  We extend the dynamic van der Waals model introduced by A. Onuki [Phys. Rev.
Lett. 94, 054501 (2005)] to the description of cohesive granular flows under a
plane shear to study their hydrodynamic instabilities. Numerically solving the
dynamic van der Waals model, we observe various heterogeneous structures of the
density in steady states, where the viscous heating is balanced with the energy
dissipation caused by inelastic collisions. Based on the linear stability
analysis, we find that the spatial structures are determined by the mean volume
fraction, the applied shear rate, and the inelasticity, where the instability
is triggered if the system is thermodynamically unstable, i.e. the pressure,
$p$, and the volume fraction, $\phi$, satisfy $\partial p/\partial\phi<0$.
