Coal resurgence calls undermine clean energy commitments

 
Chinese miner Chinese coal production is rising despite a massive renewable energy drive

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Coal, the dirtiest and most polluting of all the major fossil fuels, is making a comeback.

Despite stringent carbon emissions targets in Europe designed to slow global warming and massive investment in renewable energy in China, demand for this most ancient source of energy is greater than ever.

In fact, coal was the fastest growing form of energy in the world outside renewables last year, with production up 6% on 2010, twice the rate of increase of gas and more than four times that of oil. Consumption data paints a similar picture, while figures for this year are set to tell the same story.

There are a number of drivers behind coal's renaissance, many of which may be short lived. Others will push demand ever higher for decades to come.

Cheap alternative

Coal consumption in Europe, where governments have been at the forefront of the push to curb carbon dioxide emissions, has risen sharply in recent years.

Coal hard facts

  • Coal is responsible for about 40% of the world's carbon dioxide emissions from fuels
  • Coal generates almost a half of the total amount of electricity produced in the US
  • Coal emits almost a third more carbon dioxide per unit of energy than oil, and 70% more than natural gas
  • Coal provides about a quarter of the world's energy needs and it generates almost 40% of the world's electricity
  • Almost 70% of total global steel production is also dependent on burning coal.

Why? Because it's cheap, and getting cheaper all the time. Due to the economic downturn, there has been what Paul McConnell, senior analyst at energy research group Wood Mackenzie, calls a "collapse in industrial demand for energy". This has led to an oversupply of coal, pushing the price down.

It has also led to a massive surfeit of CO2 emissions permits, pushing the price of carbon, and therefore the cost of coal production, sharply lower.

Equally important, there has been a huge influx of cheap coal from the US, where the discovery of shale gas has provided an even cheaper alternative energy source. The coal has to go somewhere, so it's exported to Europe.

Finally, higher non-shale, natural gas prices are making coal an attractive alternative.

As Laszlo Varro, head of gas, coal and power markets at the International Energy Agency (IEA), says: "All parameters favour coal."

So much so that "coal is [now] being burned as the baseload fuel across most of Europe," says Gareth Carpenter, associate editor at global energy information provider Platts.

Germany's decision to scrap all nuclear power and build more coal-fired power stations can only boost production further.

Just how long coal's resurgence lasts depends to some extent on the global economic recovery and the ability of governments to implement a system that finally delivers a meaningful carbon price.

Global energy demand mix

But, in the meantime, legislation passed more than a decade ago will severely curb coal production over the coming years, according to Mr Varro.

The full impact of the EU's Large Combustion Plant Directive, which is designed to reduce local air pollutants, but not in fact carbon dioxide, is about to be felt, meaning a number of inefficient coal plants will be decommissioned.

As a result, in five years, coal production capacity "will be considerably lower than today", says Mr Varro. The directive will do nothing, of course, to restrict cheap US imports.

Demand explosion

But whatever happens to coal production and consumption in Europe, spiralling demand for energy in Asia, in particular China, will ensure that coal production continues to rise significantly over the coming decades.

Fossil fuel reserves

Fuel Reserves Years left

Oil

1,652.6 billion barrels

54.2

Gas

208.4 trillion cubic metres

63.6

Coal

860,938 million tonnes

112

Source: BP. Reserves calculated at current price using current technologies

Population growth and the exploding middle classes will see to that - in China alone, demand for energy will triple by 2030, according to Wood Mackenzie.

China in particular is spending massive amounts of money on a renewable energy drive the likes of which the world has never seen - plans are in place to build almost 10 times the wind capacity of Germany, for example.

But even this will not be able to keep up with demand, meaning fossil fuels will continue to make up the majority of the overall energy mix for the foreseeable future.

And when it comes to fossil fuels, coal is the easy winner - it is generally easier and cheaper to mine, and easier to transport using existing infrastructure such as roads and rail, than oil or gas.

Demand for coal imports graph

Its price is also relatively stable because, as Mr Carpenter points out: "Coal mines on the whole are located in relatively stable countries free from major geopolitical tensions."

For all these reasons, Wood Mackenzie forecasts coal production in Indonesia, currently the world's fourth-biggest coal producer, to rise by 60% by 2020, while China will import more than a billion tonnes by 2030, almost five times currents levels.

By this date, it expects global demand for imported coal to more than double, helping to push the fossil fuel's proportion of the overall energy mix even higher than it is today.

Carbon capture

Cheap energy is, of course, a vital ingredient in the continued economic growth of developing countries, but the implications of rising coal production for CO2 emissions and global warming are profound.

While China is currently running half a dozen carbon capture and storage (CCS) projects - which aim to capture CO2 emissions from coal plants and bury it underground - the technology is nowhere near commercial viability.

Chinese miner Demand for energy in China will more than triple by 2030, analysts forecast

As Mr Carpenter says, despite all the hype "it looks extremely unlikely that CCS technology is going to be deployed widely in the next 10 years or so".

The inevitable end result is rising CO2 emissions. According to the IEA, emissions from fossil fuels hit a record level last year, while total energy-related emissions and are due to rise by more than 20% by 2035.

"Why we aren't developing CCS for all we're worth is a mystery to me," says Prof Myles Allen at the school of geography and the environment at the University of Oxford.

"It is viewed as just one of a basket of solutions, but it's not - it's pivotal. Without it, nothing else follows."

And CCS lends itself perfectly to coal, precisely because it is such a cheap energy source.

Renewed urgency in developing CCS globally, alongside greater strides in increasing renewable energy capacity, is desperately needed, but Europe's increasing reliance on coal without capturing emissions is undermining its status as a leader in clean energy, and therefore global efforts to reduce CO2 emissions.

 

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  • rate this
    0

    Comment number 188.

    Surely a more efficient use of funding in the energy sector would be for the development of a new way to generate the electricity from heat as turbine generation methods are hopelessly inefficient

  • Comment number 187.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +2

    Comment number 186.

    I am old enough to remember Mrs Thatcher enthusiastically closing down the coal mines while privatising other industries like British Gas.

    Time has proved that her misguided policies have been disasterous for the people of the UK.

  • rate this
    +3

    Comment number 185.

    I live in Doncaster which was surrounded by efficient coal mines some producing in excess for 1 million tonnes per year. Many closed as a result of the rigged Dash for Gas market in the 1990s and others have closed since with the last two: Maltby and Harworth now under threat. Yet we are told COAL HAS A FUTURE. Not with the short-term outlook of successive British governments it hasn't.

  • rate this
    +1

    Comment number 184.

    I can remember over 40 yrs ago attending lectures and seminars on clean coal. What happened? The coal industry was killed off.
    I joke with the children that in their lifetime there will be appeals to people who can remember where the coalfields were. The slagheaps have been recovered and their coal use (fired) in power stations. Reopen the mines next?

  • rate this
    +2

    Comment number 183.

    Makes rather a laughing stock of all the International 'Green' commitments we sign up to, or even the expensive green measures we shackle our economy to. The phrase "China's demand for energy will triple by 2030' lays the lie to all the green policies Europe adopts. We risk impoverishing our economy, and still making no difference to the greenhouse gas problem.

  • rate this
    0

    Comment number 182.

    @158: You can either throw your pollution into the air in huge amounts or bury it in a much more compact form. One way leads to rising sea levels, climate catastrophe and increasing deaths from storms and flooding, the other leads to expenditure on deep storage for the foreseeable. I'm genuinely not sure which is best, but it would be foolish to discount any single option on principle.

  • rate this
    +4

    Comment number 181.

    @168
    "...so a lot of people obviously thought she was doing something right."

    And 'a lot' of people are extremely stupid, naive and ignorant.

    That's the challenge the UK faces today - an ignorant and stupid electorate that continue to vote for the same two parties that between them have destroyed it.

    Given an alternative, they rejected it. Crass stupidity, they deserve what the MP's give them.

  • rate this
    +3

    Comment number 180.

    Surely we need to get the unemployed and prisoners on exercise bicycles, connected to dynamo's, connected to the national grid. In the case of the former, it will keep them fit enough to be conscripted to fight the next illegal war, and the latter can have a week's remission for every megawatt generated.

  • rate this
    +2

    Comment number 179.

    Those 'years left' of fuels is scary. Seems we are all happy to live it up here and now and let out grandchildren or great grandchildren perish with little or no energy other than renewables.

  • rate this
    0

    Comment number 178.

    139.supercalmdown

    Wind farms are mechanical , they have to be manufactured and assembled , ie. blades generators, gearbox, towers etc...this is the expensive part , also like all machines they will eventually wear out and need maintenence...so not a cheap option

    Solar will not realy be effective until science cracks the problem of room temperture superconduction.

  • rate this
    +1

    Comment number 177.

    168.Bossuk
    Mmmmm... we had a large stake in Airbus until Thatcher pulled out, & that company is doing really badly eh? You have no idea, & obviously were one of the misguided who were bribed by privatisation windfalls & council house sales to get her re-elected!
    Also, try reading Empire of the Sky to see how governments screwed the aircraft industry!

  • rate this
    +1

    Comment number 176.

    China is just laughing at us while they use the same coal to develop their economy. While we get mugged by Eastern Europe and Russia paying exorbitant prices buying gas!

    It is a disgrace!

  • rate this
    +3

    Comment number 175.

    A pity that all the North West deep mines have been shut and capped with tons of concrete even though most were profitable!! I'm a miner's son and remember 1984/85 very well. It's the year this country finally acted in such a way that we should never use 'Great' in the title again. Coal can be the future as part of an energy strategy but too many agendas keep 'green' energy in the spotlight!

  • rate this
    -2

    Comment number 174.

    168.Bossuk

    Spot on.

    And coal mining collapsed in the UK because it was completely uncompetitive in a global economy. It was massively inefficient, riddled with Spanish practices, and hamstrung by the unions.

  • rate this
    +1

    Comment number 173.

    166. AshtonFS
    .
    Please clarify what you mean by "hydrogen economy". I would be most grateful.

  • rate this
    0

    Comment number 172.

    158 Weare Just Universaldust
    "imoral to poison our childrens childrens future via burying thousands of tons & tons of nuke poison"

    Umm... where did the nuclear fuel come from originally?
    Burying nuclear waste is quite wasteful though, if we (especially the US) were to upgrade our reactors, most waste can then be reprocessed countless times into new fuel, leaving behind relatively low level waste.

  • rate this
    -2

    Comment number 171.

    147: Yes, you guys really are doomed.
    Dumba*s profiteering, short termism, safety shortcuts, experimental technology, rushed and fudged genetic research, stretched lines of supply for food and essentials.

    It is not if, it's when.
    And then of course everyone will be wailing and moaning and feeling sorry for themselves, but quite frankly, you guys have had this coming for some time now.

  • rate this
    0

    Comment number 170.

    Why do countries decide on Nuclear if they are on a techtonic plate where they are at risk of Earthquake, Tsunami's etc? Irresponsible?

    And if we are Nuclear, doesn't the waste have to be buried and contaminate the ground for many many years to come??

    All this for my kid's and grandkids, (probably with 4 legs by then) to have to worry about??

    Can anyone enlighten me?

  • rate this
    -2

    Comment number 169.

    The above graphs and data show that the UK's energy policy is too based on wind farms.
    The high subsides paid by the public in both their taxes and fuel bills is a sham created to appease a minority of extreme environmentalist.
    The OAP's and poor are paying for the foolishness and dogma of the 'tree hugging' minority.
    Shale gas and coal power to reduce fuel bills should be used until nuclear.

 

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