THE Hazelwood power station in Australia’s state of Victoria started generating electricity 52 years ago. The stark symbol of an era when coal was king, Hazelwood was one of Australia’s dirtiest: its fuel was the Latrobe valley’s brown coal, a bigger polluter than the black sort. The station was due finally to close on March 31st. Days earlier, chimney stacks were demolished at Munmorah, a black-coal station north of Sydney, already closed. Australia has shut ten coal-fired power stations over the past seven years, yet coal still generates about three-quarters of its electricity.

This fits a pattern across much of Asia, which accounts for two-thirds of the world’s coal demand. The biggest economies besides Japan, which hopes to replace nuclear with “clean” coal, are either closing down old plants or rethinking plans to build new ones. This is casting a deepening cloud over the coal industry.

Two reasons explain the looming overcapacity in countries ranging from China and India to Australia (South-East Asia remains hooked on coal). Firstly, electricity demand is stagnant, falling or growing less strongly than expected, which has put considerable financial…Continue reading