. .



1_popup_home.gif (1391 bytes) i&e.gif (7340 bytes)

Coal: Does it have a future?

  1. Local wheat production and imports
  2. Trade Policy: Impact on exports
  3. Balance of payments and exchange rate policy
  4. Coal: Does it have a future?

The use of coal has declined during the 1990s, experiencing a 2.1% drop in 1998

Coal, the greatest energy source of the l9th century, will become obsolete in the early years of the 21st century, runs one argument.

It is the view espoused by researcher Seth Dunn in an article which appeared in the latest issue of ‘World Watch’, a magazine published by Washington-based non-profit organisation— Worldwatch Institute.

A robust reply quickly came from another institute, the London based World Coal Institute which represents most of the world's leading coal producers. It stresses that coal is, and will keep on playing a major role as the major source of world energy in the foreseeable future.

Seth contends that the use of coal has declined during the 1990s, experiencing a 2.1% drop in 1998.

"Coal’s share of energy, which peaked at 62% in 1910, is down to 23% — roughly where it was in 1860. While coal’s market price is at an historic low, its environmental and health costs have never been higher." He attributes the declining coal use on environmental reasons.

Coal, he says, is the most carbon-intensive fossil fuel which releases 29% more carbon per unit of energy than oil and 80% more carbon than natural gas. It accounts for 43% of the annual global carbon emissions which translates into 2.7 billion tonnes, he adds.

While coal is the most abundant of all the fossil fuels— an estimated reserve to last 1,000 years— the problem is that its use would release 3 trillion tonnes of carbon into the atmosphere.

Several cities, including Beijing and Delhi, have already about to touch the pollution levels that London experienced during the notorious fog of 1952 which claimed 4,000 lives.

Today’s fogs are transcontinental travellers, says Seth. Dust clouds from Asian coal now reach the US west coast. Higher nitrogen emissions have ruined hundreds of lakes in Europe and acid hazes covering the Indian Ocean have reduced wheat yields in India, and are causing $ 14 billion of damage annually in China.

Seth advocates a further reduction in large subsidies that increased the use of coal in some countries. Coal consumption in China dropped by 5.2 per cent in 1998 since it cut the subsidy rates by more than half in 1984.

To prove his point further, Seth cites the example of Belgium, France, Japan, Spain and the UK, the countries who collectively cut the coal use in half, since slashing or altogether ending coal supports in the last 15 years.

Colonies of coal

Remaining coal totals $ 63 billion annually, and there still exists many "colonies of coal." The US and Denmark still depend on coal for 53% and 74% of electricity generation respectively. South Africa and China, on the other hand, remain the most coal-reliant developing countries, with coal having 78% and 73% shares in energy use respectively.

The World Coal Institute refutes the arguments forwarded by Seth Dunn and stresses that coal has been proven an abundant, safe, secure, clean and cost-effective source of energy generation.

It was, and is, the safest fossil fuel to transport, store and use, and is not at all likely to pose anywhere close to such potentially disastrous accident as that at a nuclear power or gas plant in case of an explosion or an oil spillage from a tanker.

Abundant reserves also mean that coal users are guaranteed security of supply at competitive prices— compare the stability of the global coal market to that of oil where the spot price doubled in six months.

Putting the coal use at 26 per cent of the total global primary energy demand the Institute says that its primary beneficiary is the steel industry which absorbs over 500 million tonnes of coal annually.

Estimates show that 37% of global electricity was generated from coal, but this figure camouflaged major variations. For example, in Japan, coal’s share was 15% compared with the US at about 56%, while that for China, India, Poland and South Africa each at over 75%. The 15 countries of the European Union collectively generate 27 per cent of their electricity from coal.

The Institute says that the future coal demand will be dominated by the Asian region and this is where the greatest efficiency gains can be made: The net plant efficiency of coal-fired power generation in non-OECD countries is up to 10% lower than the 36% average in the OECD, and even further below the 45% efficiency that is being achieved with advanced technologies.

In addition, the increasing coal combustion efficiency has resulted in reduced carbon dioxide emissions. This could be graphically seen in the case of China which accounts for some 30% of world hard coal consumption which is expected to increase to 37.5 per cent in the year 2020 according to the forecast of the International Energy Agency.

Improving the combustion efficiency by 10 per cent of China’s current coal consumption of 120 milion tonnes from 35 to 25 per cent would reduce emissions by 47.5m tonnes — equivalent to the emissions in, say, Portugal from all sources.

"It is significant to reflect on the reasons why the world has grown dependent on coal," says the coal institute. "Is it feasible for people to now suggest reversal of this dependency, reflected in the annual coal demand growth of over 1 billion tonnes over the last two decades," asks the World Coal Institute?