Coal

1
Coal security of coal supply considerations of
EURACOAL
Paris 24th May 2005
2
Coal in Europe

• Secure energy for Europe
• Economic energy for Europe
• Clean Coal three stages in a long-term vision
• Working together for the right policies

There is a need for balanced energyand
environmental policies
3
Europe is the worlds third largest consumer of
coal behind China and the US
Data in mill. t for 2002 Lignite production Hard
coal production Hard coal imports
About 490 mill. t/a hard coal and 550 mill. t/a
lignite in Europe
4
Coal is key to power generation in states across
Europe
TWh
Coals share in
3,018
30
2,678
26
144
92
76
66
63
55
50
572
246
33
387
32
36
25
12
284
12
82
4
559
46
44
37
54
Share in
Gross power generation - 2002
5
Rising gas prices are higher risk for generators
and consumers than coal
Average Generation Costs of New Baseload Power
Plants
6
Power requirements of the enlarged Europe will
increase with coal remaining a major player
Policies to limit demand andCO2 emission
54
4.5
Policies to promoterenewables
18
GWh
3.0
36
Renewables(Hydro)
15
Policies needed to increase efficiency
in generation
Gas
17
2
6
Oil
17
32
Nuclear
27
30
Coal
2002
2030
Source EU Commission, Trend to 2030
Policies are needed to enable all fossil fuels to
contribute to the solutions for climate change
7
Clean coal can balance energy security and
economic needs with environmental needs

• Coal is inexpensive, secure and has no transport
  risks
• The environmental impact of coal use can be
  minimised byclean coal technologies
• Clean coal is the basis for long-term acceptance
  of coal and is a flexible concept which can be
  used by all countries
• Euracoal defines clean coal in three stages
• I Reduction in SO2, NOx, dust
• II Improved energy efficiency
• III The long-term vision of CO2 capture and
  storage

8
Niederaußems lignite-fuelled power plant
illustrates step-by-step efficiency enhancement
?gt431000 MW2002
?35600 MW1974
?34300 MW1965-71
?31150 MW1963
9
In the longer term there is a route to near-zero
CO2 emission power stations

• CO2-capture
• pre-combustion at gasification plants
• post-combustion at conventional plants
• oxy-fuel combustion

• CO2-storage
• depleted oil and gas fields
• deep saline aquifers
• unmineable coal seams
• mineralisation

Some technologies are well-proven, others need
significant RD. All require demonstration with
monitoring verification of storage sites.
EU Framework Programme VII offers the opportunity
to move ahead with demonstration projects and
targeted RD
10
Implementation of emissions trading policies is
of key importance for coal and for Europe

• Emissions trading will inevitably lead to fuel
  switching from coal to gas
• Increased gas burn within the EU will have an
  adverse impact on competitiveness and energy
  security
• Coal can provide low carbon solutions
• needs right political and investment climate

Implementation of Phase I has been rushed We
need to start planning Phase II now
11
Emissions Trading in GermanySecurity for
investors beyond Kyoto
Trading period 2005/07
Trading period 2008/12
Kyoto
Post-Kyoto
Section 10,NAP-G (National Allocation Plan
Act) New installationsreplacing old plantsFull
allocationInstallation-relatedbenchmarks
14 years Compliance factor 1 New plant
4 CF Old plant
12
Coal in EuropeDifferent countries, situations
and needs for action

• Competitive electricity supply is important for
  Europes economy coal backs this
  competitiveness
• Past burdens should not hinder future potential
  to provide Europe with a valuable indigenous
  resource
• Reliable regulatory framework is needed for
  long-term investment in modernisation new mines /
  power plants
• Regulation of the electricity market should
  provide a framework to stimulate production and
  investment