Coal to be essential part of energy sector for decades to come, says opinion piece

An opinion piece by John Kemp of Reuters has argued that coal will be a large and necessary part of the energy sector for decades to come. The context is the idea that coal reserves will become ‘stranded assets’ (possibly in conjunction with some oil and gas reserves), as national legislation and international agreements regarding climate change limit coal burning and/or make it more expensive, leaving untapped deposits uneconomic or simply illegal to exploit. According to the International Energy Agency, two-thirds of the world’s already-discovered reserves of oil, gas and coal must remain unexploited if the world is to meet the goal of limiting average global temperature rises to 2 ^oC by 2050. However, last year, $US 674 billion (€496 billion) was allocated to fossil fuel exploration worldwide – a striking contrast suggesting an inevitable conflict between the fossil fuel extraction businesses and global climate goals.  Coal is particularly vulnerable to ‘stranded asset’ pressure because it is generally more polluting than gas (and gas is the fuel ‘switched to’ in order to avoid burning coal), which also explains why coal is the focus of campaigns across developed countries to divest from it, with boycotts from several prominent investment institutions such as pension funds and universities over recent years. Kemp argues that coal’s future over the coming decades is assured due to three reasons. Foremost is that a switch entirely to gas from coal would drive gas prices up too high for developing countries, which would be forced to switch to burning coal. Second is that there is a certain amount of inertia. Developing countries already prefer coal because it is cheaper, and coal has been the fastest growing source of energy in the 21^st century because developing countries are adding the most new power generation. In developed countries, on the other hand, coal plants have long been established and many have a significant number of years of operating life remaining. Thirdly, coal is more widely distributed than gas and oil, meaning it provides more energy security to more countries (though this may change somewhat with shale oil and gas development). Kemp argues that it would therefore be better to focus not on coal divestment but on cleaner coal power generation, a conclusion previously reached by the International Energy Agency and the Global Carbon Capture and Storage Institute (and supported by the recent 2014 global coal policy overview by PennEnergy). One possible scenario that would throw Kemp’s reasoning off would be if some renewable energy generation technology (or a combination of some) became cheaper than (and as reliable as) coal.

French government releases new energy law for parliamentary debate

Mid-June saw the release to parliamentary debate by the French government of a new national energy law. If passed, it will cap future nuclear energy output at the current 63 GW, with the aim of reducing the current share of nuclear in the French energy sector from 75% to 50% by 2025, with the share of renewables to increase to 40% by 2030 (from the current 12%). It also contains the objective of reducing total energy demand by 50% by 2050. According to the Financial Times, hard policy to back the law up has not been released – rather, the question of how to meet the requirements will be left to France’s utilities. The law has been seen by some as a political move designed to capture green support, because earlier in the month the French government moved to extend a freeze on retail energy prices, denying utilities money to fund maintenance or energy efficiency measures. It is also seen as another step in the deindustrialisation of Europe by losing nuclear energy expertise.

UK CCS Research Centre installs FTIR gas analyser

The UK’s Carbon Capture and Storage Research Centre, based near Sheffield, England, has installed a Fourier transform infrared spectroscopy (FTIR) gas analyser, to be used in its Pilot-scale Advanced Capture Technology Centre. It has heated sample lines to enable hot, wet and corrosive gases to be sampled and analysed. The unit was supplied by UK-based Quantitiech.

SaskPower’s Boundary Dam Power Station Unit 3 testing proceeding according to plan

The carbon capture and storage-equipped Unit 3 at SaskPower’s Boundary Dam Power Station has been successfully proceeding with its testing program, as it commissions the unit prior to its full opening in September or October. Mid-June saw the unit go online and produce power for the first time, part of the months-long commissioning process. SaskPower president Robert Watson is satisfied with work to date, saying “We’re really happy with the progress, but we’re not calling it a completion just yet.” Hitachi is managing the commissioning of the turbine, the first of its type in the world; when it is running, the capture island can also be commissioned.  A CCS conference is due to be held at the plant to coincide with its opening, as it will be the first fully-operational commercial scale coal-fired CCS-equipped unit in the world – a landmark event.

Netherland’s ROAD project ‘mothballed’ until finance found; Norwegian government to contribute

Another major CCS project, the Rotterdam Capture and Storage Demonstration Project (ROAD, from the Dutch acronym), which aims to capture carbon from the new Maasvlakte Power Plant 3 (MPP3) at the Port of Rotterdam, has hit a temporary setback, being ‘essentially mothballed’ as it waits for project financing. MPP3 is a hard coal-fired plant with a gross capacity of 1,100 MW, capable also of firing biomass, built and operated by E.ON, who agreed to participate in the ROAD project. Work on the ROAD project began in 2008, MPP3 being chosen as the site because of its proximity to the sea  (for cooling purposes) and a depleted gas field (the storage site), which is 25 km away. Funding has been granted by the EU (€180 million/$US 245 million), the Dutch government (up to €150 million/$US 204 million) and the Global CCS Institute (€5 million/$US 6.8 million), but more money is needed to continue the project. Some will come from the Norwegian government, which has in the last week pledged 100 million krone (€12 million/$US 16 million), which may trigger further EU funding, and get the project running again.

GDF Suez wins concession for combined heat and power plant in Mongolia

GDF Suez has announced that, along with consortium partners Sojitz (Japan), POSCO Energy (South Korea) and Newcom (Mongolia), it has signed a 25-year concession to provide heat and power to the Mongolian government. The consortium will build a coal-fired combined heat and power plant with an electrical capacity of 415 MW and a steam capacity of 587 MW, generated using three fluidized bed boilers, and supply the products to Ulaanbaatar, the Mongolian capital. Control measures will mitigate the emissions of particulates. Power demand is increasing in Mongolia as the mining industry and population grows.

Indian gas pipeline blast and fire kills 14, injures 20

An explosion of a 450 mm gas pipeline operated by a state-owned energy company, GAIL, in the southern Indian state of Andhra Pradesh has resulted in the deaths of 14 people and serious injuries to 20 more. The explosion triggered a fire that spread through the village of Nagaram, ripping through buildings and burning the victims alive. The pipeline supplied a power plant which is now receiving gas through alternative means while the fire-hit pipeline is shut down. Indian Prime Minister Narendra Modi, elected in May on the promise of speeding up major industrial and infrastructure projects, said the victims’ families would be compensated 200,000 rupees ($US 3,300/€2,461) for those deceased, and 50,000 for those injured; there would also be payments from GAIL and the petroleum ministry. According to Reuters, many villagers have previously expressed reservations about energy projects on safety grounds.

More than 1200 Chinese workers evacuated from Iraqi power plant construction project

In further safety news, the Wall Street Journal has reported that over 1200 Chinese workers constructing and oil-fired power plant in Samarra, in central/northern Iraq, have been evacuated as the ISIS militant group threatens the area. Around 50 were first evacuated by helicopter, the rest later by bus, to Baghdad, where they are being housed in a hotel. More than 100,000 Chinese workers are in Iraq, and China is one of Iraq’s most important trading partners.