The world’s ferocious demand for coal

by Milan on February 13, 2011

in Climate change, Coal mining, Economics, Ethics, Power plants

This is very worrisome:

The IEA estimates that China, which generates more than 70% of its electricity with coal, will build 600 gigawatts (GW) of coal-fired power capacity in the next quarter-century—as much as is currently generated with coal in America, Japan and the European Union put together. Nomura, a Japanese bank, thinks that may be an underestimate. It reckons China will add some 500GW of coal-fired power by as early as 2015, and will more than double its current generating capacity by 2020. It expects Indian coal-fired power generation to grow too—though more slowly.

Even developing countries with vast quantities of coal under home soil will find themselves unable to dig it out quickly enough to meet demand. China, the world’s biggest coal producer by some distance, has turned to foreign suppliers over the past couple of years and is likely to rely on them even more in future. Its voracious appetite for energy and steel means it will need at least 5-7% more coal each year. Citigroup reckons China will import 233m tonnes in 2011. As Daniel Brebner of Deutsche Bank points out, that is considerably more than the annual capacity of Richards Bay in South Africa or Newcastle in Australia, the world’s biggest coal ports.

If there is to be any hope that rapidly developing states like India and China will switch to a low-carbon development path, it seems essential that rich states like Canada and the United States lead the way – demonstrating that de-carbonization can be achieved at an acceptable cost.

Unfortunately, that seems to be the last thing on the minds of our politicians at the moment. Indeed, developed states remain happy to export coal to places like China, then import some of the products it helps to produce:

As environmentalists point out, rich countries that spurn coal-fired power while exporting the rocks to countries with less ambitious emissions targets are merely shifting the problem around the globe.

For the world as a whole to succeed in reducing greenhouse gas pollution, there are going to need to be restrictions on digging up fossil fuels, as well as importing and exporting them.

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{ 5 comments… read them below or add one }

. October 20, 2011 at 10:33 pm

Privatising Indian coal
Powering the tiger

GRABBING hot coals is usually a stupid thing to do. But investors who scrambled to buy shares in Coal India, a big state-run firm, thought their fingers safe enough. India’s biggest-ever initial public offering (IPO) was oversubscribed on its second day, October 19th. By selling 10% of its shares, the government raised about 150 billion rupees ($3.5 billion). The world’s largest coal producer, which extracted more than 430m tonnes last year, is one of India’s ten biggest firms by market value. Local newspapers crowed that India was now in the “IPO big league”.

Nearly everyone seems happy. The government has a trainload of cash. Neither unions nor demagogues made much fuss. Reform-minded officials may take this as a green light to carry on quietly privatising other state-run enterprises, albeit slowly. And a few more Indians are now retail investors, encouraged by a small discount on the share price.

. November 9, 2011 at 10:04 am
. March 4, 2012 at 7:27 pm

Energy in India
The future is black
Power is essential for India’s long-term growth. But electricity is unlikely to flow fast enough

STAB a finger at the middle of a map of India and you will hit Nagpur. Some 20 miles (32 kilometres) north-west of the city is a sloping tunnel bored into the rock. Ride two miles down into the gloom, hanging from a wire, and after a torch-lit hike past underground streams and conveyor belts you arrive at a black wall. Sweating men are rigging it with tubes of explosives and wire detonators. Soon they will blast it apart, and down should tumble tonnes of India’s most important commodity: coal.

In coal India has something as abundant as people. As more Indians enjoy the trappings of middle-class life and the country industrialises, demand for coal-fired electricity will continue to rise smartly, roughly in line with economic growth. India may not have much oil or gas to call its own but it has the world’s fifth-largest coal reserves. And it has successfully raised a mountain of the other raw material needed to turn carbon into sparks: capital. Some $130 billion has been ploughed into the power industry in the past five years. Of that, $60 billion or so has come from the private sector—probably the largest-ever private-sector investment India has seen.

. March 4, 2012 at 7:45 pm

Solar can shine in India

SIR – Your report on energy in India focused on the country’s reliance on coal, pointing out that this was problematic because Coal India would not be able to provide enough of it (“The future is black”, January 21st). The article completely ignored the potential impact of solar photovoltaic cells, the cost of which is rapidly declining. By 2017 solar power is expected to be competitive with thermal coal plants that use more costly imported coal. The gestation period of large coal plants is six to seven years. The gestation period of solar plants is less than a year. Hence India can afford to stop investing in coal immediately and rapidly put up large solar PV plants beyond 2016.

This will enable existing capacity to be used round the clock, and therefore increase power generation. Beyond 2017 solar energy costs will continue to decline, making it competitive at some point with low-cost coal as well.

Nadir Godrej
Mumbai  

SIR – India’s power-distribution process is the biggest hindrance to meeting energy demand. India recently had the capacity to produce 185 gigawatts of electricity, but the peak time supply was 118GW, which fell short of demand by some 10%. The latest “Electric Power Survey of India” states that the inefficient transmission and distribution process “loses” about 30% of electricity, compared with 6% in America and China.

Amit Ananpara
Chicago

. March 14, 2012 at 9:45 pm

China is working hard to develop other sources of energy and to lessen the “energy intensity” of its growth (the energy needed per extra unit of GDP). It is already much the world’s biggest user of hydroelectric power, has almost as many new nuclear-power plants planned as the rest of the world put together, and is expanding solar and wind energy. But, according to projections by McKinsey, a consultancy, even taking all this into account, China is still likely to consume 4.4 billion tonnes of coal in 2030, when its carbon emissions are expected to have increased from 6.8 billion tonnes of carbon-dioxide equivalent in 2005 to 15 billion tonnes. Of these nearly 40% will come from power generation.

So attention is focused on mitigating the harm coal power will do. Efforts to curb emissions from fossil-fuel power stations by “carbon capture and storage” are still no more than a good idea yet to be realised. Technologies to make generation cleaner and more efficient are available, however. But, as the IEA noted understatedly in a report last year, they “are not as widely deployed as they should be.” And, as the same agency has also argued, time is running out to limit emissions to levels that might keep the global temperature rise to 2°C this century. On today’s plans, it estimates, that rise will already be locked in by existing buildings and facilities, such as power plants, by 2017. The rise of Asia has costs, as well as benefits.

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