Can Coal Withstand the Challenge of Global Warming

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Can Coal Withstand the Challenge of Global
Warming ?

• Colin Gubbins
• McCloskey Group

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Introduction McCloskey Group

• Worlds leading coal information company
• Publish - McCloskeys Coal Report
• McCloskeys Coal Fax
• Coal UK
• Steam Coal Forecaster
• Metallurgical Coal Quarterly
• UK Power Focus
• Management Reports
• Conferences
• Consultancy

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Coals Uses

• Primary Fuel for Power Generation
• Energy Source and Chemical Reducing Agent for
  Steel Industry
• Cement Manufacture
• Industrial energy raising
• Domestic and District space heating

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World Coal Productionmillion tonne per annum
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Primary Energy Consumptionmillion tonne coal
equivalent
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Coals Advantages

• Huge Reserves
• Spread Widely Across the World
• Little Danger of COALPEC
• Easy to Store
• Easy to Transport
• Low Production Cost

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Coals Poor Image

• Perceived as Old Fashioned
• Perceived as the Arch Polluter
• Poor Historical Legacy
• Divorced by oil industry

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Coals Historical Baggage

• Associated with atmospheric pollution London
  smogs.
• Associated with industrial dereliction- Alabama
  Coalfields American Rustbelt
• Long History of Industrial Conflict 1984 Miners
  Strike in UK

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Coals Challenges

• Kyoto and Carbon Trading
• LCPD
• Trace Elements
• Resistance to mining of coal

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Kyoto

• Russian ratification means that Kyoto is all
  systems go
• European Governments appear to have fudged first
  stage 2005 to 2008. NAPs relatively benign.
• Carbon credits cheap?

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Kyoto Continued

• Coal Disadvantaged by carbon emissions trading
• Highest C/ H2 Ratio
• Low Efficiency 37
• High carbon credits would damage coal.
• Uncertainty post 2008

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Impact on UK Coal Burn

• Original UK NAP allocated equivalent of 36
  million tonne coal burn.
• Coal burn in 2003 50 million tonne. Same or
  greater in 2004
• Awaiting latest NAP
• Position post 2007 not known

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LCPD

• Coals second body blow
• 2008 onwards
• Attacks emissions of
• SOx
• NOx
• Particulates

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Coal has technology

• Low NOx burners. Selective Catalytic Reduction
  post 2012
• Electrostatic Precipitators and SO3 Injection
• Flue Gas Desulphurisation FGD

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Will Generators Invest

• Mainly an Issue in Spain and UK most EU 15
  members compliant.
• New EU Entrants ?

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UK Position

• Compliant for NOx and particulates
• 13,400 MW Opted In
• 18,900 MW Opted Out
• Opted in plant only constrained by carbon
  emissions
• Opted out plant constrained to 20,000 hours
  closure 2015
• Not the only story post 2007 sulphur limits on
  opted out plant still to be defined

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Can Coal Meet the Challenge ?

• Coal has the technology
• Super Critical Boilers - Efficiency 45
• Pressurised Fluidised Bed - Efficiency 40
• ICGT - Efficiency 50
• Carbon sequestration find a friendly home for
  CO2

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The Downside

• All of this technology is more capital intensive
  than a CCGT
• Only the USA committed to developing the
  technology to commercial fruition
• Can we expect a privatised electricity industry
  to invest for the future

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Coals Trump Card

• Large Reserves of low cost coal
• Gas at one point predicted to reach 65
  pence/therm in UK in January 2005
• This equated to a landed UK coal price of
  200 per tonne.
• Current landed price 80 per tonne
• Loaded cost of coal in Australia US 34
  per tonne

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Our Message

• Coal the worlds largest fossil fuel resource
• The lowest cost fossil fuel ?
• Positives outweigh the negatives
• Technology exists to make coal burn
  environmentally friendly
• Whilst we wait for the hydrogen economy to become
  a reality we must find a way to utilise this
  valuable resource