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Why The World Continues To Count On Coal

World Coal,


Globally, 2012 was a year of great change and challenge and there is no doubt that this was reflected in the coal sector. As we enter 2013, jobs and the economy remain key concerns in the US and around the world, yet the long-term fundamentals for coal remain strong. BP’s Statistical Review of World Energy 2012 showed that coal consumption grew by 5.4% in 2011, the only fossil fuel to record above-average growth. Coal now accounts for over 30% of global energy consumption, the highest share since 1969. Consultants Wood Mackenzie project that coal will overtake oil as the world’s largest energy source this year.

Global demand growing

Global demand for coal continues to grow - and the seaborne market for coal is expanding rapidly. Over the next five years, Peabody Energy projects that global demand for coal will grow by 1.3 billion short t (1.18 billion t), with China and India driving the lion’s share of that increase. This is comprised of more than 1 billion short t (907 million t) of new thermal coal demand to support over 395 GW of new generation. Over the same time frame, we see some 200 million short t (181 million t) of additional metallurgical coal demand to serve estimated steel production growth of 20%. We are already seeing new power and steel plants in China and India being built along the coast to accommodate the demand centres and enable greater imports.

China’s coal imports have grown dramatically over the last several years, and are projected to double between 2011 – 2016. Under its current policies scenario, the International Energy Agency (IEA) projects that coal will represent 68% of China’s electricity generation by 2020. In India meanwhile, large-scale blackouts have highlighted the country’s need for greater coal-fired power generation along all aspects of the value chain. Nearly 70 GW of coal plants are expected to come online in the next five years, requiring about 250 million short t (227 million t) of added coal as these plants move to full utilisation, much of which may come from imports. India also has US$ 1 trillion in infrastructure needs in its five-year plan, requiring both steel and power to put into place.

Providing energy, economic and environmental solutions

Energy access is a human right and a rapidly rising need. More than half the world’s population still lacks proper energy access and 1.3 billion people have no access at all. We lose a staggering 1.5 million people to the effects of energy poverty each year.

According to the UN Development Programme’s Human Development Report, every tenfold increase in electricity is linked to a 10 year increase in longevity, with a better standard of living, higher literacy and a much healthier population. In its World Energy Outlook 2011, the IEA also shows a near perfect correlation between expanding coal use and growing economies. Broad energy access to reduce global poverty is Peabody’s top priority and coal remains the only sustainable fuel with the scale to achieve our energy access goal.

Greater deployment of clean coal technology is the key to achieving what we at Peabody call the “3Es”: energy, economic and environmental solutions. Last year, as chairman of the National Mining Association (NMA), I took part in MINExpo INTERNATIONAL® 2012, an event held every four years to showcase the state-of-the-art technologies being used right across the industry. MINExpo 2012 represented the largest single international assembly of mining equipment in history and its sheer scale was a testament to the cutting-edge advances that have made mining safer, more productive and more efficient than ever before. Many of the mining sector’s best technologies are being deployed to ensure coal’s sustainable future.

As the world increases its use of coal, Peabody is investing in, and advancing, clean coal solutions that will help us to achieve our goal of near-zero emissions. A major step on the path to near-zero emissions from coal is deployment of supercritical technology. These plants are highly efficient and low emissions. Even their CO2 emissions rate is as much as 40% below the oldest plants, and some 429 GW of these plants are in operation or construction worldwide. China leads this effort, representing more than a third of the world’s advanced generation. Peabody is the only non-Chinese equity partner in China’s low-carbon GreenGen project, currently undergoing commissioning. Once completed, GreenGen will be the world’s largest near-zero emissions coal plant with carbon capture at full build of 650 MW.

A global supercritical programme would create a major reindustrialisation, delivering significant economic returns, while helping us to achieve our global environmental goals. According to the IEA and Peabody analysis, the annual benefit of operating 1000 GW of green coal plants would include a US$ 470 billion increase to economic output, a US$ 170 billion boost to personal income, US$ 89 billion in tax revenues and 1.4 million jobs for plant operation and supply chain contributions. The addition of these advanced plants provides a stable, long-lived, affordable source of electricity around the world.

Globally, we will continue to count on coal and, despite the challenges of 2012, as we enter a new year there is much for the sector to be thankful for - and much to look forward to. As emerging nations continue their extraordinary development journey in the decades to come, coal is the commodity that will provide both the energy needed to power new cities and the steel used to build them.

Author

Gregory H. Boyce is chairman and CEO of Peabody Energy. Peabody is the world’s largest private-sector coal company and a global leader in sustainable mining and clean coal solutions. The company serves metallurgical and thermal coal customers in more than 25 countries on six continents.

Read the article online at: https://www.worldcoal.com/coal/23012013/why_the_world_continues_to_count_on_coal_291/


 

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