Syed Rashid Husain
“COAL did not end, coal era came to an end,” Sheikh Ahmed Zaki Yamani has been underlining for years now – though rather in a different perspective. Indeed coal did not end. Coal has been around, and in abundance, all around. Yet it got sidelined, once oil made an entry on the global energy horizon. Oil was definitely much easier to handle and less pollutant.
But all this is about to change now!
Despite the growing awareness about environmental issues and the need to control pollution, global coal demand, fueled by economic and strategic compulsions, seems surging and surging – and at a rapid pace.
This reemergence of coal, on the global energy horizon, is to a very great extent owed to China. “Global Coal Risk Assessment: Data Analysis and Market Research, “ released on Nov. 20, estimated there are currently 1,199 proposed coal plants in 59 countries. However, People’s Republic of China is the world’s largest consumer of coal, using more coal each year than the United States, the European Union, and Japan combined. Coal power has been the dominant source of energy used to fuel the rapid economic development of China over the past two decades. China relies on coal power for approximately 70-80 percent of its energy, with 45 percent used for the industrial sector and the remainder used to generate electricity. By 2010, China reportedly was responsible for 48 percent of world coal consumption.
China’s coal production too has more than doubled since 1990, from one billion tons then to 2.72 billion in 2008. In 2007, China’s demand for coal outpaced its supply and it became a net importer of coal for the first time. The World Coal Institute estimates that China imported approximately 47 million tons of coal in 2008. China’s 2009 net imports rose to 100 million tons, and to almost 170 million tons in 2010.
In December 2011, China’s Shenhua Group announced plans to build the largest coal-fired power station in Asia over a period of five years.
China’s biggest coal company and officials in the Guangxi Zhuang Autonomous Region agreed to build the 8-gigawatt thermal plant, in the southern port city of Beihai.
Current estimates of the rate at which new coal plants are being built in China vary widely. According to Greg Boyce, CEO of Peabody Energy, China is building 2 gigawatts (2,000 megawatts) of new power plants, mostly coal fired, per week. However, actual statistics gathered by the US Energy Information Administration (EIA) indicate that the pace of building is significantly slower than that.
Chinese coal consumption is now forecasted to account for more than half of global demand by 2014, displacing the United States as the biggest coal polluter on per-capita basis. The IEA sees China’s coal demand increasing by an average of 3.7 per cent per year to 3,190 million tons of coal equivalent by 2017.
And with coal back on the global energy circuit, it is now set to surpass oil as the world’s top fuel within a decade, driven by growth in emerging market. China and others including India are already on the list, as the major consumers. Now energy-starved Pakistan, also seems evaluating seriously to exploit its huge Thar coal reserves to generate power and meet the burgeoning need of a rapidly growing population. The deposits - 6th largest in the world - were discovered in 1991 by Geological Survey of Pakistan (GSP) and the United State Agency for International Development.
Spread over more than 9,000 km2, the reserves are estimated to comprise around 175 billion tons -sufficient to meet the country’s fuel requirements for centuries
And the allure to use coal now is so tempting that even Europe is finding it hard to cut its use despite pollution concerns, the International Energy Agency now says in its recent Medium-Term Coal Market Report. As per the report, global coal demand will rise 2.6 percent annually over the next six years and challenge oil as the top energy source. The report said that coal usage is to rise in all regions except the US, where cheap natural gas has dampened (coal) demand.
The IEA report on coal thus found that due to this new-found love with coal generated power plants, countries which had committed themselves to reducing carbon emissions, are now finding it difficult to resist the temptation to use coal. A number of European countries have seen their use of coal for electricity consumption jump at the beginning of this year, including by 65 percent in Spain, 35 percent in Britain and 8 per cent in Germany. The shale gas boom in the United States has led to a slump in coal prices there and subsequently on the market in Europe, where natural gas remains expensive. This gave a price advantage to coal beginning 2011, with the low price of polluting in Europe’s emission trading scheme also a contributing factor. “...low coal prices, supported by a low (emissions) price resulted in a significant gas-to-coal switch in Europe,” said the report.
“Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st century,” said Maria van der Hoeven, the Executive Director of the Paris-based International Energy Agency.
Economic growth is expected to push up further coal’s share of the global energy mix, “and if no changes are made to current policies, coal will catch oil within a decade,” she said in a statement.
The latest IEA projections see coal consumption nearly catching oil consumption in four years time, rising to 4.32 billion tons of oil equivalent in 2017 against 4.4 billion tons for oil.
Does this all mean that the world has lost its war on environment? If indications from IEA, the world’s most respected energy body is to be believed, it seems so. The world is on the very verge of losing this very important battle against global heating. The IEA also doesn’t foresee, over the next five years, any widespread take-up of technology to capture and store underground carbon emissions from burning coal. And the IEA top boss, Van der Hoeven warned that unless there is technological progress or a replication of the US experience (of tapping shale resources) “...coal faces the risk of a potential climate policy backlash.”
The energy world seems heading to a ‘black’ future!