World coal perspectives to 2030 | Part 2 Accessibility Of Energy: Coal’s Growing Strength

Income growth versus growth of energy prices

IEA and EU-WETO anticipate world per capita GDP to rise by about 2 % per year until 2030. Income growth would be faster in developing (2.8 %) and transition economies (3.4 %) than in OECD countries (1.6 %). Access to commercial energy would be eased if income growth exceeds the rise of energy prices. International fossil fuel prices would rise less fast than income, thereby opening access to commercial energy to a growing number of people. IEA estimates that by 2030, this differential and

other factors would allow 2 bill people to have access to electricity and other modern fuels. However, another one billion people would remain stranded in energy poverty.

World coal perspectives to 2030 | Part 2 Coal’s Growing Strength

Read more:

World coal perspectives to 2030 | Part 1: Availability Of Energy: Coal’s Lasting Asset

World coal perspectives to 2030 | Part 3: Accessibility Of Energy: Coal’s Technological Agenda


Coal’s growing price competitiveness

After a significant decline of international coal prices during the 1990s, coal prices are expected to be stable or to rise only slightly in comparison with oil and gas prices. As a result, coal will lead in terms of price competitiveness and accessibility.

Behind coal’s performance: productivity and efficiency gains

Coal’s price performance is in last instance caused by productivity gains in mining and improved efficiency in combustion. Productivity per man and year rose between 5 and 10 % in the 1980s and by between 10 and 15 % in the 1990s. This growth was not only due to increased labour productivity, but also to the closing of uneconomic or small (and often illegal) mines, the liberalisation and restructuring of coal industries, the transfer of know-how and technology to newcomers and the expansion of opencast mining versus underground mining. Productivity growth is expected to continue.

At present, average world coal combustion efficiency in power stations approximates 32 %, while state of the art is 42 to 45 %. Advanced clean coal combustion technologies promise efficiencies of 50 to 53 %. As new plants penetrate the market, efficiencies will rise. EU-WETO estimates that by 2030, 72 % of world coal-based power plants use advanced technologies with efficiency at 49 to 50 %. EU[1]WETO also estimates that these plants could displace gas-fired combined cycles down to 4500 h/year even in regions with access to reasonable priced gas.

Investments in coal mining and combustion

Coal mining is less capital-intensive than the extraction of oil and gas. The mining of a ton of coal (in toe equivalent) requires less than $5, compared with $22 for the extraction of oil and almost $25 for gas. However, coal combustion associated with a higher environmental policy risk than its main competitor – gas, unless matched by clean coal technologies. Gas, by contrast, seems to face a risk of higher prices, affecting its competitiveness.

IEA estimates the cumulative investment requirements for coal mining and shipping (including port facilities) during 2001-2030 at $398 billion. These would support an increase of world coal production from 4595 million t in 2000 to 6954 million t (reference scenario).

Cumulative global coal investments needs are shared equally by developed and developing nations, with China requiring 34 %, the United States and Canada 19 %, Australia and New Zealand 9 %, the transition economies 8 %, OECD Europe 7 % and India 6 %.

If investments for coal-based power stations were added, the total cumulative investment needs would amount to $1900 billion. This is 12 % of the investments required by the world energy supply industries as a whole ($ 16000 billion).

Source: World Energy Council, Geneva/London

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