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February 29, 2024
Issue 503  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The latest data shows the end-stage decline of coal generation in the US as plants are used less, with knock-on consequences for coal producers. In Montana, the legislative requirement of utilities to consider carbon capture and storage has come back to haunt Black Hills Energy as it ponders the future of two old, small coal units. In the UK, charges have been dropped against four Extinction Rebellion protestors who blocked the entrance to a controversial Welsh coal mine. In a recent case, India’s top environmental court overturned the decision approving the development of the Gare Pelma II coal mine in Chhattisgarh. In South Korea, 35 pensioners have launched a legal action against the National Pension Service over its lack of progress on its commitment to restrict coal financing.

While reliance on coal is fading fast in the US, coal generation continues to increase rapidly in China, India, and Indonesia. A new report by the Centre for Research on Energy and Clean Air and Global Energy Monitor highlights how the recent growth in coal generation threatens to undermine the country’s stated goals. In India, the Ministry of Coal has highlighted the rapid increase in coal generation and domestic coal production. In Indonesia, the Financial Services Authority has approved the classification of new captive coal plants for nickel smelters as eligible for funding from sources promoted as supporting green investment.

Bob Burton

Features

Why villagers opposing an Adani coal mine had a big win in court

India’s top environmental court overturned approval for the Gare Pelma II coal mine, citing failed public consultation, health risks and cumulative environmental impacts, writes Ayaskant Das in Adani Watch.

Youths picking up the baton to lead the Philippines’ multi-generational campaign against coal

Courage is contagious, says the convenor of Youth for Climate Hope, who traces how the struggle against fossil fuels in her hometown of Negros Occidental has come “full circle”, with young people now at the forefront of the movement, writes Bryan Yong in Eco-Business.

How Germany’s steelmakers plan to go green

Salzgitter, Europe’s biggest steel producer, is moving away from carbon-intensive blast furnaces and towards hydrogen-powered processing, writes Patricia Nilsson in the Financial Times.

Top News

Charges dropped against protesters who blocked access to Welsh mine: The Crown Prosecution Service has dropped all charges against four Extinction Rebellion activists who blockaded the entrance to the Ffos-y-Fran coal mine in Wales in early July 2023. In April 2022, Merthyr Tydfil Council rejected a request by Merthyr (South Wales) Pty Ltd to extend the mining operation. The company appealed against an enforcement notice that took effect on 27th June 2023 and continued extracting coal. The following week, Extinction Rebellion blocked access to the mine, and four were charged with aggravated trespass. Following amendments to the UK’s Public Order Act that came into effect in May 2023, the four protesters faced up to 51 weeks in prison. Liz Pendleton, one of those charged, said the decision of the CPS denied the four defendants “the opportunity to shine a light on this potentially illegal and criminal operation”. The Ffos-y-Fran mine closed in November 2023 after the company extracted about 500,000 tonnes of coal after its planning permit expired. The bond held for the site is far less than the estimated cost of rehabilitation, which is between £120 million (US$151 million) and £175 million (US$220 million). (Extinction Rebellion)

Pensioners file a lawsuit against South Korea’s National Pension Service. Thirty-five pensioners have filed a lawsuit against the chairman, the fund director and the auditor of South Korea’s National Pension Service over the lack of action to implement restrictions on coal financing. The lawsuit argues that health and other problems experienced by subscribers are affected by NPS’s inaction on implementing its May 2021 policy to restrict the financing of coal mining and power generation. The lawsuit seeks compensation of 20.5 million won (US$15,415) for each plaintiff. The NPS said that it has ceased investments in new power plant projects, but restricting support for existing projects requires the approval of the fund management committee, which the Ministry of Health and Welfare oversees. (Korea Times)

UNDP urged to cancel MOU on South African special economic zone: The social and environmental compliance unit of the United Nations Development Programme (UNDP) has recommended the agency cancel its Memorandum of Understanding (MOU) with the Musina-Makhado Special Economic Zone State Owned Company (SOC). The report into a complaint filed by Earthlife Africa and Living Limpopo found the South African office of the UNDP should have assessed the MOU using the template for private sector companies, which requires a higher level of due diligence. The special economic zone was announced after President Ramaphosa visited China’s President Xi Jinping in 2018 and envisaged a 4600 megawatt (MW) coal plant to cater for various industrial projects, including a coking plant, a steelworks and a ferrochrome plant. SOC later reduced the capacity of the coal power station and then dropped in favour of a solar project. Earthlife Africa and Living Limpopo objected to the MOU announced in 2022 as the zone would significantly impact the region’s water resources, air quality, and residents’ health. (Daily Maverick, United Nations Development Programme [Pdf])

Report says jump in coal use is jeopardising China’s climate targets: Preliminary Chinese government data shows that coal consumption increased by 4.4 per cent in 2023, with the Centre for Research on Energy and Clean Air (CREA) estimating carbon dioxide emissions rising by 5.2 per cent. Coal power generation increased by six per cent in 2023, and increased oil consumption was the main driver of increased emissions. Prolonged drought conditions undercut hydro generation, which led to increased coal generation. China’s 2021 Nationally Determined Contribution under the Paris Agreement pledged to control new coal power projects strictly, limit coal consumption growth, increase low-emission energy, and reduce the country’s energy and carbon intensity by 2025. CREA lead analyst Lauri Myllyvirta estimates China’s carbon dioxide emissions will need to fall by 4-6 per cent by 2025 to meet the current target of reducing carbon intensity by 18 per cent during the current five-year plan. A joint report by CREA and Global Energy Monitor revealed China approved at least 106,000 MW of coal power capacity in 2023 and began construction on 70,000 MW that year. The report warns China is at risk of missing its climate targets unless it power sector coal consumption declines substantially over the next two years. (Carbon Brief, Global Energy Monitor and CREA [Pdf)

US court overturns moratorium on coal leasing on federal lands: The Northern Cheyenne Tribe and a coalition of environmental groups have called on the Biden administration to reinstate a moratorium on coal leasing on federal lands after a Ninth Circuit Court of Appeals ruling negated a lower court decision. A moratorium on coal leasing imposed late in the Obama administration was revoked in 2017 by Interior Secretary Ryan Zinke, who President Trump appointed. The Biden administration revoked Zinke’s order, but Interior officials insisted the moratorium had not been reinstated. A lawsuit by the Northern Cheyenne Tribe and others led a federal judge in Montana District Court to reinstate the moratorium until the Bureau of Land Management (BLM) completed a new environmental analysis of the program. The Department of Interior challenged this decision, with the states of Wyoming, Montana, and the National Mining Association joining the case. The latest decision renders the 2022 ruling moot but does not explicitly state that it will allow the federal coal leasing program to resume. (E & E News, Earthjustice)

UK court clears way for Welsh mine expansion: The UK Court of Appeal has ruled that the Welsh government did not have the power to stop the expansion of the Aberpergwm coal mine as the extension of decision-making powers over coal mining in 2017 did not apply to licences granted beforehand. The company’s licence was granted in 1996 and amended in 2013. The UK Coal Authority approved Energybuild’s proposal to extend the mine, providing access to an additional 42 million tonnes of coal. The Welsh government told the court that the Coal Authority could not have rejected the expansion. Despite the win, the future remains uncertain for Energybuild as it supplies about 70 per cent of the metallurgical coal production to Tata’s Port Talbot steelworks. Tata recently announced plans to close the two coal-based blast furnaces and build an electric arc furnace. (BBC, UK Court of Appeal)

Another Bangladeshi coal ship sank: A cargo ship carrying 950 tonnes of coal sank in the Pasur River near the port of Mongla. The MV Ishra Mahmud had loaded coal from a larger vessel anchored at the port for transhipment upstream to Jashore. The master of the sunken ship reported that the hull cracked, and the vessel settled on the bottom of the river outside the main shipping channel. The 11 crew were uninjured and swam to the river bank. Sheikh Faridul Islam from the Save the Sundarbans Foundation said coal could spread widely from a shipwreck on the tides and damage aquatic life. 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. In the last five years, at least five other coal ships have sunk in or near the Sundarbans. In mid-January, a ship carrying 800 tonnes of Indonesian coal sank in the Bhairab River after being loaded at Mongla. (Dhaka Tribune, BD News)

News

Philippines: Aboitz Power Corporation has bought STEAG GmbH’s 15.6 per cent stake in the 210 MW Mindanao Steag power station, lifting its share in the project to 85 per cent.

Philippines: The Department of Energy opened a bidding process for coal exploration rights to 14,856 hectares in Lanao del Sur province.

US: The Hallador Energy Company is suspending production at its Freelandville Center Pit and Prosperity Mine, both in Indiana, with the loss of 110 jobs.

US: Treasury adds new sanctions against a range of Russian steel products companies and Sinarapromtrans, which has subsidiaries in coal transportation.

US: A bill has been sent to the Oregon Senate requiring the state’s Treasury to divest investments held by its US$94 billion Public Employee Retirement System in publicly traded companies that derive 20 per cent or more of their revenue from coal production.

Companies + Markets

US coal generation slumps: Coal-based power generation in the US slumped to a 15.9 per cent share in 2023, according to the US Energy Information Administration (EIA). Solar and wind generation accounted for 5.6 per cent and 10 per cent of generation, respectively, and are projected to surpass coal generation this year. Solar capacity increased by just over 16 per cent in 2023, with rooftop solar growing by 20.1 per cent to generate 1.7 per cent of US electricity. The EIA notes that 22,300 MW of coal capacity has been retired over the last two years, with a further 2300 MW scheduled to retire in 2024. The average age of the coal plants expected to retire in 2024 is almost 54 years, about ten years older than the remaining coal fleet. The EIA estimates retirements will accelerate in 2025 to 10,900 MW. Enerdata estimates the capacity factor of the US coal fleet is now under 40 per cent, down from the mid-70s per cent rate prevailing in the early 2000s. (Electrek, Enerwrap, American Public Power Association)

Wyoming considers lifeline for proposed CCS project: The Wyoming Public Service Commission has deferred consideration of a request by Black Hills Energy for a one-year extension on its deadline to submit a plan in March on how it will retrofit its two coal plants by 2030 with carbon capture and storage (CCS) equipment. The PSC said that the delay in considering Black Hills request would allow sufficient time to consider possible changes to the 2020 legislation that mandated utilities file annual plans on progress to adopting CCS technology. A bill amending the current act has passed through the Wyoming Senate but has not yet reached the House of Representatives. The current estimated costs of CCS for the utility’s plants are US$500 million for the 95 MW Wygen II coal plant and about US$475 million for the 90 MW Neil Simpson II plant plants. (Wyofile)

US utility flags risks from Ohio bribery scandal: American Electric Power (AEP) has disclosed in its 2023 annual report that it is in negotiations with the US Securities and Exchange Commission about a possible resolution of a securities investigation related to the utility’s role in the Ohio House Bill 6 scandal. AEP holds a 43.47 per cent share in Ohio Valley Electric Company, which operates the 1303 MW Clifty Creek plant in Indiana and the 1086 MW Kyger Creek coal plant in Ohio, both of which benefit from subsidies under the terms of HB 6. AEP indicates it is “unable to determine a range of potential losses” with civil penalties and other measures in a settlement. AEP also disclosed that it had appointed a board committee to review the claims made by a lawyer representing an AEP shareholder adversely affected by the revelations of the HB 6 scandal. The letter requested the AEP board commission an independent investigation into alleged legal violations by certain current and former directors and officers and commence legal action against any individuals who allegedly harmed the utility. (US Securities and Exchange Commission)

Indonesia classes new captive coal plants as eligible for green funding: Indonesia’s Financial Services Authority (OJK) has approved a revised investment taxonomy for sustainable investment that classes new captive coal plants for nickel smelters as acceptable as a “transitional” measure, subject to meeting certain restrictions. In the updated guidelines, new captive coal plants for the nickel sector must be commissioned before 2031 and close by 2050. The guideline also states that the plants must commit to reducing their greenhouse gas emissions by 35 per cent within ten years of operation commencing compared to the 2021 baseline of average emissions from Indonesian coal plants. In the 2022 taxonomy, coal plants were not classed as environmentally sustianable investments. OJK chief Mahendra Siregar said the agency considered broader economic and social issues, not just emissions reductions. The Institute for Energy Economics & Financial Analysis (IEEFA) said the new standard translates to an emissions intensity of about 510 grams per kilowatt hour (gm/KWh), still a high-emissions plant by international standards. IEEFA questioned whether new coal plants would close if the 35 per cent reduction target were not met using carbon offsets or carbon capture and storage and, if so, who would bear the financial loss. (Reuters, Institute for Energy Economics & Financial Analysis)

South African finance minister commits to disclose report on Eskom fleet: In his 2024 Budget speech, South Africa’s Minister for Finance, Enoch Godongwana, announced that a report by German consultants Vgbe Energy into Eskom’s fleet of coal plants would be publicly released within a week. The review was completed in late 2023 and was a condition of Godongwana approving a National Treasury bailout of Eskom. Treasury opposition to Eskom taking on new debt has also stalled the utility’s ability to access funding under the US$9.5 billion Just Energy Transition Partnership for new transmission capacity that will facilitate increased renewables capacity. (TechCentral, BizNews)

Push to convert Pakistan imported coal plant to lignite faces hurdles: Doubt has been cast on the viability of the proposal by AsiaPak International, the new owner of K-Electric, a power distribution company servicing Karachi, to convert the 660 MW unit 5 at the Jamshoro coal plant near Hyderabad to operate solely on lignite from the Thar coal fields. The Jamshoro Coal Power Limited, a government-owned Pakistan Water and Power Development Authority subsidiary, owns the plant. The construction of Unit 5 has been completed but has not yet been commissioned. The unit was designed to operate on imported coal, but K-Electric is pushing for its conversion to run on domestic lignite. AsiaPak International is an investor in the Block-1 Thar lignite mine, which K-Electric would rely on to supply about 3.1 million tonnes of lignite annually. A legal adviser to Pakistan’s power sector, Muhammad Abdul Rafay, said the Asian Development Bank financed the plant on the condition that it runs on 80 per cent imported coal and a change could not occur without its permission. He also said that a change would require significant design changes to the plant and warned it would increase pollution. He argues Pakistan should invest in renewables. (The News International)

Indian coal generation surges, but imports drop: The Ministry of Coal has reported coal power generation increased by 10.06 per cent in the April-January period compared to the previous year, with electricity demand rising by 6.6 per cent. Imported coal volumes declined by 36.69 per cent to 19.36 million tonnes, down from 30.58 million tonnes over the corresponding period. (Reuters, Economic Times, Ministry of Coal [Pdf])