June 26, 2014

Carbon Capture and Storage enters the twilight zone

“In its latest annual review of the ailing prospects for the deployment of Carbon Capture and Storage (CCS), the International Energy Agency’s Clean Coal Centre (IEA CCC) has tentatively suggested that the cost of developing and deploying the expensive technology should be paid for by coal, oil and gas producers. It is, however, a suggestion guaranteed to be rejected by the coal industry which has most to lose,” writes Bob Burton.

Suggested Tweet: Carbon Capture and Storage enters the twilight zone http://bit.ly/1v7JURK #coal #CCS @bobburtonoz

top news

Japan offers funds for Indonesian transmission project: The Japan International Cooperation Agency (JICA), the Japanese government’s bilateral lending agency, has offered to loan US$1.19 billion for the construction of a high-voltage transmission line between proposed coal-fired power plants in South Sumatra and the island of Java. In February the Indonesian government-owned power utility PLN shelved the US$2.1 billion project due to a lack of funds. At the time JICA had offered to loan only US$400 million. (Reuters, Bisnis.com)

Documents reveal flaws behind US coal ash dam disaster: Internal Duke Energy documents have revealed that a section of corrugated metal pipe which collapsed and caused the Dan River coal ash dam disaster was incorrectly recorded on plans as a concrete pipe. The documents also revealed that the company was advised in 1986 and 1992 to do a simple test for leaks on the stormwater pipe under the dam. However, there are no records indicating the tests were ever done. (News & Record)

Eskom reports estimate deaths from pollution could exceed 600: Reports commissioned by Eskom have estimated that more than 600 deaths and more than 24 000 hospital admissions could be caused by pollution from the utility’s existing and proposed coal-fired power stations. The reports, which were completed in 2006, were released to the Center for Environmental Rights after it filed a Promotion of Access to Information Act request. The opposition Democratic Alliance has requested Eskom appear before a parliamentary committee to address the reports. (Mail & Guardian, Democratic Alliance)
Czech Republic ponders coal power phase out: A 25 year energy plan for the Czech Republic, which is currently being drafted by the Ministry of Industry and Trade, is likely to propose the phasing out of coal-fired power stations. While the Czech Republic has been a major power exporter, increasing renewables generation in Europe is driving wholesale prices down making power imports more attractive than subsidising domestic generators. The proposed energy plan is likely to be discussed by Cabinet later this year. (Radio Praha)

Australian port company cans new export terminal: The publicly-owned North Queensland Bulk Ports Corporation (NQBPC) has withdrawn its proposed 180 million tonnes per annum coal export terminal at Dudgeon Point due to “current and short-term forecast market demand.” NQBPC’s decision is the fourth coal export terminal expansion in Australia to have been cancelled in the past two years. (North Queensland Bulk Ports Corporation, Institute for Energy Economics and Financial Analysis)

“The divestment campaign could inflict reputational damage on the fossil fuel industry that raises the costs of doing business, results in permanent devaluation of stock prices, and ultimately results in restrictive legislation,”

writes (pdf) Sinclair Davidson, a Professor of Economics at RMIT University in a report for the Minerals Council of Australia.


Mongolia: POSCO subsidiary wins right to build and operate 450 MW coal plant.

US: Eight arrested at protests against Alpha Natural Resources mountaintop mining.
US: Oakland council opposes coal and oil trains passing through city on way to port.

Zimbabwe: Cabinet to consider new Mines and Minerals Act to promote coal and other mining.

companies + markets

Minister rules out special support for stressed Indian power producers: The Minister for Power, Piyush Goyal, stated that there will be “no major change” in the Reserve Bank of India guidelines on loans to the power sector. Private power companies have lobbied the new government to relax the guidelines, which would allow financially-stressed private power companies to avoid having to restructure their loans. It is estimated as much as 11 000 MW of coal-fired plants cannot generate power due to lack of a dedicated coal supply. (The Financial Express)

European thermal prices tumble on falling demand: Lower seasonal power demand and the global oversupply of coal are forecast to result in European thermal coal prices falling in the short term. A report by Credit Suisse analysts also states that “we expect a structural downtrend in coal demand to reduce imports by a compound annual growth rate of 6 percent through 2017.” Two key factors are the closure of plants due to the European Union Large Combustion Plant Directive and increased renewable energy capacity. (Bloomberg)

Shenhua signs deal over Siberian coal deposit: China’s largest coal producer, Shenhua, has signed a memorandum of understanding with the Russian government-owned company Rostec to develop the Ogodzhinskoye thermal coal project and build a new coal export terminal. The companies state that the US$5 billion project aims to export 18 million tonnes in 2015. (Platts, Rostec)
Indonesian miner engulfed by financial storm: Shares in Indonesia’s largest coal miner, Bumi Resources, have been rocked after it was revealed that the company failed to get a quorum at a meeting of bondholders it called to extend the maturity date of US$375 million of bonds. Bumi Resources was proposing the bonds mature in seven years instead of August this year. While shares in the company have regained ground lost after an initial drop, the company is still trading 71 per cent lower than a year ago, and concerns remain about the long-term financial health of the company. (Bloomberg, Jakarta Globe)

German utility downgrades value of coal plants:  The German utility EnBW has announced that it will slash US$1.6 billion from its asset valuation of its power plants due to falling wholesale power prices. EnBW says that it expects low prices “over the next few years” will “significantly lower the potential future earnings” specifically from its coal-fired plants. The commissioning of EnBW’s 842 MW Karlsruhe-8 plant this week adds to the oversupply of coal capacity. (EnBW, Bloomberg)

“We’re staring down a climate bubble that poses enormous risks to both our environment and economy. The warning signs are clear and growing more urgent as the risks go unchecked. This is a crisis we can’t afford to ignore. I feel as if I’m watching as we fly in slow motion on a collision course toward a giant mountain. We can see the crash coming, and yet we’re sitting on our hands rather than altering course,”

writes Henry M. Paulson Jr., a Republican who was appointed by George W. Bush as US Secretary of the Treasury.

resources                      take action

CCS 2014: What lies in store for CCS?, International Energy Agency Clean Coal Centre, June 2014. (Pdf)

This is the latest annual overview of the growing challenges facing the development of Carbon Capture and Storage technologies.

Clean Energy Services for All: Financing Universal Electrification, Sierra Club, June 2014. (Pdf)

This brief report outlines how clean energy services could be delivered to the 1.3 billion people who don’t have access to electricity at lower cost than assumed by the International Energy Agency.

Winners and losers - Who benefits from high-level corruption in the South East Europe energy sector, June 2014. (Pdf)

This report reviews a series of corruption scandals in the energy sector in South East European countries, including a brief mention of the Kolubara coal mining scandal in Kosovo.

Sinclair Davidson, A Critique of the Coal Divestment Campaign, Minerals Council of Australia, June 2014. (Pdf)

While this report largely focuses on the divestment movement in Australia, the core analysis is likely to be repeated elsewhere.

Resources and Energy Quarterly, Bureau of Resources & Energy Economics, June 2014. (Pdf)
This report by the Australian government’s resources agency includes chapters on the global outlook for both thermal and metallurgical coal. Those chapters are worth reading.

Tell RBS to stop funding mega coal

Friends of the Earth Scotland and the World Development Movement Scotland are calling on RBS to pull out of financing coal. The RBS Group, which includes Natwest, has put over US$6.8 billion into destructive coal mining companies since 2005 – more than any other UK bank.

The link to the email letter is here.

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