Looming carbon emission limit speeds up coal use in the fast developing Asia
Mushfiqur Rahman
1.04.2012
The US President imposed first-ever restrictions on greenhouse gas pollution from new coal-fired power plants on March 27, 2012. As a result, the new power plants will have to limit their greenhouse gas emissions (mainly carbon dioxide) within maximum 1,000 pounds (454 kg) for each megawatt hour of electricity generation. It is indeed a strict demand put forward by the Environmental Protection Agency (EPA) of the USA. Analysis say the new law will raise the electricity prices.
The average coal-fired power plants in the USA emits 1,768 pounds of carbon dioxide per mega watt hour and the natural gas fired power plants emit 800-850 pounds of carbon dioxide per megawatt hour power generation. Although the new rule would not restrict the existing coal-fired power plants to operate but the American utility companies press hard by threatening their power plant shut down rather than upgrading them with costly pollution control technology. Some people suggest that Obama administration wanted to favour natural gas-based power plants, instead of coal ones. The Peabody Energy, the largest coal mining company in the USA spokesman claimed that ‘a standard of 1,000 pounds per mega watt hour for coal-fired power plants would require something that does not exist as a commercial technology’.
Energy industry experts view that the new rule will push the coal-fired power plants to retrofit their plants with carbon capture technology to filter off the plant’s emission. Unfortunately, the carbon capture technology for power plants are yet to become economically viable and commercially available. There are 492 coal-fired power plants in the USA and 106 plants are scheduled to close down within next year. For the past decades coal had been the major fuel to power electricity in the USA. In 2003 coal-fired power plants accounted 51 per cent of electricity generation in the USA; however, in 2035 coal-fired power plants are expected to meet 35 per cent of the US electricity needs.
The Obama Administration targets the strict emission standards with the expectation to increase fuel efficiency and reduction of air pollution. Already the US government imposed a new standard for car fuel efficiency to an average of about 100 km per gallon (4.28 liters) by the year 2025. If achieved, this standard will save US dollars 8,000 over the life of a car for an American family.
In the USA, well head natural gas price had fallen to US$ 3.14 dollars per thousand cubic feet in December 2011 from its peak of US$ 10.79 dollars in July 2008, thanks to the technology for production of abandoned shale rock formation gas at a cheaper price in the recent years. On the contrary, coal prices has jumped to an average of 6.7 per cent per year in the last decade.
Though the US EPA is firm to restrict the role of coal-fired power, China, India, Japan, Australia and many other countries in Asia, Africa and Europe continue to use and encourage coal as major fuel for power generation. As per ‘The Economists’ report, China produces over 3.0 billion tonnes of coal annually which is almost three times the output of coal in the USA. And China became the largest coal importer last year pushing Japan to number two. More than 80 per cent of China’s electricity generation is coal based. The booming economy of China has transformed the nation from a net exporter of coal into a monster importer. China alone consumes nearly half of the coal burnt annually in the world according to the ‘Carnegie Endowment for International Peace’. The analysts do not expect a drop of coal consumption by China any time soon. The Chinese government recently announced that it planed to cap its coal production and demand at 3.9 billion tonne in 2015 to reduce fossil fuel emissions and encourage renewable energy generation.
Over the past five years approximately half of the Chinese coal imports were accomplished from Australia and Indonesia. But the future demands for Chinese imports of coal grows beyond the ability of Australian and Indonesian coal supply capacity. China has been trying to increase its own coal mining capacity but the Chinese coal fields are located far deep in the mainland and away from the major growth centers. Also its internal rail systems are struggling to bring coal from inland mines to the biggest power users at the coast. Therefore, the Chinese are compelled to rely on more import coal from overseas sources. Last year China imported 182 million metric tonnes of coal.
Considering the limited supply sources, China has now been considering to build up new terminals and port facilities to import coal from the USA. But the Environmentalists argue that the USA should not rush to fuel Chinese economy simply because the demand is there. Some critics view that the USA has been indenting to play in the 21st century economy the role of developing Africa and Latin America in the 20th century as dependent economies that export natural resources.
On the other hand, coal is the fuel used to generate most of India’s electricity requirements. In India, 78 per cent of consumed coal comes from domestic mines. It has currently 190,593 MW installed capacity for power generation of which 55.3 per cent is coal based. The government-owned Coal India Limited projected an overall coal shortage of about 142 million tonnes in the fiscal year (FY) 2012 and the gap is to be met through expensive imports. The major private power producers in India, including Tata Power, Essar Energy, Reliance Power and Adani Power, announced that the coal supply scarcity forced them to stall in new coal-fired power plants development. The supply-side constrains for coal push the independent power producers in confusion and an additional 26,000 MW of planned new power projects may have to stay in the planning boards for some time more.
We, in Bangladesh, have been systematically facing power and energy shortages. We do not have the uninterrupted supply security for energy. The utility companies have been claiming that due to the high subsidy for power and energy commodities, they have been facing huge operational losses. As the trends show, utility companies are no more willing to continue subsidy for energy commodity price. The role of natural gas in Bangladesh has reduced from 90 per cent to 67 per cent for electricity generation. The high cost imported liquid diesel and furnace oil have filled in the gap. But at the same time the frequent power price-hike is linked with imported liquid petroleum costs. Energy experts suggest to switch on to coal-fired power as an alternative affordable and reliable primary fuel. The government has a plan to generate 11,000 MW electricity within 2030 with coal. And major parts of the coal have to be supplied from domestic sources.
It is a challenging task indeed. Unless the initiatives are taken immediately, various restrictions on coal productions and power generation from coal will make the task costly. The developed economy has started demonstrating the stringent restrictions on coal consumption. First developing nations in Asia are trying to make maximum use of coal before the new restrictions become applicable for the majority of the nations. Why should we, in Bangladesh, wait for the difficult time to come for making decisions for developing our coal and benefit from it?
Dr. Mushfiqur Rahman is a mining engineer. He writes on energy and environment issues. [email protected]
