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January 25, 2024
Issue 498  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

South Africa’s draft power plan does little to address the significant air pollution problems imposed on the surrounding communities by Eskom’s coal fleet. While the draft power plan is open for public comment, the government is keeping a crucial technical review of Eskom’s coal plants under wraps. Energy analysts suggest the review proposes that some of the coal plants are not worth the cost of reviving, a recommendation that sits at odds with the vehemently pro-coal Minister for Energy. Sasol, South Africa’s coal-to-oil producer, also faces investor opposition to its lacklustre plans to decarbonise.

India also faces significant challenges in addressing the air pollution crisis affecting large parts of the country, with coal plants a considerable part of the problem. A new review finds substantial gaps in the government’s progress in implementing the National Clean Air Programme launched in 2019. India’s air quality is likely to get worse before it gets better. The Modi government has just approved Coal India’s involvement in two new proposed coal plants, and Adani Power is pushing for a 1600 MW expansion of one of its plants. Beyond India, funding for new coal projects is gradually becoming more challenging, but developers of new coal mining and power plants in Asia are attracting funding from national and regional banks. A review of the lending practices of 30 of the largest Asian banks has found that few have policies restricting the financing of coal mines and power projects.

Bob Burton

Features

Draft South African energy plan would cut years off our lives

South Africa’s draft power plan does not attempt to account for the fact that the chronic illnesses caused by pollution cost the state and private sector money and drain the financial resources of individuals and families, writes Melissa Fourie in BusinessDay.

South African city built on coal confronts an uncertain future

The town of Secunda was created to support the development during South Africa’s apartheid era of Sasol’s coal-to-oil plant. As Sasol, one of the country’s largest greenhouse gas emitters, faces growing pressure to decarbonise, the city faces an uncertain future, writes Paul Burkhardt in Bloomberg.

 ‘Control the narrative’: how an Alabama utility wields influence by financing news

Alabama Power, a subsidiary of Southern Company, runs the Alabama News Center, and the company’s philanthropic arm, the Alabama Power Foundation, owns the Birmingham Times. Neither reports on high electric bills or utility-related pollution, writes Miranda Green for Floodlight News and The Guardian.

European Union electricity market reform: what’s in it

The final deal reforming the European Union’s electricity market allows coal power stations to continue receiving state support as part of capacity mechanisms, writes Dave Keating in Energy Monitor.

Top News

Report finds slow rollout of India’s air pollution programme: A review by the Centre for Research on Energy and Clean Air (CREA) has found major shortcomings in the Indian government’s implementation of the National Clean Air Programme that was launched in 2019. CREA found that 78 cities covered under the programme exceeded PM10 pollution levels, while 118 cities not included in the scheme reported high exposure levels. CREA said the discrepancy highlighted the need to revise the list of cities covered by the programme. The review found spending on the programme has fallen well short of the original commitments. Of the 131 cities classed as in breach of national air quality standards, as of December 2023, authorities in only 44 had undertaken required studies to identify the sources of air pollution. CREA found that the commitment to establish an air pollution forecasting system for all cities in breach of air quality standards has only been implemented for the capital city of New Delhi. (Centre for Research on Energy and Clean Air)

Consultant’s report into Eskom plants kept from public view: South Africa’s National Treasury has declined to publicly release a report into 14 Eskom coal plants by the VGBe Consortium of Steag, RWE-Tech, Vattenfall and KWS eG. The review, completed three months ago, was a condition required by the Minister of Finance, Enoch Godongwana, before approving a National Treasury bailout of Eskom. Three requests by the Center for Environmental Rights to release the report under the Promotion of Access to Information Act have been rejected. Eskom said it can’t distribute or comment on the report until the National Treasury release it. The National Treasury said the report won’t be released until Godongwana has completed discussions with Cabinet ministers on the report’s recommendations. An energy analyst anonymously said the report recommends mothballing some of Eskom’s coal power stations, which are considered too costly to rebuild. The Minister for Minerals and Energy Resources, Gwede Mantashe, is opposed to the retirement of coal plants, and the recently released draft integrated resource plan defers further closures until the 2030s. (News24)

Another coal ship sank in Bangladesh: The MV Purbanchal-7, carrying 800 tonnes of imported Indonesian coal, sank in the Bhairab River near Jashore. The vessel had collected its cargo from Mongla Port, where coal is commonly transferred to smaller vessels for delivery further upriver. In mid-November 2023, the MV Prince of Ghashiakhali, carrying 800 tonnes of coal, sank in the Passur River near the port of Mongla. Civil society groups have expressed alarm at the increased volume of coal shipped through and past the Sundarbans World Heritage Area, the world’s largest mangrove forest, to reach Mongla. In the last five years, at least four other coal ships have sunk in or near the Sundarbans. (The Business Standard)

Regulator suspends Jindal’s Australian mine over safety problems: The NSW Resources Regulator has suspended further mining at Wollongong Resources’ Russel Vale metallurgical coal mine over “ongoing safety concerns” following the company’s failure to institute appropriate safety measures after an April 2022 “frictional ignition event”. In underground mines, frictional ignition occurs when mining machinery strikes a hard rock and ignites methane or coal dust. The mine has had a turbulent history, with production resuming in September 2021 after a six-year shutdown. Wollongong Resources, a wholly-owned subsidiary of the Indian power and coal mining company Jindal Steel and Power Limited, restarted the mine to produce 3.7 million tonnes of coal over five years. Before the suspension, the company employed about 140 full-time staff. The Mining and Energy Union said it was aware of five friction ignition events in the last eight months. In May 2023, the regulator revealed a fire took hold for 30 seconds in a section of the mine after a spark ignited methane from a borehole exposed during the mining process. (ABC News,  NSW Resources Regulator)

New Canadian mine plan nears public comment phase: NWP Coal Canada has submitted its environmental impact statement (EIS) for the proposed Crown Mountain mine near Elkview in British Columbia. The company aims to produce two million tonnes of primarily metallurgical coal annually over a 16-year mine life. NWP Coal Canada said it wants to begin construction late in 2024, with the first production commencing in late-2025. Details of the 30-day public comment period on the EIS have not yet been announced. NWP Coal Canada is a subsidiary of the small Australian exploration company Jameson Resources, which holds a 77.8 per cent stake in the company, with the small New Zealand coal mining company Bathurst Resources holding the remainder of the company. The Crown Mountain project is near two Teck Resources metallurgical coal mines that have been the focus of a long-running controversy over water pollution. (Canadian Mining Journal, Jameson Resources [Pdf])

News

Australia: The New South Wales Department of Planning has approved a three-year extension to 2036 for Idemitsu’s Boggabri coal mine. The extension allows the extraction of 28 million tonnes of coal, subject to federal government approval.

Australia: Report argues that a surge in renewables and batteries will remove the need for the New South Wales government to provide subsidies to keep the Eraring coal plant open after 2025.

India: The Ministry of Home Affairs has cancelled the registration that allows the Centre for Policy Research to receive overseas funds. The centre has published research on India’s energy transition.

India: The Indian Metallurgical Coke Manufacturers’ Association wants the government to cut the volume of cheaper imported metallurgical coal used for coke manufacturing by more than a quarter to 2.6 million tonnes yearly.

India: Uttarakhand’s Chief Minister has requested a coal block to establish a 1000 MW mine-mouth power plant. Uttarakhand currently has no coal plants.

Sweden: H2 Green Steel has signed a financing agreement for €4.2 billion (US$4.6 billion) and raised an additional €300 million (US$327 million) in equity. H2 Green Steel plans to build a green steel plant in Boden with integrated green hydrogen and iron production.

UK: Tata Steel has announced the closure of two blast furnaces at its Port Talbot steelworks in Wales. The closure will result in the loss of 2800 jobs. Tata Steel has previously announced plans to commission an electric arc furnace at the Port Talbot site.

US: A federal court judge has ordered the sale of the 2009 Bell helicopter owned by Bluestone Resources, a family company of West Virginia’s Governor Jim Justice. The Russian mining company Mechel initiated the legal action to settle unpaid royalty debts.

US: The Edison Electric Institute and investor-owned utilities have lodged further submissions opposing the Environmental Protection Agency’s proposed fossil fuel power plant rules.

US: Omaha Public Power District officials asked customers to cut consumption during a cold snap as all four of the utility’s coal units were offline due to the freezing of the Missouri River around cooling water intakes.

US: A federal court judge has given preliminary approval to a US$12.25 million class action settlement over demolishing the smokestack at the Crawford coal plant. The explosion covered part of an adjoining suburb in a plume of dust and debris.

Companies + Markets

Coal India to invest in two new coal power plants: The Indian government’s Cabinet Committee on Economic Affairs has approved investments by two Coal India subsidiaries in two new coal plants. The plants have a combined capacity of 2260 MW. The committee approved South Eastern Coalfields (SECL), a Coal India subsidiary, investing in a new 660 MW coal unit at the existing 210 MW MP Amarkantak Thermal Power Station. The new unit will be developed through a joint venture between SECL and the Madhya Pradesh Power Generating Company, a state government-owned utility. Another Coal India subsidiary, Mahanadi Coalfields (MCL), gained approval to build a 1600 MW plant in Odisha through a specific purpose subsidiary, Mahanadi Basin Power. The 1600 MW Hemgir power station was proposed in about 2011 and then abandoned. In a separate development, Adani Power is proposing a 1600 MW expansion of its Raigarh coal-power plant in Chhattisgarh. The proposed project has alarmed residents already bearing the impacts of air and dust pollution from the existing 600 MW unit at the site. (The Hindu, Adani Watch)

Report finds few Asian banks restrict lending for new coal projects: A new report by BankTrack, an NGO that monitors private sector commercial banks, has found that most of the 30 major banks across Asia surveyed have either weak or no policies restricting the financing of new coal power plants. The BankTrack report, Coal Havens, reviewed significant banks across India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Taiwan and Thailand and found that there has been a shift away from specific coal project-based financing to general corporate lending and underwriting. The report also notes coal mining and power companies are increasingly turning to domestic and regional banks to finance projects. BankTrack said the review also highlighted how finance is increasing for captive coal power projects, especially in Indonesia. Major banks backing coal companies and projects include Mizuho and MUFG in Japan, Bank Mandiri, Rakyat and Negara in Indonesia, and the State Bank of India. (BankTrack [Pdf])

Indonesian overcapacity provides an opportunity to close old coal plants: The electricity director general of the Ministry of Energy and Mineral Resources, Jisman Hutajulu, said the government and PLN are considering the details of a plan to close the 600 MW unit 3 and 400 MW Unit 4 at the Banten Suralaya coal plant near Jakarta. The Suralaya plant is a significant source of pollution affecting Jakarta and the surrounding region, and its continued operation contributes to the 4000 MW of surplus capacity. Jisman said the commissioning of new coal plants would be delayed for two or three years to limit the exposure of the state-owned utility to expensive take-or-pay liabilities with private power generators. In 2023, Indonesia added 4182 MW of new generating capacity to the grid beyond the captive power plants, more than the 3886 MW targeted in the long-term electricity procurement plan. (Jakarta Post [paywall])

Czech co-owner wants new inquiry into Australian coal plant explosion: Sev.en Global Investments has launched legal action in the Federal Court of Australia requesting the appointment of a special administrator to investigate the failures of the two units of the Callide C plant in Queensland. In May 2021, the 420 megawatt (MW) Unit 4 at the plant suffered extensive damage after an explosion, while CS Energy shut down the 466 MW Unit 3 in December 2022 after the collapse of cooling equipment. An independent review into the explosion at Unit 3 by forensic engineer Sean Brady has still not been completed, triggering Sev.en Global Investments legal action. The two units are expected to return to service at the end of July and March. A joint venture between the state-owned utility CS Energy and Genuity owns the plant. In 2019, Sev.en Global Investments, a company owned by Czech billionaire Pavel Tykac, bought a stake in Intergen Australia, later renamed Genuity. Hit by the lack of revenue from the Callide C plant, Genuity went into voluntary administration in March 2023. (Australian Financial Review [Paywall])

Philippines private power deals create hurdle for early coal closures: A report by TransitionZero estimates that buying out and replacing coal capacity in the Philippines could cost as much as US$140 per tonne of carbon dioxide (CO2) due to generous provisions in Power Supply Agreements that allow private power utilities to pass the cost of high fuel costs through to consumers. TransitionZero estimates the average cost of buying out current coal power agreements would be about US$41 per tonne of CO2, with a further US$99 per tonne of CO2 to replace coal capacity with solar electricity plus storage. The report estimates that retiring the country’s coal fleet five years early could prevent the emission of 290 million tons of CO2 and result in closure around 2040. The report notes that the country’s coal fleet had an average forced outage rate of nine per cent from 2020 to 2022, undercutting the utility’s claim they contributed to stable power supply. TransitionZero also highlighted the complex nature of the power supply agreements associated with each plant, adding to the likely complexity of negotiating contracts for their early retirement. The Philippines has 58 operating coal units with a combined capacity of 12,200 MW. (TransitionZero)

Southeast Asian countries dominate demand for Russian coal: The US Energy Information Administration (EIA) notes that importers of Russian coal have changed profoundly since the entire European Union sanctions took effect in August 2022. Since the sanctions came into effect, China, South Korea, Turkiye, and India have accounted for more than 80 per cent of Russia’s coal exports, up from about 47 per cent in the year to July 2022. The EIA notes that Russian coal exports have “remained relatively flat” at 211 million tonnes. With the collapse of exports to Europe and Japan, Russian exports to China surged by 73 per cent to 94 million tonnes in the year to July 2023. Over the same period, Russian coal exports to South Korea, Turkiye and India jumped by 44 per cent to 31 million tonnes, 120 per cent to 27 million tonnes and 159 per cent to 26 million tonnes, respectively. The EIA notes that the switch to boost exports into the Pacific market has resulted in bottlenecks on rail networks running east from the critical Kuzbass coal mining region and at the Pacific Ocean port of Vostochny. (US Energy Information Administration)

Slide in support for Sasol’s climate strategy: Support for Sasol’s proposed climate strategy has fallen for the third consecutive year, according to Just Share, a shareholder advocacy group. Sasol announced that its climate plan won support from 77 per cent of shares voted, down from 95 per cent in each of the two previous years. (Sasol excluded from its vote distribution the 6.3 per cent of shares cast as abstaining on the resolution.) “It shows there is a significant number of shareholders who don’t have confidence in Sasol’s current plan,” said Tracey Davies, the Executive Director of Just Share. Sasol emits about 60 million tonnes of greenhouse gas emissions annually from its coal-to-oil plants, accounting for about 12 per cent of South Africa’s emissions. Just Share argues the company has backed away from its target of cutting emissions by 30 per cent by 2030 and has failed to disclose adequate details on its climate plans to investors. The company is also seeking to overturn a July 2023 decision of SA’s national air quality officer to reject Sasol’s proposed change to measure sulphur dioxide emissions from the boilers at its Secunda plant. (Business Live, News24, Business Day)

Green Steel Transition

Report argues for demand-pull measures to support green steel switch: In a new report, Sandbag, a European climate policy think tank, argues that governments should proactively adopt demand-side measures to guarantee a market for green steel to reduce the risk of investments in cleaner steel production technologies. The report, From Niche to Mainstream: Shaping Demand for Green Steel, argues that as long as green steel producers face higher electricity costs and low carbon prices, there is a significant risk that green steel may only find markets in niche applications. Sandbag argues that the proliferation of often competing green steel standards could discourage the development of initial markets needed to spur investment in new production technologies. (Sandbag [Pdf])

Resources

“Violent transitions: towards a political ecology of coal and hydropower in India”, Climate and Development, December 2023.

This paper analysed 121 coal and hydropower projects in India and argues that both coal and hydropower energy transitions have involved state-sanctioned repression to facilitate land expropriation. The paper argues that these historical injustices must be addressed in India’s emerging just transition policy frameworks.