The loss-making Adani Power’s 4,620 MW plant in Mundra, Gujarat, has been granted a lifeline by the Central Electricity Regulatory Commission (CERC) after it allowed the developer to increase its retail tariff to account for the progressively higher costs of imported coal. The ruling only applies to 2,000 MW of the plant’s output, but the higher tariff can now be passed on to end customers.
The ruling could set a precedent for a number of India’s other privately-owned coal plants that are running on losses, and could be cited by other developers such as Tata Power looking for similar reprieves on their PPAs. Tata Power’s coal at Mundra is also running at heavy losses because of costlier coal imports.
Rio Tinto endorses Paris Agreement-compliant stance on industry associations, future of coal
Mining giant Rio Tinto has announced that it will work with industry associations – including in Australia – to further their advocacy in line with Paris Agreement-compliant climate action. This includes not only recognising the key role renewables play in reducing emissions, but also driving the debate against coal power subsidies.
Additionally, the world’s largest miner will demand that any use of coal in the medium to long term be consistent with the Paris Agreement targets. The move is highly significant as Rio Tinto wields immense influence in mining operations and industry lobbies, and the official announcement could force other members to adopt similarly climate-positive guiding principles.
India: Thermal power addition slumped to 29% of FY19 target, stressed assets could worsen unemployment figures
New capacity addition for thermal power in India slumped to 2,130 MW for 2018-19 — a mere 29% of the target of 7266 MW. The slowdown is attributed to the growing share of cheaper renewable energy alternatives, unreliable coal supply linkages and dearth of long-term PPAs for new coal power developers.
Additionally, a new IISD report suggests that stressed thermal power assets could worsen the country’s unemployment figures. It says the government must take steps to suitably re-skill the affected workforce — despite the difficulties with absorbing all the workers into other industries, such as renewable energy.
Norwegian pension fund to tighten coal exclusion, cleared to invest in unlisted RE projects
The world’s largest sovereign wealth fund – Norway’s trillion dollar-strong pension fund – may further tighten its divestment from coal after its government proposed to introduce an absolute cap of 20 million tonnes of annual coal output, or 10 GW in power generation for companies the fund is invested in.
This means the fund may divest an additional $4.17 billion worth of holdings, including from Glencore, BHP (UK & Australia) and RWE. The fund has instead been cleared to invest up to $14 billion into renewable energy projects with an estimated market worth of $2.7 trillion in 2017 — including ones that are not yet listed on stock markets.
Japan’s Mitsubishi UFJ to cut loans to coal power by 50% by 2030
Japan’s Mitsubishi UFJ Financial Group (MUFG) has announced it will reduce its loans to new coal power plants outside Japan by 30-50% by 2030. MUFJ will also extend less finance to new coal power within the country – the figure for which stood at $9.9 billion for 2016 – September 2018