Photo: Hamish Blair/Getty Images
What’s the energy of the future?Some hold out hope that renewables like solar and wind will win the day in powering the globe.
There’s also a big nuclear contingent.
And yet others are convinced that the future of energy belongs to natural gas.
They’re all wrong. The energy of the future is coal.
Peabody CEO Greg Boyce says it is expected to become the world’s largest energy source, and has been the fastest-growing major global fuel.
He’s not alone in thinking so. According to BP’s Statistical Energy Review:
- Coal will remain China’s principal commercial fuel forever. Its share will fall from 70 per cent to 55 per cent by 2030, but only because growth will have slowed and not because of energy competition.
- Same for India: Coal will remain the primary source of energy growth, with consumption growing 48 per cent over the next 20 years.
- Global coal use will grow 39 per cent over the next decade, tops for all electricity-generating fuels.
- Nuclear, hydro and other renewables combined will only match coal’s share of the global energy mix in the next 10 years.
- Consumption growth in non-OECD countries will average at least 2.1 per cent per year through 2030.
Here’s what all that looks like in graph form:
How can that be?
It remains the cheapest power source in the world — less than $3 per MMbtu and falling, while natural gas appears to have permanently breached that level. Natural gas currently trades for about $10/mmbtu in Europe and $15/mmbtu in Asia.
Meanwhile, nuclear costs several thousand dollars per KW of installed capacity versus closer to $1,000/KW for the other two fuels, according to David Dismukes, Associate Director of the centre for Energy Studies at Louisiana State University.
As it turns out, Europe gets much of it from the U.S., where transporting coal is much more cost efficient. Coal remains the lifeblood of our railroads.
And we’re looking to start shipping our coal to China.
We put together a presentation showing why the pronounced death of coal is extremely premature.