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.
It was the only fossil fuel to record above-average growth and was the fastest-growing form of energy outside renewables
Their factories are running at full steam, and entire communities have been built up in and around coal factories in India. They depend on scavenging for a livelihood.
Schools that offer education for free have a hard time convincing parents to send their children to school, since they are seen as a source of income.
United Bulk Terminal, the biggest dry-bulk export facility on the Gulf, plans to upgrade coal and petcoke sites over the next two years.
A Kentucky-based firm recently signed a $7-billion deal with an Indian group to supply 9m tons of coal from Appalachia.
More than half of U.S. exports, which represented about 13 per cent of U.S. production, went to Europe.
UBS says utilities will build as much as 10,600 megawatts of new coal plants in Europe over the next four years.
A drought in Spain hit the country's hydro-power generation capacity, forcing utilities to import more coal.
Even in nuclear-heavy France coal's share of the country's energy mix has increased by almost 45 per cent compared to 2011.
Europe's energy future remains muddled as it grapples with its desire to reduce carbon emissions versus reducing nuclear.
A year ago, the province approved a $1.7-billion expansion of a plant that will generate 500-megawatts.
In 2002, metallurgical coal exports from British Columbia totaled 5 per cent of the value of all commodity exports; in 2011, it was 22 per cent.
Analysts say the economic opportunity for Pacific Northwest locals to increase coal traffic capacity to Asia is huge.
Over the past decade, coal consumption in the Asia-Pacific region grew 31.8 per cent per year on average.
In 2011, Asia-Pacific's coal production reached an estimated 4.87 billion tonnes, or around 65 per cent of total global coal production.
Over the next five years, China and India will require more than 1.2 billion tonnes of additional coal for their electricity needs.
The Party hopes to increase production capacity to 90 per cent by the end of the 12th Five-Year Plan in 2015.
China's coal production is expected to grow at a compound rate of 3.5 per cent through 2020 to reach 4.5 billion tonnes per year.
The country's coal consumption is expected to increase at a compound rate of around 4.6 per cent per year through 2020, to reach 5.2 billion tonnes per year.
Consumption is expected to continue to increase at a compound rate of around 5.2 per cent thru 2020.
Exports are expected to decrease at a rate of around 10 per cent per year to reach 20 million tonnes per year by 2020.
Chinese coal imports are expected to increase at a compound rate of 15.4 per cent per year thru 2020 to reach 714.3 million tonnes.
India will only have 750 MT of coal available, and would have to import to make up the difference in consumption.
But people from all over the country seek out such work that reportedly pays $150 per week — double the national average.
A worker climbs a rickety ladder while carrying about 132 pounds of coal that is supported by a head strap.
Ministers recently warned that Zimbabwe's rail infrastructure was not equipped to handle the country's looming coal production growth.
Higher exports of iron ore from West Africa will help world shipments of coal double by 2017, according to DNB Bank ASA.
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