Climate change is forcing companies of all sizes to rethink the way they do business.. to find ways to sustain growth in a low, rather than high, carbon economy.
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Today, 1.6 billion people do not have access to electricity. They and their fellow citizens around the globe depend on energy to enhance their lives. Coal and all the world’s energy resources are being called upon to meet these expectations, and the demands are growing. Coal stands apart because it is the world’s most abundant, affordable and geographically dispersed fossil fuel. As a result, the National Mining Association (NMA) and coal producers around the world have looked for ways to make increased coal use compatible with a shared desire to address emissions of greenhouse gases.
Through the NMA’s participation in research and development efforts in the United States, domestic and international public-private partnerships, and information sharing forums, we believe the groundwork can be laid for the deployment of large scale projects around the world aimed at demonstrating the effectiveness of various technology approaches. This brief overview outlines the technology roadmap upon which we are embarking.
Coal is the world’s most abundant and geographically dispersed fossil fuel. Nations such as the United States, China, India and South Africa, each with huge domestic reserves, rely on coal to meet their electricity needs because coal provides secure, reliable and affordable power. Coal is the primary provider of baseload power for nations around the globe, see Figures below.
Location of the world's main fossil fuel reserves (Gigatonnes of oil equivalent).
Coal use in electricity generation, 2006 (e)
GROWTH IN ENERGY DEMAND
The International Energy Agency (IEA) estimates that worldwide demand for all energy resources, including coal, will continue to grow. The most rapid growth will occur in developing economies as they become increasingly industrialised and their citizens benefit from improving standards of living and demand products that are taken for granted in developed economies. As a result, IEA estimates that developing countries will account for 55 per cent of world primary energy demand in 2050, compared with 37 per cent in 2003 and 22 per cent in 1971, see Figure below which highlights the World's coal consumption by region between 1980-2030.
These are compelling forces that are unlikely to be reversed. Indeed, achievement of the objectives of the United Nations Universal Declaration of Human Rights depends on economic development that is fueled by energy. Increasingly, there will be greater competition for the world’s energy resources. All of these factors underline coal’s continued and growing importance as a worldwide energy provider. For many nations, having an abundant and secure source of energy is reason enough for continued use of coal. Those benefits are further augmented by an inescapable fact: projected energy demand simply cannot be met over the long term without significant coal based generation.
TECHNOLOGY INNOVATION AND TRANSFER
How can continued and growing coal use be reconciled with policies to reduce greenhouse gas (GHG) emissions? The NMA believes they cannot be, until there is widespread recognition that all frameworks for emissions reductions must rely on innovations in technology. Timetables, targets and market mechanism must be aligned with, rather than established apart from, the ability of technology to deliver solutions that are not financially punitive, that produce tangible results and that can be embraced globally.
The recently released study by the World Energy Council (WEC) in its June 2007 report, Energy and Climate Change 2007, makes the point that, using a broad definition of technology to include research, development, demonstration, technology choice and deployment and technology transfer, “technology is central to nearly all governments’ approaches in both developed and developing worlds, though of course there are considerable differences of emphasis.” With total investments in new energy technologies over the coming decades expected to be in the trillions of dollars, both in developed and developing countries, delivery mechanisms are receiving widespread attention.
WEC, along with others, has identified bureaucratic and political obstacles that often stand in the way of technology transfer. Among them are issues over maintenance and reliability and treatment of intellectual property rights. A number of international groups, including the Expert Group on Technology Transfer within the UN framework, are looking at these issues.
In concert with coal based stakeholders internationally, US coal producers are supporting a suite of approaches and technologies.
IMPROVEMENTS IN EFFICIENCIES AT EXISTING POWER PLANTS
Efficiency improvements result in lower greenhouse gas emissions. Governments should be encouraged to pursue policies that support, rather than inhibit, these improvements, which can be instrumental in flattening the growth in greenhouse gas emissions. This is a course of action we believe can produce substantial results in the US. The WEC also points out that “bringing a coal-fired plant in China and India up to the level of efficiency of a new German plant would deliver emissions savings commensurate with those expected from the whole Kyoto process, while improving the efficiency of resource use and enabling increased access to modern energy.”
CONSTRUCTION OF FUTUREGEN
FutureGen is a public-private partnership to design, build, and operate the world’s first coal-fueled, near zero emissions power plant, at an estimated net project cost of US$1.5 billion. The commercial scale plant will prove the technical and economic feasibility of producing low cost electricity and hydrogen from coal while nearly eliminating emissions. It also will support testing and commercialisation of technologies focused on generating clean power, capturing and permanently storing carbon dioxide, and producing hydrogen. Importantly, the FutureGen Industrial Alliance is made up of US and international coal producers and utilities, including China’s largest coal based utility. This provides a built-in mechanism for technology sharing and transfer.
CARBON CAPTURE AND STORAGE TECHNOLOGY (CCS) AND CLEAN COAL TECHNOLOGIES
The IEA Energy Technology Perspectives 2006 report concludes that, “Clean coal technologies with CCS offer a particularly important opportunity to constrain emissions in rapidly growing economies with large coal reserves, such as China and India. CCS is indispensable for the role that coal can play in providing low cost electricity in a CO2 constrained world.” IEA further estimates that coal equipped with CCS could contribute 12 per cent of the total reduction in CO2 emissions in 2050- more than that achieved by hydroelectric power, biomass and other renewables, including solar and wind, combined.
Commercialisation of CCS is complicated by the large capital investments required, the long life of the assets and the need to ensure CCS technologies can be successfully integrated at least cost to consumers at coal based power plants that rely on varying combustion platforms, eg gasification technologies (IGCC) and clean combustion technologies (Subcritical, Supercritical and UltraSupercritical). Public policies are needed to help overcome these barriers and provide aggressive and sustained government support for technology demonstration and deployment through mechanisms such as capital grants, operational subsidies, tax incentives, accelerated depreciation and public investment in needed infrastructure.
The US is currently conducting CCS demonstration projects through partnerships managed by the US Department of Energy, and the National Mining Association and the industry’s coal based customers are analysing funding mechanisms and policies aimed at providing the long term commitments needed to bring these technologies from the demonstration stage to widespread commercial deployment.
The US is also working with its partners in the Asia-Pacific Partnership (APP) on Clean Development and Climate Change to determine how these technologies can be deployed internationally. APP’s founding partners (Australia, China, India, Japan, Republic of Korea and the US) and Canada, now an official partner, represent about half of the world’s economy, population and energy use. The partnership is focusing on expanding investment and trade in cleaner energy technologies, goods and services in key market sections.
CONCLUSION
Other countries and governments may determine that alternative technologies and approaches are more suited to their individual needs and capabilities. The common need shared by all, are policies that give long term support for technology development and deployment, a clear understanding of the timelines and costs involved, and a commitment to so align emissions reduction strategies.
While coal producing interests around the world have focused on reducing emissions at power plants, greenhouse gas emissions arise either directly or indirectly from almost all human activity. Significantly reducing greenhouse gas emissions is a worldwide challenge requiring attention across all economic sectors.
Ultimately, solutions must balance energy affordability, energy security and availability and the preservation and enhancement of the quality of human life with our desire to achievement measurable results in reducing greenhouse gas emissions. Failure to do so will invite public resistance and loss of commitment.
Coal is America’s dominant energy resource
Coal is America’s most abundant energy resource, making up 94 per cent of US fossil energy reserves (on a British thermal unit basis). At current rates of use, the US has more than 240 years of remaining coal reserves. Because of its abundance, reliability and affordability, coal generates half of US electricity, a share that is expected to grow to 57 per cent of the expanding electricity market by 2030.
Recent analyses by the US Environmental Protection Agency, academic institutions and energy consultants have all concluded that, even in a carbon constrained economy, the United States will continue to need coal to generate at least half of its electricity over the long term. Coal’s prominent role in US energy supply suggests that arbitrarily restricting coal’s use for a significant portion of electricity generation will invariably lead to an increasing reliance on imported energy, greater price volatility and an inability to meet energy needs.
Coal’s role in meeting future US energy demand extends beyond electricity generation. Coal will be used to produce clean diesel transportation fuels ideally suited to power commercial and military aviation, long haul road transportation, railroads, ocean transport and other industrial sectors.
Amid increasing competition for scarce global petroleum resources, coal-to-liquid (CTL) transportation fuels are a viable option for reducing global petroleum use and limiting the economic risks associated with global oil price fluctuations, while achieving critical environmental improvement goals.
Coal’s role in climate solutions
The NMA supports accelerated funding for research and development into technologies capable in the near term of reducing emissions through greater fuel efficiency and through carbon capture and storage technology that will provide a long term solution. NMA believes a national commitment to a technology programme for arresting and reducing CO2 emissions is the strategy most compatible with economic growth and environmental improvement.
The widespread adoption of clean coal technologies since 1980 has already enabled US power plants to reduce major emissions by 40 per cent, at the same time the amount of coal used to generate electricity increased by 75 per cent and the economy grew by 93 per cent. Additional reductions of sulphur dioxide, nitrogen oxide, particulates and, for the first time, mercury, are expected as a result of new requirements.
The National Mining Association believes climate policies that incorporate a technology based approach will foster the development of alternative fuel technologies, promote economic growth and the efficient use of energy while addressing environmental concerns and promoting social advancement.
Organisation
The National Mining Association (NMA) represents the interests of the US coal mining industry before government on legislative, regulatory and legal matters. NMA provides a forum for industry leaders to analyse issues of the day and to develop positions on public policy matters, including energy policy and climate.
NMA and its members are committed to the development and implementation of policies that address climate change, including reductions in greenhouse gas emissions from all sources. We also recognise the US’s strong reliance on its coal reserves (the world’s largest) to continue to provide American consumers and industries with abundant and affordable fuel to generate electricity, to serve as a feedstock for the future development of transportation fuels, and as a vital input to steelmaking.
