NEWS

Response to ‘Coal hits a plateau’ by the FT, September 18

The Financial Times article provided a welcome and refreshing analysis of the latest International Energy Outlook 2017 published by the US Energy Information Administration. Too often the news media prefers to cherry pick analysis and assumes that all the research and development in the world is occurring in just a handful of technologies like solar, wind and energy storage. Crook, however, made some observations on the outlook for coal that few journalists would pick up. Any plateau in projected coal demand will materialise for a number of reasons; chiefly from a slowdown in the global economy, but also from the “continual improvement in known technologies based on current trends” as well as “current laws, regulations, and stated targets”. Surprises can be expected from both technology and politics.

The coal power sector is often portrayed as last century’s technology, which ignores the immensely innovative trends occurring in the field of high efficiency and low emission (HELE) coal plants. As Crook notes, the revolutions in shale oil and gas and in renewable power are vivid demonstrations of the uncertainties inherent to markets and technological progress. The technological progress achieved in the USA by utilities using mercury scrubbers, and the new fleet of ultrasupercritical coal power stations being developed in Asia should not be overlooked.

Replacing old inefficient coal plants with HELE technology will inevitably result in less coal burned per MW in future. This is done without robbing emerging economies of affordable and reliable electricity 24/7; and with none of the commercial and technical uncertainties associated with nuclear power. Tighter emission regulations will continue to drive innovation in the HELE coal sector, not just from an efficiency point of view, but also to boost plant performance, operational reliability, and lessen demand for precious water resources.

Whether peak coal in China is happening is not yet certain. Whether coal will make a comeback is too early to ascertain. 

The drop in global coal demand has been correctly observed for the last two years, much of this coming from a dip in coal demand in China. Yet, while China’s coal fleet operates at less than 60% load factor, there is a lot of headroom for coal burn to increase again in the power sector without building new stations. 

If the policy makers In Asia hit the right targets for cutbacks, such as traditional use of coal and biomass in residential and commercial sectors, the power sector can adapt to stricter emission targets using existing HELE technologies.

One thing is certain – the disappearance of coal in the world economy is unlikely. Asia has made a choice to develop HELE coal to boost economies in countries which have spent years dependent on cheap pipeline gas and hydro power; both of which are seeing resources dwindling in Asia. There is little future for old subcritical coal plants, except under the most unusual circumstances. HELE technology ensures coal will be used more efficiently and cleanly than ever, and developments continue in Asia by both Western and Eastern technology companies that may pass by many analysts in the west. Thankfully in this case the EIA and the FT have taken note.

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