Coal's future is safe, but what about the climate?

ABC News Online, Posted Tue Aug 5, 2008 3:25pm AEST

http://www.abc.net.au/news/stories/2008/08/05/2324886.htm

Climate change protesters and coal traders alike say the question of the coal industry's future is daft, but agreement ends there.

For protesters coal contributes drastically to climate change, while for traders coal is an energy no-brainer which offers hope to the 1.6 billion people currently living without electricity.

And they are probably both right.

By mid-century the world could have an extra three billion people and four times the wealth. Somehow, it must also halve carbon emissions from its main energy source, fossil fuels, to rein in dangerous global warming, scientists say.

Power generation accounts for about two-fifths of global emissions, including burning fossil fuels, man-made greenhouse gas, carbon dioxide and coal use.

A spokesman for protesters against a proposed coal-fired power station in southern England, Connor O'Brien, says the coal industry has to know when to stop.

"You have got to say 'here is the line in the sand, we are going to stop it here because it is madness to continue," he said.

The power station would be Britain's first coal-fired station in nearly 30 years.

So far the Camp for Climate Action in Kent has recruited about 600 people, joining four similar protests worldwide this year to target the coal industry in Australia, Germany and North America.

The Kent camp protesters aim to shut the UK-owned EON coal-fired power station, which is slated for replacement on Saturday.

Despite environmentalists' concerns, energy companies say they are racing to meet demand for coal, especially in developing countries where the fuel is cheap and plentiful even in a year where coal price rises have outstripped those of oil.

Merrill Lynch global commodities research head Francisco Blanch says there is no other choice, while admitting this does not bode well for the future of carbon emissions.

"It does not paint a very good picture for carbon emissions, but coal is one of the few fuel sources which has a real capacity to expand," he said.

Meanwhile industrialised nations want to avoid over-dependence on imported gas, given concerns about the security of supply.

Ukraine is now switching to domestic coal after Russia halted gas supplies in a price dispute two years ago.

The future

Trying to balance competing benefits and trade-offs has left the world's energy future wide open.

Nuclear power faces significant public opposition in much of the developed world, while developing countries are either geologically unstable or face a considerable political challenge to sign a non-proliferation treaty, granting access to imported uranium.

Wind farms are growing rapidly but grid connection creates an extra expense, while in poorer nations antiquated networks struggle to handle the volatile power source. Solar power is booming but only provides a fraction of all power.

Renewable energy is often more expensive than oil and coal, but environmentalists stress the benefits in the saved fuel and avoided climate change contributions.

In June a state court in Georgia overturned an air permit for a new coal plant, saying the plant needed to limit emissions of carbon dioxide.

On Monday, green groups dropped opposition to a Texas coal plant after the utility agreed to pay for emissions cuts elsewhere.

Former US vice president and climate crusader Al Gore called last month for a complete US conversion to renewable electricity sources within 10 years, a proposal that won support from both presidential candidates.

But despite such apparent setbacks, coal's future looks safe.

In the United States utilities are building 28 coal-fired plants and another 66 are in early planning as gas price hikes motivate new interest.

In Germany 16 new plants are being built for 2012, despite a European Union (EU) emissions trading scheme which penalises greenhouse gases.

In Italy, Enel is converting to coal from oil-fuelled power plants and Britain has endorsed new coal.

In developing nations growth is rampant.

Poor grid access coupled with frequent blackouts, rapid economic growth and plentiful fuel are driving a frenzy to build new power plants which take just 21 months to build in China.

Over the past three years China has added new coal plants equivalent to Britain's entire electricity-generating capacity each year.

India has approved eight 'ultra mega' plants which will add nearly half again to its present generating capacity.

Indonesia is cranking up its coal-fired power generation by 40 per cent and Vietnam plans to quadruple electricity generation by 2020, almost all from coal according to a source at a European utility investing in Asian power.

South Africa is suffering crippling power shortages and racing to build new coal-fired plants, using abundant local supplies.

Mozambique, Botswana and Nigeria all plan new coal plants.

Even in the oil-rich Middle East, the United Arab Emirates ordered the Gulf's first coal plant last month.

The biggest brake on these plans is not climate protests but a shortage of steam turbines. There is a three-year backlog in the US and Europe following exceptional demand and a 12 to 18-month lag between order and delivery in China, utilities say.

Third way

In light of this, politicians and scientists are reviewing an untested technology called carbon capture and storage (CCS), which could trap and bury underground - in disused oil wells and coal seams - the carbon emissions from coal plants.

The Paris-based International Energy Agency (IEA) says CCS equipment must be fitted to the world's coal plants to halve carbon emissions by 2050, widely held as a minimum climate change goal.

But the agency's own scientists express personal doubts this is achievable.

Senior IEA coal analyst Sankar Bhattacharya says that many of China's new power plants will be in centres of population far from potential CO2 storage sites.

"I do not think in my lifetime I will ever see more than 50 per cent of the coal-fired plants in China being fitted with CCS," he said.

CCS is untested for good reason, the technology will add about $US1 billion ($1.7 billion) to the capital cost of a power plant.

This is not including efficiency losses which will demand a quarter more coal burnt to maintain output and extra water for steam to make up the lost power.

Only a handful of rich countries have so far committed to test it.

Britain will likely spend several hundred million pounds demonstrating the technology but only as a bolt-on to a much bigger plant and will not be fully operational until 2019 according to EON.

It may in the end require a nudge from the climate itself to mobilise deployment of a full arsenal of carbon-cutting technologies, some of which are still in the lab.

-Reuters