Response to G7 statement and Obama Directive

The recent statement from the G7 leading industrial nations to cut greenhouse gases by phasing out the use of fossil fuels by the end of the century has certainly hit the headlines. It has now been followed by the nearer-term Obama Directive, which appears to be designed to move the USA strongly towards the renewables model. This has sparked a range of comments about the impact on China, Japan and by inference other Asian countries, with many suggesting that these countries will have to follow suit.

In reality, there is no one-size-fits-all solution to the global energy needs, with very different economic models operating, due to different energy demands and policies.  Overall, the idea that renewables alone can meet future energy needs is seriously flawed. All energy sources have a role to play in meeting global demand and that is the case both for developed and developing countries. For the Asian region, Africa and other parts of the developing world, coal offers the best way forward when trying to balance the energy trilemma of security of supply, economic competitiveness and environmental performance. The most modern coal fired plants available today, in OECD or developing countries, are showcased in Japan and China. These can achieve the same emissions performance standards as gas-fired plants while the introduction of carbon capture and storage (CCS) can limit carbon emissions to near zero. As such, despite the protestations of the World Bank and some other lenders, coal can bring affordable, reliable electricity to hundreds of millions of people in developing and emerging economies, with very low carbon emissions.

For the future, there are many development programmes underway to achieve at least a 20% improvement in efficiency compared to current state-of-the-art coal-fired power plants, together with innovative means to lower the costs of CCS. Rather than squeezing out near zero emissions from coal units, there should be a concerted effort to install such high efficiency low emissions power plants worldwide.

The longer term G7 declaration is interesting for what it doesn’t say. Over the next 85 years, these seven nations are in some way going to stop the use of any oil, gas and coal by any nation worldwide. At best, it can be seen as a widely optimistic dream, at the worst a draconian nightmare. However, if this goal becomes an overarching drive, it will reshape energy policies and development plans. There could be a move away from coal utilisation research and then we can all forget about the drive for high efficiency low emissions power generation from coal and gas, coupled with CCS to achieve near zero emissions. We can instead see a broader commitment to following the German line of the Energiewende, with the application of ever more renewables failing to meet the economic requirement for affordable, reliable, grid-based electricity.

As the IEA Clean Coal Centre has shown in various acclaimed studies, coal has a key role to play in the future as indeed do the other fossil fuels. There is a need for some joined up thinking that establishes an integrated plan to address climate change while ensuring adequate economic development routes for all.