Coal still relevant despite ongoing green transition
At the recent International Energy Agency press briefing to mark the publication of World Energy Outlook 2012, one presentation slide illustrated perfectly the state of affairs projected for all power generation sources worldwide from now until 2035.
Those in the western world who have seen coal power’s stock decline over the last two decades might have been startled to see just how prominent it remains on a global stage.
Global demand might be falling off the radar in much of Europe, North America and Japan but in China and India it is still hugely significant.
China is a case in point – although the country is strategically targeting renewable and nuclear power generation and in so doing making inroads on cutting carbon emissions, coal will still be its primary power generation source over the next quarter of a century.
Interestingly, the IEA’s graph shows that there will almost be as much renewable power collectively as coal power generation over that 25-year timescale. It’s an indication that while China is taking its responsibility to cut emissions seriously, there is also a balance in favour of maintaining sensible energy security and economic viability.
With the ongoing innovation in clean coal technology over the last decade, coal is not quiet the bad boy of power generation that it once was, but from a green perspective the hope will be that the ongoing reliance on fossil fuels will be minimised as transition to renewables develops to an optimal stage.
The IEA’s biggest message at the publication event is that the world is wasting a valuable opportunity to make economic and environmental gains through actively promoting energy efficiency policies.
Coal, just like gas, will continue to be under scrutiny but there’s no doubt that post Fukushima in particular it has a valuable role to play in energy security.
It has been a big week for coal- based stories with announcements of significant investments in Kenya and Zambia, a huge potential acquisition in the Czech Republic and another potential coal power project in Belarus.
Meanwhile Germany has persisted in bolstering its eventual transition to overwhelming green power generation by continuing to champion coal power as a pillar of its energy security during the energiewende.
The World Research Institute this week released data showing that over 1200 new coal power plant projects are currently at a planning stage. Developing countries like Guatemala, Cambodia, Morocco, Namibia, Senegal, Sri Lanka, and Uzbekistan.
Investment in coal power shows the confidence that exists in what remains a very important source of power generation, despite the bad press that sometimes comes its way.
JP Morgan Chase (NYSE: JPM) has provided more than $16.5bn for new coal plants over the past six years, followed by Citi ($13.8bn) while Barclays ($11.5bn) comes in as the fifth biggest coal backer and the Royal Bank of Scotland ($10.9bn) as the seventh. The Japan Bank for International Co-operation was the biggest development bank ($8.1bn), with the World Bank ($5.3bn) second.
It shows recognition that, while the world must reduce emissions, coal’s continued relevance demonstrates that states also have a responsibility to maintain stable economies.