Daily Archives: January 30, 2013

The Golden Age of Coal

Yangzhou industrial area, China

Coal-fired power stations provide two-fifths of the world’s electricity, and there are ever more of them. In the doubling of the world’s electricity production over the past decade, two-thirds of the increase came from coal. At these rates, coal will vie with oil as the world’s largest source of primary energy within five years. As recently as 2001, it was not much more than half as important as oil

The main factor has been the unslakable thirst for energy in China, which in 2011 overtook America as the world’s biggest electricity producer. In 2001, according to the International Energy Agency, a club of rich nations, Chinese coal demand was about 600m tonnes of oil equivalent (25 exajoules). By 2011 China’s coal demand had tripled—a rise from two-thirds of the energy America gets from oil to twice that amount. China’s domestic coal industry produces more primary energy than Middle Eastern oil does.

Other developing economies are just as keen on coal, if not yet on such a grand scale. In India, producing 650 terawatt hours of electricity in 2010 took 311m tonnes of oil equivalent, and the power sector’s coal demand is growing at around 6% a year. The IEA reckons India could surpass America as the world’s second-largest coal consumer by 2017.

Meanwhile in Europe, which likes to see itself as a world leader on climate, they are using more and more of the stuff.

America’s coal business, like the rest of the country’s energy industry, has been upended by the advent of shale gas, now available in unforeseen quantities at unforeseen prices. In April 2012 the price fell below $2 per million British thermal units, or Btus ($7 per megawatt hour). This has made gas increasingly attractive to power companies, which have been switching away from coal in increasing numbers.

The decline of coal.. will be protracted. Coal-fired power stations are built to last—the oldest plant currently operating was built in the 1930s—so unless new rules force them to close, they will be retired gradually. By 2017 or so, reckons Brattle Group, a consultancy, coal use will stabilise again, as gas demand finally makes gas prices dearer than coal. Coal may be down in America. But it is not yet out

Coal in the rich world: The mixed fortunes of a fuel, Economist, Jan. 5, 2013, at 54