In view of the apparent commitment by the world’s major economies to slash emissions of carbon dioxide in a bid to tune the climate to our liking, seeing a future for coal may sound perverse. Many commentators are warning of shareholders in fossil fuel companies taking a hit as the ‘stranded assets’ of coal and oil reserves plunge in value as demand dries up. Maybe that will happen at some future date, but there seems no danger of it coming to pass in the foreseeable future.
Renewable energy – mainly wind and solar – is supposed to supplant fossil fuels over time to ‘decarbonise’ the electricity generating system. Europe is leading the charge, but there is little sign yet of the sort of radical change deemed necessary. The very useful electricitymap website shows an (almost) real time picture of generation patterns and carbon intensity for EU and EEA countries.
On a fairly average mid-February morning (10° in London, 5° in Berlin, 8° in Paris), the countries with the lowest carbon intensity were France (98gCO2eq/kwh), Sweden (62CO2eq/kwh) and Norway (31CO2eq/kwh), none of which relies to any real extent on wind or solar energy. The French generation network is dominated by nuclear, Sweden generates its electricity primarily from hydro and nuclear, and Norway is in the fortunate position of running almost entirely on hydroelectricity.
Meanwhile, Germany and Denmark, with Europe’s largest fleets of wind farms (and, in the case of Germany, solar panels) had carbon intensities of 469CO2eq/kwh and 360CO2eq/kwh respectively. By far the biggest generation source in Germany this morning was coal, while Denmark relied mainly on coal and gas, with significant amounts of energy being delivered from Norway and Sweden via interconnectors.
The Achilles heel of wind and solar generation is their intermittency and need for full backup to be available. And this problem just affects the electricity sector, the easiest part of the total energy mix to be moved away from fossil fuels. The other two sectors – transport and heating – are more difficult, but the most likely scenario is for them also to be powered by grid electricity in the longer term. Everything will come down to how we generate this electricity in a much-expanded system.
The continued use of coal in Europe is simply down to economics. In Germany in particular, the mix of incentives for renewable energy, coupled with the phasing out of the nuclear fleet, have pushed generators towards the use of domestic coal (mainly lignite) rather than imported gas. Meanwhile, in global terms, coal use continues to grow, particularly in the (comparatively) rapidly growing and already large emerging economies of China and India.
A quick look at what the International Energy Agency has to say about coal reinforces the fuel’s importance in today’s world (“Coal supplied 1520 Mtoe of the 3292 Mtoe of additional global primary energy supply from 2000 to 2012”) while pointing out that the transition to more efficient technologies is slow and that “the dramatic reduction of CO2 emissions that our climate targets require is possible only through development of carbon capture and storage (CCS) technologies. Progress on CCS is very disappointing.” Despite this, another headline from their site is that 200MW of new coal generation capacity was added each day between 2010 and 2014: that’s over 70 1GW power stations annually.
So we seem to be caught between the aspiration to slash emissions and the reality of continued expansion of coal burning. For different perspective, we can turn to the BP Energy Outlook for 2016. This looks forward to 2035, with a base case scenario in which global GDP more than doubles as world population climbs towards 9 billion. Four-fifths of the GDP increase is on a per capita basis; on average, we should all be 80% better off in real terms.
Continuing the long-term trend, this economic growth is fuelled by greater use of energy, but at lower energy intensity. To double economic output, energy consumption is projected to rise by just 34%. 80% of this is expected to come from fossil fuels, with oil remaining the largest source and gas overtaking coal by a small margin to be in second place. Nevertheless, overall use of coal is projected to grow, although at a sharply reduced rate (0.5% per annum).
Coal, by this reckoning, should remain the most common fuel for electricity generation, but with its share of the sector reduced from 43% in 2014 to one-third in 2035. The difference is projected to come from a large growth in renewables, other than hydro. Given the current situation in Europe, this remains something of a heroic assumption. As the figures show, in the absence of affordable energy storage solutions on a massive scale, wind and solar will continue to need effectively 100% conventional backup, unless we see a real nuclear renaissance.
Whether that backup is powered by coal or gas in the longer term is to a large extent a question of economics. As liquefaction capacity increases, natural gas will become a more widely-traded commodity, with the exploitation of shale deposits pushing down prices for some time to come. But coal remains the most abundant fossil fuel, with at least two centuries’ worth of proven reserves. Being energy-dense, it is cheap to transport.
China uses massive amounts of coal and, although there are signs that its programme of building new coal-fired power stations is being cut back (until recently, construction started on two a week) it will surely continue to use the large number of plants already operating. Meanwhile, India’s coal consumption continues to increase steeply and, as economic growth continues, this is likely to continue for some time to come.
Some people acknowledge that coal has a future, but link this to use of carbon capture and storage technology. However, as the IEA acknowledges, progress on this is ‘disappointing’. Each project has to be a bespoke one, so there would be no economies of scale, and actual energy consumption would increase significantly to run the CCS part of the process while still providing the same amount of electricity.
Coal’s continued use may instead depend on more efficient technology. Surprisingly, given the maturity of coal-fired power stations, there are still significant improvements being made. These essentially enable plants to be run at higher temperatures (around 600° for the latest ones) with multiple stages (see, for example, Lean and clean: why modern coal-fired power plants are better by design).
Known as ultra-supercritical or high-efficiency low emissions (HELE), a few modern examples operate at more than 45% efficiency (the average for the whole fleet is 33%) and more improvements are likely. Construction costs are higher, but there are significant savings in both fuel and emissions. Flexibility can also be designed in, to allow ramping up to full capacity in half an hour and allow coal to balance the fluctuating output of wind farms as well as closed cycle gas turbines.
Why this technology isn’t being rolled out more quickly is unclear but, in the absence of a real commitment to new nuclear stations, it seems an obvious route to take to ensure medium term energy security. And, if the house of cards that is current renewable energy policy collapses at some stage, HELE coal could make a very significant contribution, alongside gas.