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Coal comeback?

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Note: 2 February 2017Coal comeback?

Coal comeback?

“Trump digs coal” according to signs at a rally in West Virginia during last year’s US presidential campaign.

Mr Trump’s inauguration as US president last month is one of several developments challenging the belief that “global demand for coal is in terminal decline” (Australian Greens).

First, there is no “terminal decline” in Asia, the world’s largest consumer of coal.

In both India and China, coal-fired plants make up over 60% of installed capacity. This proportion will decline over the next decade as greater emphasis is put on renewables and nuclear power.

However, in absolute terms, coal-fired capacity is expected to grow in both countries in this period – by about 25% in India (as projected by the central government) and about 10% in China (as projected by the research organisation, IHS Energy).

Nearly all Southeast Asian countries (e.g. Indonesia, Thailand, Vietnam, Malaysia) see coal increasing in importance for power generation over the next decade.

Second, those attempting to use renewables as their major source of electricity production are running into trouble.

Take Germany. After a decade of strong growth, renewables (notably wind) account for one-third of electricity production. The government sees this increasing to at least 80% by 2050.

However, because renewable power is intermittent, electricity supply has become increasingly volatile.

In periods of over-supply, wind-power operators may be paid for not producing electricity at all. (On first hearing this from a German minister, the Chinese energy minister thought it was an interpreter’s error.)

In periods of under-supply, consistent back-up supply is needed, This means coal, whose share of electricity production in Germany (a little over 40%) has barely changed in recent years.

Furthermore, renewables are expensive – Germany has the second-highest electricity prices in Europe (behind only Denmark).

And some ecologists despair about wind power, because it takes a lot of land and is responsible for ongoing deaths of birds and bats.

What is the result for Germany’s greenhouse-gas emissions? Almost negligible – emissions have declined only marginally in the past eight years (and have increased in the last two).

In Australia, South Australia is going down the same path as Germany and Victoria appears determined to follow suit.

Third, in terms of greenhouse-gas emissions, coal-fired power plants are not what they were, with new-generation plants “lowering carbon-dioxide emissions by as much as 50 per cent compared with existing plants” (Minerals Council of Australia).

Such plants offer a way of providing reliable, low-cost electricity while curtailing emissions. They are increasingly being installed in Asia.

Fourth, President Trump’s support for the coal industry will change the conversation about coal around the world.

This does not mean that coal use will necessarily increase in the US. This will depend primarily on the price of natural gas, coal’s main competitor for electricity production.

However, can coal continue to be regarded as the “great Satan” when the government of the largest economy in the world favours it?

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