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July 6, 2023
Issue 473  |  View Past Issues
CoalWire
Published by Global Energy Monitor

Editor's Note

The US$61 million corruption scandal In Ohio over bailouts for coal and nuclear plants is a stark example of how power utilities can seek to wield their power to block change. The prison sentences for the former Ohio Republican speaker and the chair of the Ohio Republican Party are significant, and others could still be charged. The Ohio scandal has played out as three US states have banned utilities from charging customers for political and lobbying expenses. But the problem is far broader. In Montana, lobbyists pushed two new laws that obstruct legal challenges to coal mine permits. The launch of a new database of registered lobbyists in the US working for coal and other fossil fuel companies aims to help shine a light on the less-visible networks utilised to block or slow change.

The latest edition of the Australian government’s quarterly commodities report notes the structural shifts away from thermal coal and challenges facing metallurgical coal producers. The dramatic reduction in planned new coal power capacity in Vietnam significantly impacts the seaborne thermal coal market. A few years ago, Vietnam, which produces little of its growing coal needs, was seen as one of the few potential growth markets for exporters. A report by Global Energy Monitor highlights that new plants nominally pencilled into the current plan may also fall by the wayside. In India, the government’s effort to auction off new coal blocks has generated little interest, with only seven of 37 areas attracting sufficient bids to proceed to the next stage of the process.

I’ll take a one-week break, so the next edition of CoalWire will be July 20.

Bob Burton

Features

Better late than never: Vietnam releases 2021–30 power plan

After a dozen draft versions, Vietnam finally released its 2021–30 national energy plan in mid-May. While the reduced role for coal and expanded target for renewables targets are encouraging, significant implementation challenges loom, writes Henry Storey in The Interpreter.

Seven years after the murder of Gloria Capitan, our struggle has grown into a climate movement

Seven years ago, Philippines anti-coal activist Gloria Capitan was murdered. Gloria may not be with us anymore, but her spirit and legacy live on among us, writes Veronica ‘Derek’ Cabe, the Co-ordinator, Nuclear and Coal-Free Bataan Movement, in Global Witness.

Coal dust from Adani’s mine, trucks and power plant blanket farms, marketplaces and people

Coal dust from trucks transporting fuel to Adani’s 1200 megawatt (MW) Bandhaura power plant in Madhya Pradesh brings hardship to residents, writes Ayaskant Das in Adani Watch.

Guess who’s been paying to block green energy. You have.

Around the country, utility companies are using their outsize political power to slow down the clean energy transition, and they are probably using your money to do it, writes David Pomerantz from the Energy and Policy Institute in the New York Times.

Top News

US judge suspends Montana laws obstructing coal mine legal challenges: A federal court judge suspended two new Montana laws that obstruct legal challenges to coal mine permits. The seven-month suspension enables federal agencies to review the laws and assess whether they are consistent with existing national mining, clean air, and clean water laws. Montana’s House Bill 576 changed the legal definition of “material damage” to exclude breaches of water quality standards and made it retrospective so it would override a recent court ruling requiring the state to protect water quality when considering applications for mining permits. Senate Bill 392 mandates that appellants would be required to pay the legal costs of mining companies if a legal challenge was unsuccessful. Lobbyists for coal companies had significant input in drafting the two bills. A coalition of environmental groups, including the Montana Environmental Information Center, brought a legal challenge arguing the legislation is outside the delegated authority allowed to Montana under the Surface Mining Control and Reclamation Act. (Billings Gazette, Montana Environmental Information Center)

Twenty-year prison sentence over bailout scandal for Ohio Republican: Former Ohio Republican House Speaker Larry Householder was sentenced to 20 years in prison for leading a racketeering conspiracy to pass and defend a US$1.3 billion bailout of two nuclear and two coal plants. FirstEnergy and other companies contributed almost US$61 million to the campaign that Householder masterminded. Former Ohio Republican Party chairman Matt Borges was sentenced to five years in prison for his role in the scandal. US Attorney Kenneth L. Parker said Householder “exploited the lack of transparency in 501(c)(4) entities to bury their corrupt and complex scheme” to launder funds from utilities and others in return for the passage of the bailout. Evidence before the court also revealed Householder used more than US$500,000 from Generation Now, the dark money non-profit established to fund the campaign, to pay credit card debts and other personal expenses. The nuclear bailout has been repealed, but the subsidy for the two coal plants remains. It is unclear whether the Department of Justice will file further charges against others involved in the scandal. (Columbus Dispatch, US Attorney’s Office, Southern District of Ohio, US Attorney’s Office, Southern District of Ohio)

Welsh mine continues to operate without a permit after appeal lodged: Residents and environmental groups have expressed alarm as the Ffos-y-Fran mine continues operating after Merthyr (South Wales) appealed against an enforcement notice due to take effect on June 27. Residents and Coal Action Network have called on the Welsh government and Merthyr Tydfil County Borough Council to issue a ‘stop order’ to block mining while the appeal is heard. The appeal process could take up to a year, during which time CAN estimate the company could produce another 500,000 tonnes of coal even though planning permission for the mine expired in September 2022. (BBC)

Villagers blockade access to planned Serbian lignite mine: Villagers from Bistrica in Bosnia and Herzegovina have blocked the access road to the proposed lignite mine, a project the Center for Environment (CZZS) argues is illegal. Dragan Ostic from CZZS said land was bought several years ago for a proposed tourism project. Subsequently, a company, Drvo-Ekport, applied for a coal concession over the land. Before government agencies decided on the application, unmarked machines began excavating. Villagers argue the project would affect access to spring water and generate noise and dust pollution. CZZS has also filed a legal challenge against the decision of the Republic of Srpska, one of two entities of Bosnia and Herzegovina, to approve coal exploration at another site at Bukova Kosa. (Balkans Green Energy News, Center for the Environment)

IEA reveals Australia massively undercounting methane emissions: Recently released International Energy Agency (IEA) data has shown that Australian coal mine methane emissions in 2022 were about 81 per cent higher than disclosed by the government, according to a new report by the Institute for Energy Economics & Financial Analysis. The IEA based its estimate on publicly available information and satellite data, while the Australian government relies on estimates submitted by coal companies. The undercount represents more than six per cent of Australia’s current emissions. Australia has signed onto the Global Methane Pledge to cut methane emissions by 30 per cent by 2030 but has not yet set a target or strategy to achieve the cuts. (Institute for Energy Economics & Financial Analysis)

News

Australia: The Australian government has approved Idemitsu’s request to expand the Ensham coal mine in Queensland to produce an extra 38 million tonnes of thermal coal between 2028 and 2037.

Australia: Tigers Realm Coal, which operates a coal mine in Russia, has abandoned its plan to become a private company in response to an initial assessment it could be in breach of sanctions imposed on companies trading with Russia.

Australia: NSW Natural Resources Access Regulator has negotiated a A$54,000 (US$36,100) “compensation” payment from Idemitsu over the illegal collection and use of hundreds of millions of litres of clean water at its Boggabri Coal Mine in New South Wales.

Bosnia and Herzegovina: The coal mining company Banovici has launched a tender for a six-month revolving loan for 2.5 million marka (US$1.4 million).

Japan: Residents and NGOs have protested against the start of commercial operations at the first of two new 650 megawatts (MW) coal units at the Yokosuka plant near Tokyo, which JERA and TEPCO jointly own.

Pakistan: The separatist Baloch Liberation Army claims it destroyed twenty trucks transporting coal from Chamalang mines in Balochistan to Punjab.

Philippines: Aboitiz Power announced that next year the company would study the potential of co-firing its coal plants with ammonia “possibly in collaboration” with the major Japanese utility JERA.

UK: The decommissioning of the last two 700 MW coal units at Drax will continue after a review found that it isn’t feasible to keep operating due to “technical, maintenance and staffing reasons”.

US: Mine Safety and Health Administration proposes extending the 50 micrograms per cubic meter allowable limit of respirable crystalline silica to coal and other mines.

Companies + Markets

Indian coal block auction attracts limited interest: India’s Ministry of Coal’s attempt to auction 37 coal blocks has attracted limited interest, with only 18 blocks attracting initial bids. Eleven coal blocks attracted only one offer and will be excluded from further consideration under the terms of the auction process. Only eight coal blocks attracted more than two bids. The bids will now be evaluated for eligibility for short-listing for auction on July 10. The Chhattisgarh state government had objected to the auctioning of coal blocks in the state. Of the seven blocks offered in the state, only the heavily forested 2400-hectare Tara block, part of the Hasdeo-Arand forest, was sought, attracting three bids. The block is estimated to have the potential for six million tonnes a year of thermal coal. If the Tara block is auctioned, the bidder will still face the challenge of acquiring 380 hectares of land in the face of strong community opposition. An attempt to re-auction five coal blocks in a previous auction attracted only one bid for a 4 million tonnes per annum thermal coal block. At a recent Ministry of Coal consultation with private coal companies, potential bidders complained of the “negative outlook of coal sector in banking fraternity”. Banks at the meeting said they were willing to lend funds for projects if they are viable and private equity investment is available. (Mining Technology,  Ministry of Coal, MSTC [Pdf])

Report highlights Vietnam’s energy plan targets require cancellations: A report by Global Energy Monitor (GEM) estimates that aligning Vietnam’s new Power Development Plan goal of capping coal capacity at 30,000 MW by 2030 with the commitments in its Just Energy Transition Partnership will require the cancellation of all coal plants not currently under construction. Vietnam has 25,900 MW of operating coal capacity. The report notes that two new projects – the 650 MW An Khanh-Bac Giang and the 1200 MW Nam Dịnh I – along with the 110 MW expansion of the Na Duong II plant and a 2000 MW extension of the Song Hau II project are all currently under consideration. Five proposed coal plants struggling to attract finance or that have been stalled for years have until June 2024 deadline to demonstrate progress or be cancelled. GEM estimates Vietnamʼs proposed coal power capacity has fallen by 92 per cent since 2015. (Global Energy Monitor [Pdf])

Singaporean finance regulator unveils proposed coal financing limits: The Monetary Authority of Singapore (MAS) has released proposed thresholds for financing coal power plants in Asia. MAS suggests the Singapore-Asia Taxonomy include provisions that coal plants not operate for more than 25 years and that all plants must close by 2040. It proposes that coal plant closures must be matched by the same or greater clean energy capacity to avoid the risk that new coal plants replace old projects. The standards propose owners of coal plants must not develop new coal plants and must have a transition plan consistent with achieving the Paris Agreement goal of limiting global heating to 1.5°C by 2030. The three largest banks operating in Singapore are the Oversea-Chinese Banking Corporation (OCBC), DBS Bank and United Overseas Bank (UOB). Public comments on the proposed standards are open until July 28. The Acting CEO of Market Forces, Will van de Pol, welcomed the proposal but said more detail is required to accurately calculate the lifecycle emissions for any replacement power generation. He said the standards “could leave the door open for problematic and unproven technologies such as carbon capture and storage, hydrogen and ammonia, potentially delaying the transition to clean, renewable energy.” (S & P Global, Monetary Authority of Singapore)

Uncertain outlook for thermal coal exporters: The latest edition of the Australian government’s Resources and Energy Quarterly notes exports of thermal coal from the Kuzbuss, Russia’s main producing region, slumped by nine per cent in the year to the end of March and are unlikely to rebound. The report states rail network upgrades could see Mongolian exports to China double the recent annual average of 30 million tonnes, potentially reducing imports from the seaborne market. Thermal coal accounts for about 20 per cent of Mongolia’s coal exports, but the share is increasing. The report notes rising uncertainty about the prospects for thermal coal exports in the Asian market, with mining companies suffering from labour and equipment shortages, declining coal quality, increasing difficulty gaining finance and insurance issues, and increasing renewables deployment. The report estimates the 6000 kilocalories per kilogram of Newcastle thermal coal may fall from US$189 a tonne in 2023 to about $US120 a tonne in 2025. (Australian Department of Industry [Pdf])

Australian government warned on hydrogen hype: A report by the Centre for Policy Development on Australia’s most fossil-fuel-exposed regions recommends that local just transition plans look beyond a focus on new ‘anchor industries’ such as hydrogen and focus on a bottom-up process of increasing economic resilience and adaptability. The report examines major coal-producing regions, including the Hunter Valley in NSW, Collie in Western Australia and the Latrobe Valley in Victoria. The report emphasises the central role to be played by local governments with funding and policy support from the federal government and the recently created Net Zero Authority. “I think the trap that people often fall into when thinking about transition is looking for a kind of one-to-one industry or one-to-one job swap. The reality is any transition, and particularly the one facing us in coal industries like Latrobe Valley, is going to require a lot of diversification,” said Dan Musil from the Earthworker Cooperative in the Latrobe Valley that manufactures solar water heaters and battery components. (ABC News, Center for Policy Development [Pdf])

South African coal railway falls further behind schedule with vandalism: A World Bank-backed railway intended to carry up to 7 million tonnes of coal a year from Ermelo to Eskom’s 4110 MW Majuba power station has been delayed further due to the theft of copper cabling and other vandalism. The 68-kilometre railway was approved in December 2004, with construction commencing in 2011. However, the US$402 million project, originally due to be completed in 2016, is now scheduled to be commissioned in March 2024. The railway is being built to shift coal transport from road to rail and reduce conflict with landowners and other road users. Eskom said intelligence assessments suggested the railway line has been “targeted by criminals in order to promote increased demand and opportunities for the use of trucks.” (Mining.com)

Green Steel Transition

Uncertainty over Chinese steel industry hangs over met coal market: The Australian government’s Resources and Energy Quarterly estimates the seaborne metallurgical coal trade could increase from 297 million tonnes in 2022 to about 318 million tonnes in 2025 but cautions “there are significant risks in both directions”. Chinese demand has weakened due to reduced construction sector activity and overcapacity in the real estate market. Any significant decline in Chinese steel production would undermine demand for new coal production and lower prices. Given the potential impacts of international sanctions on critical machinery and equipment, there is also uncertainty about how much Russian metallurgical coal will be exported to China and India. A major expansion in Indian steel capacity could increase metallurgical coal imports from 60 million tonnes in 2022 to 71 million tonnes by 2025. The report estimates that high-cost US exports are expected to decline marginally, while Canadian exports will likely remain steady but peak in the next few years. The report states that exports from Vulcan Resources Moatize mine in Mozambique will probably recover to 7 million tonnes by 2024 and grow in the longer term. New rail connections have facilitated increased shipments from Mongolia. The report estimates prices for Australian metallurgical coal will decline from about US$273 per tonne in 2023 to about US$200 per tonne by 2025 as new mine expansions are commissioned and mines affected by wet La Nina conditions resume full production. (Australian Department of Industry [Pdf])

Release of new global blast furnace database: Global Energy Monitor has launched the Global Blast Furnace Tracker, a new open-access database that tracks 1408 blast furnaces across 477 plants in 55 countries. The database accounts for 1.45 billion tonnes of operating pig iron capacity as well as 280 million tonnes of new capacity in development and 230 million tonnes that have either been retired or are currently idled. The database accounts for about 91 per cent of the 1.6 billion tonnes of global pig iron capacity. (Global Energy Monitor)

Resources

Lobbyist Database, F-Minus, July 2023.

A new climate group, F-Minus, has launched a database of 1500 US lobbyists who work for the fossil fuel industry. It also includes more than 14,000 non-fossil fuel clients of the lobbyists, including hundreds of local governments, schools and universities, and non-profit organizations. Some media coverage of the database can be seen here and here.

A Race to the Top China 2023: China’s quest for energy security drives wind and solar development, Global Energy Monitor, June 2023. (Pdf) Media release here.

This 23-page report estimates that China has 379,000 MW of large utility-scale solar and 371,000 MW of wind capacity in either the pre-construction or construction phase, with nearly all of this proposed to be commissioned by 2025. The combined solar and wind capacity almost equal China’s installed operating capacity.