November 16, 2022
On Tuesday, the International Energy Agency released a report on coal which it touts as being “the most comprehensive analysis to date” as to what would be required to “bring down global coal emissions rapidly enough to meet international climate goals.” In a press release, IEA Executive Director Fatih Birol said “a major unresolved problem is how to deal with the massive amount of existing coal assets worldwide.”
The “Coal in Net Zero Transitions” report is being released during the second week of the COP27 climate meetings in Sharm El-Sheikh, Egypt. And while the report contains a myriad of graphics and charts about how coal use might be reduced, the hard reality is that coal continues to be an indispensable fuel for power generation and industrial production. For proof of that, we need only look at India and China.
Before doing so, let me quote again from the IEA’s press release, which says that “far from declining, global coal demand has been stable at near record highs for the past decade. If nothing is done, emissions from existing coal assets would, by themselves, tip the world across the 1.5°C limit.” It also quotes Birol as saying “Coal is both the single biggest source of CO2 emissions from energy and the single biggest source of electricity generation worldwide, which highlights the harm it is doing to our climate and the huge challenge of replacing it rapidly while ensuring energy security.”
Therein lies the rub. And few countries demonstrate how energy security is trumping climate concerns than India, where electricity use averages about 1,000 kilowatt-hours per capita per year. Put another way, the average American uses about as much electricity in a month as the average Indian uses in an entire year.
Given such paltry electricity consumption numbers, it’s no surprise that earlier this month, the Indian government launched its biggest-ever auction for coal mining. According to a November 3 article in The Hindu Business Line, the government has offered “133 blocks for auction, of which 71 are new mines and 62 are rolling over from earlier tranches of commercial auctions.” The auctions came just a few weeks after Power Minister Raj Kumar Singh said that India would add as much as 56 gigawatts of new coal-fired generation capacity by 2030. That would be an increase of about 25% over the country’s current installed base of about 204 GW of coal-fueled generation. In explaining the move, Singh said “My bottom line is I will not compromise with my growth…Power needs to remain available.”
In addition, China is accelerating its construction of coal-fired power plants. In August, Global Energy Monitor reported that China is planning to build 43 new coal-fired power plants and that construction now underway “amounts to almost one coal plant unit per week.” Of course, China’s enormous coal consumption has been documented many times. According to the latest data from BP, China consumes more coal (about 86 exajoules in 2021) than the rest of the world combined. China uses that coal to make steel and for industrial production, but its main use for coal is for power generation. And as can be seen in the nearby graphic, China is generating about four times as much electricity from coal as India, and more than five times as much as the U.S.
To be sure, none of these coal expansions appear to be in agreement with China’s pledge to be carbon neutral by 2060. And Chinese President Xi Jinping has claimed his country will begin cutting its coal use in 2026.
As I reported in these pages back in June, the surging use of coal in China and India is obliterating all of the emissions reductions that have been achieved in the U.S. since 2005.
That said, the challenge of phasing out coal is not limited to those two countries. The U.S. is still the world’s third-biggest coal consumer and utilities across Europe are racing to get as much coal as they can get find. The IEA report also discusses other countries where coal dependency is high, including Indonesia, Mongolia, Vietnam, and South Africa. It further estimates that some $6 trillion in new investment will be required by 2050 to slash the emissions from coal-fired power plants and that as much as $9.5 trillion will be required to achieve what the agency calls a “net zero” scenario.
It’s interesting to note that Tuesday’s IEA report concludes with a chapter on critical minerals, which has emerged as the key stumbling block to the much-hyped energy transition. It says that alt-energy technologies “require more critical mineral inputs to build than their fossil fuel counterparts. For example, an offshore wind facility requires about six times more critical minerals by weight to build than a coal-fired power plant.” It goes on to say that the demand for critical minerals for “clean energy technologies” will quadruple between now and 2050 and that the mineral demand for EVs and battery storage “increased by 15 times” by 2050.
Those are staggering numbers and the report underscores the importance of metals like lithium, cobalt, nickel, and copper. And in what may be the biggest understatement in the report, the IEA says “Current mineral supply and investment plans fall well short of what is needed to transform the energy sector. This raises the risk of delayed or more expensive energy transitions, especially since the long lead times for scaling up critical minerals mining operations mean that new supply cannot be arranged at short notice.”
In short, the latest IEA report on coal shows yet again, that energy transitions do not happen quickly and depend on many factors. As author and polymath Vaclav Smil wrote in 2014, “are inherently protracted affairs. The unfolding shift from fossil fuels” he declared, “will be no exception.”
Put another way, King Coal isn’t dead yet. Not by a long shot. As I have been saying for more than a decade, if the countries of the world are serious about reducing emissions, the path forward is clear: N2N, which stands for natural gas to nuclear.
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