The anticipated growth of coal demand (see Graph 1 – Part 1) will also be driven, and increasingly so, by coal’s capability to accommodate societal concerns: economic growth, environmental protection, mitigation of climate change, improved labour safety and health standards, and community development. In the absence of response, these concerns will become the limiting factor to coal’s growth.
Facilitating technology and knowledge transfer to developing countries
Coal demand is expected to increase during the next three decades everywhere in the world, except in western Europe. The increase would be strongest in the developing countries: China, India, South-East Asia, sub-Saharan Africa and Latin America. Coal demand by developing nations would actually double from 1.5 bill t in 2000 to 3.1 bill t in 2030. By that year, 60 % of world coal demand would be generated in developing countries, against 45 % in 2000.
If the developing countries are the growth engine behind global coal demand, coal remains an important, indeed indispensable, growth engine for developing countries. Despite competition from natural gas, coal would account for 33 % of total primary energy supplies in 2030 (against 39 % in 2000). More importantly, in developing countries coal would secure 53 % of electricity generation in 2030, against 56 % in 2000. Coal-based power generation would more than triple.
Enabling a prospering coal industry of the size and dynamics suggested above, requires continued efforts on the part of governments, industry and the international community with regard to:
- technology transfer: financing technology transfer to developing countries meets serious difficulties, unless the macro-economic and policy frameworks encourage investors. Cumulative investment needs of developing countries for coal mining and shipping during 2001-2030 amount to $261 billion IEA notes that the risk of a shortfall of foreign investments is greatest in developing countries, where ownership remains in government hands. Neither domestic capital markets nor government budgets have been and will be able to provide such funding. International financial assistance in demonstration projects (mining, liquefaction, washeries, methane drainage, waste handling, IGCC, coal slurry pipeline), have proven their value, if coupled with a legal regime attracting foreign investors. The number of such projects needs to be multiplied, until such time that the costs of modern technologies have been brought down.
- restructuring: recent policies of developing countries aim at a greater degree of private sector involvement in mining and power generation, including privatisation. At the basis of success are a reduced role of governments in operations, the gradual phaseout of price controls, import tariffs and subsidies, and the removal of restrictions such as on the use of coal production in captive power plants. The main issue is to supply cheap energy to the poor, i. e. to change the system of producer subsidies to a system of consumer subsidies.
- management: the transfer of efficient management practices, through internationally operating companies or otherwise, enables significant productivity gains. The tools are company-supported education, training and community relations.
- standards: in developing countries, the setting of health, safety, environmental or quality standards has to obey the triple objectives of economic, social and ecological development. This demands a gradual, fine-tuned move from minimum to more constraining standards rather than the application of first-world standards. International financial institutions should recognize such a step-wise strategy as valid, when determining the conditions for loans.
Abating local/regional pollution: a matter of worldwide deployment of proven technologies
Proven technologies exist to reduce the emission of dust, SO2, and NOx from coal-based power generation, to recycle toxic effluents, by-products and coal bed methane, to mitigate subsidence or to reclaim opencasts. The issue is one of the worldwide deployment of best practice. Stricter national and transboundary emission standards and leadership of global players would pave the road.
Mitigating climate change: clean coal combustion and carbon sequestration (***)
As pointed out in section 3.3 above, rising efficiencies of coal combustion in power stations reduce fuel use and, hence, CO2 emissions.
There exist several technological options (with variants) with high and growing efficiencies. For hard coal, supercritical pulverised coal combustion presently operates at efficiencies of 45 % and offers prospects for an increase to 48 %; this technology remains the preferred option for large units and for up to 2020. For lignite, supercritical pulverized firing attains more than 43 % (in the so-called BoA unit of the German plant of Niederaussem), with a target of 50 % and more if pre-drying and new materials were used (time frame 2020). Fluidised bed combustion, suitable for smaller capacities and high ash coals, presently operates at 40 % efficiency with prospects for up to 44 %. Integrated gasification combined cycles (IGCC) – at demonstration stage – achieve 43 %, but may attain 51 to 53 %.
However, efficiency is only one parameter. The choice of the technology depends on many site-specific criteria such as the size of the unit, the load regime, the fuel used, the marketing or recycling of by-products and environmental legislation. Be that as it may: the worldwide application of these advanced technologies would theoretically avoid 1.8 bill t of CO2 per year, equivalent to 7.5 % of present world CO2 emissions.
Coal does have every interest to develop carbon capture and disposal technologies to technical and commercial maturity in the next 15 to 20 years. International research is underway, such as the “Zero Emission Coal to Hydrogen Alliance” (ZECA), the US DOE “Vision 21” or President Bush’s “FutureGen” Programme. The EU Framework Programmes for Research and Technological Development for 2002-2006 include a chapter on capture and sequestration of CO2. A Charter on carbon dioxide (CO2) was signed in June 2003, creating the Carbon Sequestration Leadership Forum; 13 countries and the EU participate. The IEA Clean Coal Centre is since long active in CO2 emission analysis and control. Cleaner coal, indeed fossil fuel, technologies appear to be a major possible and feasible long-term means to seriously address the two interrelated issues of reducing energy-related GHG emissions and of enabling universal access to energy. However, related costs have to be brought down and least cost carbon mitigation technologies of all sorts need to be judged in a competitive market context. By contrast, alternative policies to wean the world of its dependence on fossil fuels require comparatively higher price increases which would be at least equivalent to the two oil shocks of the 1970s every 10 years. This would engender corresponding losses of economic growth, prolong the use of traditional fuels by poor people in developing countries and exacerbate the global level of GHG emissions.
Coal needs to care more for its markets other than electricity generation in power plants. Apart from the gasification of coal prior to its combustion in IGCC processes mentioned under section (***) above, the perspective of comparatively low coal prices aroused renewed interest in its liquefaction. In China, the construction of a coal liquefaction plant has begun in Majiata, Inner Mongolia. In the US, the Gilberton coal-to-power-and-clean-fuel demonstration plant is at its final stage, awaiting a favourable environmental impact statement, tax breaks and a government loan for May 2004. In Australia, a letter of intent has been signed for a large integrated power-andliquids plant in Victoria. Regarding underground gasification, a project has started in the United Kingdom with the ambition to tap coal reserves from beneath the North Sea with minimal environmental impact. Ultimately, synfuels and hydrogen emerge as vectors for coal use.
Evidently, these projects are forerunners, driven by a comparatively high price environment and tensions in the Middle East. Also, they benefit from specific favourable conditions. But it is telling, that they see the light of the day at a time when oil and gas reserves are plentiful.
Ultimately, synfuels and hydrogen emerge as vectors for coal use . The longer-term perspectives of synfuels from coal are clearly related to the depletion of cheap conventional oil reserves: presently too expensive, synfuels from coal may contribute about 100 Mtoe (or 4 % of world liquid fuel demand) in 2020 and up to 660 Mtoe (14 %) by 2050.
Coal’s road to public acceptance
There is still a striking cleavage between coal’s perceived image and coal’s real performance. Regrettably, there has not been so far an industry effort to address this deficit at the global level. Coal clearly has key attributes, however. It is incumbent upon the global industry to take action now to market them to the public and policymakers alike so as to ensure that coal provides a sustainable bridge to the future.
Source: World Energy Council, Geneva/London