Coal's renaissance?

Paul Suff argues that with countries increasingly returning to coal-fired electricity generation, carbon capture and storage can't come quick enough

Coal consumption across the world last year was at its highest level since 1969. Given the association between burning coal and climate change, why is consumption now rising? Scientists at the Tyndall centre for climate change research say rising consumption is due to a fall in the price of coal, which is mainly because the US has switched to burning large amounts of domestically extracted shale gas to generate electricity.

The upside from burning shale gas in power stations rather than coal is a reduction in emissions. But, as the Tyndall report points out, US emissions have simply been displaced elsewhere as other countries take advantage of cheap US exports to burn more coal.

Last year’s global coal consumption – generating more than 30% of the world’s energy – was not a blip, however. The World Coal Association reports consumption has been rising by more than 4% a year since 1999. The US may be reining back on its domestic coal use and exporting more of the fossil fuel, but other major economies are not.

Germany opened a new 2,200MW coal-fired power station in August, and coal consumption in the EU’s biggest economy was 1.2% higher in 2011 than in 2010. Energy consumption data between April and June 2012 for the UK, meanwhile, reveals that coal’s share was at its highest level for 14 years.

Unlike in the US, European gas prices are high. And, with the cost of carbon allowances in the EU emissions trading scheme (ETS) low, there is little incentive not to substitute expensive gas with cheaper coal.

Strengthening the price of ETS allowances may help reduce coal consumption, but with up to 1,004 billion tonnes of coal reserves left in the world – equivalent to 130 years of global coal output at 2011 levels – the sooner carbon capture and storage (CCS) is successfully deployed the better. Unfortunately, the development of CCS technology continues at a snail’s pace.

Although four projects have made the UK’s shortlist for funding, a decision on which ones will finally receive some money from the £1 billion pot will not be made until next year. That’s six years since the first CCS competition was launched!