Op-ed articles

Coal's Future

Frédéric Gonand
Frédéric GonandAdjunct professor of economics at University Paris-Dauphine

"Coal's future is in the hands of the emerging economies"

 

Today, coalCoal is ranked by its degree of transformation or maturity, increasing in carbon content from... is still the world's leading source of electricityForm of energy resulting from the movement of charged particles (electrons) through a conductor... and many emerging economies rely on it to drive their economic development. Its future in the global energy mixThe range of energy sources of a region. will partially depend on the goals of the low-carbon transition policies that will be introduced to contain global warmingGlobal warming, also called planetary warming or climate change... . Frédéric Gonand, Professor of Economics at University Paris-Dauphine, tells us more.

The economics of coal are well known. To simplify, coal comes in several grades, including ligniteRock whose properties are somewhere between peat and coal. It has a carbon content of about 70 to 75%... (used to generate electricity), bituminous coal (used to make steel) and anthraciteA type of coal that is 95% pure carbon. It is an excellent fuel. (used for heating). 69% of the world's coal is used to produce electricity. Most coal is mined and used domestically, with only 12% of production exported.  Reserves are fairly well distributed around the planet, hence the geographically largest countries (like the United States, Russia, China, India and Australia) account for the most significant reserves.

Experience has shown that energy markets sometimes behave in very unexpected ways. Fifteen years ago, it seemed obvious to everyone that coal was fading away into the sunset. But since the beginning of the century, demand for coal has grown faster than for any other fuelFuel is any solid, liquid or gaseous substance or material that can be combined with an oxidant... .

Today, there are two types of long-term energy mix forecasts, the ones that see supply and demand for fossil fuels in general and coal in particular continuing to rise in the decades ahead; and the ones that, on the contrary, see supply and demand weakening under the impact of low-carbon transition policies. Knowing which of these scenarios will prevail also means, to a large extent, knowing whether the emerging economies, whose growth is now fairly closely tied to the use of coal as their primary energyAll energy sources that have not undergone any conversion process and remain in their natural state.. source, will agree to pay the cost of transitioning sooner or later to other sources of energy.

Today, it seems likely that coal demand will continue over the mid-term to decline in the western countries and increase in the emerging economies – particularly China and India, which together use 60% of the world's coal production.

Future demand for coal will also likely be influenced to a certain extent by the cost of carbon (which has a massive impact on the profitability of coal-fired powerIn physics, power is the amount of energy supplied by a system per unit time. In simpler terms, power can be viewed as energy output... plants, but whose future is still highly uncertain); the price of carbon storage technologies; and the energy efficiencyIn economic terms, energy efficiency refers to the efforts made to reduce the energy consumption of a system... of coal-fired power stations, particularly in China and India. The first and the third factor would tend to weigh on demand, while the second one could lift it.

Available data therefore seem to suggest that global coal demand will generally drift down over the long term, but at a pace that is difficult to assess. In any case, coal's abundance and the probable stability of its production costs should provide significant support for demand over the long term. As a result, coal will undoubtedly remain a relatively important source of energy in the world of tomorrow.

 

Frédéric Gonand, 40, is an adjunct professor of economics at University Paris-Dauphine, former Commissioner of the French Energy Regulation Authority (2011-2013), visiting researcher at the King Abdullah Petroleum Studies and Research Center (Saudi Arabia) and consultant in energy issues for various consulting firms and companies.

Thierry Doucerain
Thierry DoucerainChief Executive Officer of EDF Polska

"Coal is used to produce some 90% of electricity and heat in Poland."

The Energy Transition Tailored to Major Coal-Consuming Countries

Countries that consume large quantities of coalCoal is ranked by its degree of transformation or maturity, increasing in carbon content from... are often singled out for their sulfur, nitrogen and CO2See Carbon Dioxid emissions. But to write them off as environmental laggards is a shortsighted cliché. Given the many ways to reduce coal consumption, these countries will boast the best performance in terms of greenhouse gas (ghg) Gas with physical properties that cause the Earth's atmosphere to warm up. There are a number of naturally occurring greenhouse gases... (GHG) reductions over the coming years. In this article, Thierry Doucerain, Chief Executive Officer of EDF Polska, analyses the situation in Poland.

Coal is used to produce some 90% of electricityForm of energy resulting from the movement of charged particles (electrons) through a conductor... and heatIn the field of statistical thermodynamics today, heat refers to the transfer of the thermal agitation of the particles making up matter... in Poland. The country is facing three challenges. First, develop the energy industry at an acceptable cost. Second, transition toward a less coal-intensive energy mixThe range of energy sources of a region. to meet the requirements of the European Union (E.U.) climate policy. And third, manage this transition while continuing to use a significant proportion of coal, which is a local resource that is essential to social harmony.

While the transition will be long and require heavy investment, Poland has what it takes to overcome this challenge.

Developing cogeneration capacity

Most cities in Poland have had district heating networks for decades, even dating back to before the Communist period. In big cities, these networks are powered by cogenerationThe simultaneous production of both heat (thermal energy) and power... (also known as combined heat and powerIn physics, power is the amount of energy supplied by a system per unit time. In simpler terms, power can be viewed as energy output...  – CHP), a system where coal-fired power plants produce both heat for district heating, and electricity at the same time, using a turbine. Electricity becomes a by-product of sorts. Cogeneration uses 30% less coal than would be needed to produce the same amounts of heat and electricity separately. It increases the energy efficiencyIn economic terms, energy efficiency refers to the efforts made to reduce the energy consumption of a system... of a coal-fired furnace to around 70%. That is a considerable improvement given that an aging coal-fired power plant has an efficiency of around 34%, and a "clean coal" plant achieves levels of up to 45%.

CHP boilers are sometimes lacking in small and medium-sized cities, which instead rely on fairly obsolete facilities that only produce heat. Replacing these with cogeneration units would significantly increase efficiency, thereby curbing CO2 emissions. However, in some cases, it may make more economic sense to switch to gas or biomassIn the energy sector, biomass is defined as all organic matter of plant or animal origin... .

Upgrading power plants

Cogeneration aside, Poland sources its electricity from relatively old coal - or lignite-fired power plants built 40 or more years ago, which emit excessive amounts of particulate matter and noxious gases. This, in addition to household usage of poor-quality coal, has caused country-wide pollution and even smog in certain cities such as Kraków, giving rise to a public health problem.

European directives setting strict limits on particulate matter and sulfur and nitrogen emissions from large-scale facilities are implemented using either of the following approaches:

The combination of greater use of cogeneration, new power plants, efforts to develop renewables – particularly biomass and geothermalDescribes the technology used to tap subsurface heat to produce energy... energy – and the possible addition of nuclear energyEnergy produced in nuclear power plants. The enormous amount of heat released during fission of uranium atom nuclei is transferred to water... should have a significant impact on greenhouse gas emissions. Indeed, the targeted 30% to 50% reduction by 2030 seems feasible, even with coal continuing to make up more than 50% of the energy mix.

 

Thierry Doucerain has served as Chief Executive Officer of EDF Polska since 2014. A graduate of École des Mines in Nancy, he joined the EDF Group in 1978. Thierry has devoted much of his career to production engineering in the hydro, nuclear and thermal power industries. He became part of the Thermal Engineering Department in 2002 before being appointed Executive Director in 2006. Here he oversaw numerous coal- and gas-fired power plant construction projects in China, Egypt, Vietnam, France and the United Kingdom between 2002 and 2011.

 

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