World Coal Association chief offers reasons why coal has a future

The chief executive of the World Coal Association, Benjamin Sporton, has written an opinion piece in the Financial Times in response to comments from the World Bank Climate Change Envoy, Rachel Kyte, who had argued that coal is a fuel of the past that the world must be weaned off. Dr Sporton points out the discrepancy between the fact that developing nations are embracing coal and the argument that no nation needs it, in doing so recalling the fact that 1.3 billion people worldwide live in energy poverty, and 2.7 billion do not have clean cooking facilities, relying on dung and wood. To further his argument that coal helps to alleviate poverty, he points out that according to the World Bank, around 600 million people, nearly all Chinese, have been lifted out of poverty over the past 30 years (as coal firing has increased around six-fold and 99% of the population have become connected to the grid). He contrasts this with a statement by the president of the World Bank, Jim Yong Kim, when he last year spoke of an “energy apartheid” in Africa, where in Sub-Saharan Africa up to 80% of people are not connected to the grid. For these reasons, Dr Sporton sees that low-emissions coal has a large role to play in the future with high efficiency, low emissions (HELE) plants and CCS. While his argument is persuasive, it does appear to rest on an economic picture that is partially bygone – renewable power generation technologies are far cheaper than three decades ago, and will get cheaper, while oil and gas prices are low too. The future may be somewhere between the two points of view.

EU Climate Commissioner urging remaining nations to pledge reductions before Paris summit

The Financial Times has run a story on the state of greenhouse gas emissions reductions pledges in the lead up to the Paris Climate Change Summit in late November/early December. As of last month, 56 countries, accounting for around 61% of global emissions, had made pledges, with around 140 countries accounting for the remaining 39% yet to make a pledge, amongst them Argentina, Brazil, India, Indonesia, Saudi Arabia, South Africa and Turkey. With only 10 days of formal negotiations left before the Paris summit, EU Climate Commissioner Miguel Arias Cañete is urging the remaining countries to pledge as soon as possible. In addition, he regards the negotiations to date as being unsatisfactory, saying “In the negotiating rooms, progress has been painfully slow. The technical talks are seriously lagging behind the political discussion.” The EU is hoping a deal can be struck for a 60% global emissions cut by 2050, and has welcomed recent US policy moves towards limiting emissions, though he sees the current US reluctance to make binding commitments a stumbling block.

E.ON to fight German government moves to scupper or delay spin-off firm

Reuters has reported on the moves by the German government to scupper E.ON’s plans to split into two companies, and E.ON’s determination to press ahead with the split. As was reported earlier in the year in the Combustion Industry News, E.ON plans to spin its power plants, energy trading activities and oil and gas operations off into a new entity, to be named Uniper, as a means of controlling the risk it sees in those sectors. What remains of E.ON will have a focus on renewable energies. Fearing that the spin-off would allow E.ON to wriggle out of certain responsibilities as a utility, the German government has been developing a new law to extend the period under which parent companies are responsible for its subsidiaries. E.ON CEO Johannes Teyssen has said “I will bring the [spin-off] process to a successful end, no matter what the cost.”

Japan’s Environment Ministry to make objection to a new coal-fired plant for second time in four months

The Environment Ministry of Japan is to formally object to the plan by Chubu Electric Power to build a 1,070 MW coal-fired plant, after objecting to a planned 1,200 MW coal-fired plant, to be built by Electric Power Development and Osaka Gas, in June. Yoshio Mochizuki, the Environment Minister, will submit his opinion to the Ministry of Economy, Trade and Industry, which is promoting coal as a cheaper alternative to gas, with nuclear energy continuing to be shunned following the 2011 Fukushima Daiichi Nuclear Disaster. It is the Economy, Trade and Industry Ministry which decides approvals for power plants, but it must decide them based upon environmental impacts, and the Environment Ministry is allowed to submit its opinion.

In July, the Federation of Electric Power Companies announced they had voluntarily set a target of reducing CO₂ emissions by 35% per kilowatt hour by 2030 (compared to 2013 levels).

Batang project opening ceremony a landmark for Widodo’s infrastructure project push

Late August saw Indonesian President Joko Widodo lead a ceremony to begin the project to build the 2,000 MW, coal-fired Batang power plant project. The project is seen in Indonesia as somewhat symbolic of the country’s struggle to develop infrastructure projects in recent years, and after sluggish economic growth figures, the president is particularly keen to show that he is turning things around. Mr Widodo declared “I don’t want any more projects that have to stop, that have to be delayed, that cannot be completed because of licenses or land clearance issues.” In a comic contrast, however, the ceremony included video footage of bulldozers in a barren field, rather than any actual soil being turned, as many landowners on the chosen site are still refusing to sell their land. Mr Widodo, though, is confident that these landowners will be won over within a month.

Long-awaited Medupi power station begins operation in South Africa

In welcome news for South Africans, the country’s first new large-scale power plant was officially opened on 30 August, the 4,764 MW Medupi plant, 350 km north of Johannesburg. Only the first 794 MW unit is operational so far, with the entire plant to be online by 2019, but it marks a milestone in the Medupi project, which began in 2007, and has been hit by numerous delays and much political controversy. The country has been struggling with severe power shortages for at least a year, with South African President Jacob Zuma declaring in early August that shortages were the biggest problem the country faces. In addition to Medupi and another large scale coal-fired plant currently under construction, the government is seeking to add 9,600 MW of nuclear power by 2030.

Southern Company to buy AGL Resources

One of the US’s largest utilities, Southern Company, has decided to purchase AGL Resources, a power distribution and retail company, as it seeks to take advantage of the abundance of cheap shale gas in the US. Southern will become the largest owner of regulated power assets in the country (which provide an assured and stable income stream), and second in terms of revenue. CEO Tom Fanning told the Financial Times that the purchase of AGL did not signal the company was moving away from coal (Southern is currently developing the Kemper CCS project on a coal-fired plant in the state of Mississippi), but simply diversifying to spread risk. He added that a larger role in gas would enable the company to better manage fluctuating power generation from its renewable power generation capacity.

ACWA and Mitsui & Co to build Omani gas-fired Salalah 2 plant

A new 445 MW gas-fired power plant is to be built in at Raysut in the south-west of Oman, according to one of the winning bidders. A consortium of Saudi Arabian company ACWA Power, Mitsui & Co and Omani company Dhofar International Development and Investment Holding Co has won the contract to build the $US 630 million (€562 million) Salalah 2 facility, which is to be operational by January 2018, and which has a 15-year contract to sell electricity. In the same deal, the consortium bought an existing 273 MW gas-fired plant in the country.

Yorkshire plant Eggborough may be forced to close as carbon tax and lower electricity prices bite

Reuters has reported that EPH, the new Czech owners of the 1,960 MW coal-fired Eggborough Power Station in Yorkshire, UK, are considering closing the plant. EPH bought the plant in January of this year, but falling commodities prices have forced wholesale electricity prices to fall by 9% since then, and in April the UK carbon tax doubled to £18.08/tonne of CO₂ (€24.65/$US 27.65). Consequently, the company says that the plant can no longer cover its operating costs, and has begun consultation with 240 staff in regards to stopping production, while it will also hold discussions with the UK government in the hope of winning some concessions, after last year being unsuccessful in securing funding under the capacity mechanism. EPH estimate they require an additional £200 million (€273 million/$US 306 million) to keep the 53-year old plant running over the next three years.