Louis Bull Tribe warning Wilkinson that assessment by the Alberta Energy Regulator would not include consultation with the tribe or assessment of impacts on its hunting and fishing rights. Environmental NGOs, which also submitted that the proposed doubling of the mine capacity required assessment, welcomed Wilkinson’s acknowledgement that that the project may impact fish and other species at risk which may not be adequately assessed in the provincial process. (The Narwhal, CBC, Government of Canada)

US regulator proposes extension to coal ash compliance deadline: The Environmental Protection Agency (EPA), which is responsible for regulation of the 400 coal ash pits in the US, has proposed allowing further extensions for the operation of unlined pits. In 2015, EPA introduced regulations for management of coal ash dams for the first time and set a 2019 deadline for the capping or closure of unlined dams. Following the election of President Trump in 2016, the EPA sought to weaken the regulation. However, a legal appeal against the changes was successful, prompting the agency to craft a revised regulation. The new regulation introduces loopholes that allow some dams to continue to accept waste until 2028 and potentially stay open until 2038. Earthjustice has flagged a legal challenge against the new regulation is likely. (The Hill, Wyoming Public Media)

“Coal power is no more a cheap option and it’s becoming more expensive for imported coal. Hence, the government is reconsidering its earlier plan on coal power generation in its energy mix”,

said Mohammad Hossain, the Director General of the Bangladesh Power, Energy and Mineral Resources research body, Power Cell.


Botswana: First coal export shipment railed from Minergy’s Masama mine to South African cement plant customer.

Kenya: Farmers want land bought for the Lamu coal plant returned if the project has been scrapped.

China: Former head of bankrupt Sichuan Coal Industry Group under investigation for “serious breaches of discipline”.

India: Government excludes Chinese companies from bidding on coal blocks being auctioned off.

Indonesia: Tug and barge with 900 tonnes of coal ran aground near Cilacap in Java province.

Mongolia: Coal exports in the first seven months of 2020 have declined by over 46 per cent to 11.2 million tonnes, largely due to COVID-19 restrictions.

Norway: Accelerated melting of a glacier has flooded Norway’s only coal mine which supplies its only coal power station.

South Korea: Korea Coal Corporation, a loss-making publicly owned mining company, is cutting 125 jobs or seven per cent of its staff and may drop its investment in a struggling Mongolian mine.

Companies + Markets

Poland proposes utilities restructure but shelves coal mine closures for now: Poland’s Deputy Prime Minister, Jacek Sasin, has unveiled a possible restructuring of the coal industry in which the three current utilities — PGE, Enea and Tauron — are merged into two with one holding on the coal plants and the other all the non-coal generation assets. Sasin said the government is discussing the plan with the European Commission. A proposal to restructure PGG, Poland’s largest coal mining company, by closing two loss-making mines has been shelved due to opposition from Solidarity, a key mining union. Sasin said alternative options for restructuring PGG would be discussed with the unions over the next two months. The head of the Silesian branch of Solidarity said workers were proposing the restructuring of the coal industry take place over the next 40 years. (Reuters, Deutsche Welle)

Indonesian power utility’s profit crashes: Indonesia’s state-owned power utility, PLN, has recorded a 96 per cent fall in its profit for the first half of 2020 to US$17.4 million due in part to foreign exchange losses triggered by the depreciation of the rupiah against the US dollar. Despite COVID-19 restrictions, which dampened power demand, PLN reported a 1.9 per cent increase in revenue. This was due in part to the addition of 3.59 million new customers as electrification is extended. PLN finances are also under increasing pressure from capacity payments to independent power producers (IPP), mainly coal plants. In the first half of 2020, IPP payments increased by 21 percent to 49.95 trillion rupiah (US$3.4 billion). The Institute for Energy Economics and Financial Analysis has warned the Indonesian Government it need to rein in spending on IPP projects. (Jakarta Post)

Secrecy shrouds operation of now-mothballed Petra Nova CCS project: The Institute for Energy Economics and Financial Analysis (IEEFA) has criticised the secrecy surrounding the operation of NRG Energy’s now-mothballed Petra Nova carbon capture and storage (CCS) plant. In late July it was revealed that the CCS project in Texas had closed in May due to low oil prices, which undercut sales of carbon dioxide (CO2) from the plant for use in boosting production at a nearby oilfield. Despite the plant being commissioned in January 2017, IEEFA said key information such as whether it consistently captured 90 per cent of the CO2 from a coal unit at the Parish Generating Station and the actual cost of the captured CO2 is not publicly available. IEEFA warned that while the plant had been promoted as a success story, investors in other proposed plants in North Dakota and New Mexico should be wary. (Institute for Energy Economics and Financial Analysis)

More companies dump Adani’s Carmichael project: Hanwha Securities, which bought about US$120 million of debt in Adani’s Abbot Point coal terminal along with Samsung Securities in 2019, has ruled out further support for the company. In a July 30 letter to Tipping Point, an NGO, the South Korean based Hanwha Securities stated it will not “be providing any further financing for the terminal or any of Adani’s coal projects.” The day before the company wrote the letter, protesters from Galilee Blockade occupied Hanwha’s office in Sydney demanding they end financial support for Adani. Pablo Brait from Market Forces said other companies should rule out working for Adani rather than respond only after protesters showed up at their offices. Days later a Taiwanese lender, Yuanta Securities Investment Trust, which had a five per cent share of $US500 million of bonds due to expire in 2020, sold its entire US$27 million stake. (Guardian, Australian Financial Review [paywall])

Indian company scraps plan to expand coal power portfolio: JSW, a diversified Indian company with an interest in power generation, has scrapped a plan to buy the 1050 MW GMR Kamalanga Energy project in Odisha. JSW currently operates two coal power plants: the 860 MW Vijaynagar plant in Karnataka and the 1260 MW Ratnagiri plant in Maharashtra. JSW’s CEO, Prashant Jain, said increasing investment in renewables “is a better option” than buying already stressed coal plants. “We have realised that many of these existing thermal assets have ongoing litigations and the government is increasing taxes on polluting industries, so it will be a continuous struggle for the next 15–20 years for the balance life of the plant,” he said. Previously JSW and Adani were the only private companies interested in buying stranded coal plants. (Economic Times, Business Standard, Argus)

Legal action launched over inclusion of coal in South African energy plan: The South African NGO groundWork has launched legal action against the Minister of Mineral Resources and Energy, Gwede Mantashe, and the National Energy Regulator of South Africa (NERSA) over the inclusion of new coal projects in the Integrated Resource Plan for Electricity. Since November, groundWork has sought an explanation from the Minister and NERSA why 1500 MW of new coal capacity was included in the country’s next energy plan even though it is not required for energy security and is not the lowest-cost option. The Minister and NERSA have until 18 August 2020 to respond to the High Court application. (ESI Africa, groundWork)

South African Tribunal sets aside water licences for proposed coal plant: The Water Tribunal has upheld an appeal by groundWork, an environmental justice NGO, against two water licences granted by the Department of Water Affairs and Sanitation to ACWA Power for its proposed 300 MW Khanyisa power plant. The tribunal found the water licensing authorities did not adequately assess  the impact of climate change on water security in the region. The tribunal has directed ACWA Power to rectify the procedural flaws, re-advertise its new application and undertake public consultation by September 21, 2020. While the South African Government’s new energy plan allows for new coal projects, without a valid water use licence the company cannot secure finance for the plant and the ruling could affect their preferred bidder status in the Independent Power Producer Programme. (Center for Environmental Rights)

Peabody Energy takes US$1.4 billion hit on its largest mine: Peabody Energy has written down the value of its North Antelope Rochelle mine, the largest thermal coal mine in the US, by US$1.42 billion and reported a US$1.54 billion loss for the second quarter of 2020. The company blames the loss on declining demand due to coal plant retirements, low gas prices and increased renewable generation. In 2019 coal from the North Antelope Rochelle mine was supplied to 84 coal power stations across the US. Peabody Energy’s Chief Financial Officer, Mark Spurbeck, said the company expected US coal generation to remain lower than in previous years. Shannon Anderson from the Powder River Basin Resource Council said the company’s loss indicated Wyoming coal production is in long-term decline and the state’s leaders need to “think about what comes next for our communities, coal miners, and our revenue streams.” (S & P Global, S & P Global, Peabody Energy)


Petra Nova Mothballing Post-Mortem: Closure of Texas Carbon Capture Plant Is a Warning Sign, Institute for Energy Economics and Financial Analysis, August 2020. (Pdf)

This 9-page briefing provides an overview of data gaps associated with the Petra Nova CCS project and how its closure is a warning to potential investors in two other proposed US projects.