Some time in the last few days I heard a person who should know better say that 1800 coal-fired power plants were being built around the world. One wonders where this (dis)information comes from. It went unchallenged by the ABC interviewer, showing once again that ABC journalists and presenters need an update on climate change – in the national interest.
As Adam Morton at The Guardian writes The world is going slow on coal, but misinformation is distorting the facts. Back in June, John “Wacka” Williams asked the Parliamentary Library how many coal plants there were, how many were being built, how many closed etc and could he have the information by 4pm?
The Library included the information that 621 units were being built, the point here being that power plants typically have multiple units. Hazelwood had eight.
Unfortunately, this information was wrong.
Since then, of course, the information has travelled and has become plants rather than units.
- Analysis of CoalSwarm’s database shows that in July, construction was taking place at 300 plants globally. Of those, 183 were new power stations and 117 extensions of existing plants. But that number is changing rapidly.
Last week, China announced it was stopping or postponing work on 151 coal plants that were either under, or earmarked for, construction.
The reason? They have a glut of power.
For the same reason many countries are using existing coal plants less.
Coal plant capacity was still increasing to July 2017:
However, the real story is in coal production world-wide. Here we go:
The graph sourced from a BP Statistical Review of World Energy shows peak coal in 2013, with production dropping year by year from there.
In the report Boom and Bust 2018 we get the following, which shows where the main action is:
This graph of coal capacity in pre-construction and construction gives a somewhat different impression:
Please note, however, that each category is diminishing.
All these projects need finance, and it seems that many in the ‘rest of the world’ have been financed by just three Japanese banks – Sumitomo Mitsui Banking Corporation (SMBC), Mitsubishi UFJ Financial Group, Inc. (MUFG) and Mizuho Financial Group (Mizuho). According to RenewEconomy New Japanese bank policies rule out one third of overseas coal plant finance because they now demand that power plants use ultrasupercritical technology. This article is more specific:
- SMBC would be definitively ruled out of 27% of its pipeline projects by capacity.
- MUFG would be ruled out of 31% of its pipeline projects by capacity.
- Mizuho would be ruled out of 40% of its pipeline projects by capacity.
In an update to Reconnecting climate change politics with reality I cited an article by Giles Parkinson at RenewEconomy Fair dinkum! Renewables and storage soon to be cheaper than existing coal plants:
- A new report from Australian and international researchers suggests there is no prospect for a new coal generator in Australia, and even existing coal generators are going to be challenged by the falling costs of renewables and storage.
The report, “Implementing coal transitions: insights from case studies of major coal-consuming economies” has been produced by an international consortium, including French think tank IDDRI, and researchers from the Australian National University, among others.
It is the Australian conclusions that are the most striking, particularly in relation to the renewed political dialogue around the need to protect existing and encourage new investments in what the Coalition government is describing as “fair dinkum” “reliable”, “24-hour baseload” power. i.e. coal.
Frank Jotzo, from the ANU, has some sobering news. The point where new wind and solar, backed by energy storage become cheaper than operating old coal plants is not far away – a conclusion more or less confirmed by AGL, with its plans for Liddell.(Emphasis added)
Frank Jotzo, Salim Mazouz and John Wiseman wrote Coal transitions in Australia: Preparing for the looming domestic coal phase-out and falling export demand 2018. This was one of six country reports as background data for the Coal Transitions Project which explores how “below-2°C”-compatible transitions away from thermal coal could be implemented. The Synthesis Report found that, with the right policies, coal transitions that are consistent with the goals of the Paris Agreement can be done in an economically affordable and socially acceptable way.
The Australian report looks at what might happen based on economics, without a specific emissions trading policy or other similar climate-specific policies.
It looks at scenarios where the life of existing coal plants may be shortened, from 50 years to 40, or even 30. They come up with these scenarios:
The top two panels in Figure 10 illustrate the retirement pathways associated with a fixed 50 year and 40 year retirement age for the remaining coal fleet. The ten-year difference between the two scenarios makes a dramatic difference for future domestic coal use in Australia, especially in the 2020s. Note that the average age of the past ten coal plant retirements in the NEM was 40 years.
- The bottom two panels represent our coal plant closure scenarios, recognising the mounting economic pressure on coal plants, even without climate policy and based on higher levels of renewables penetration and changing load profiles in the NEM.
They then set these scenarios aside and formulated scenarios about what they thought would happen when the cost of new renewables started to prove cheaper that maintaining existing coal. Their ‘moderate scenario’ saw initial closures lagging what AEMO came up with in their Integrated System Plan (AEMO 2018). Initially they assumed closure after 55 years, but then retired plants progressively earlier from 2024 onwards as the economic pressure of cheap new renewables builds up. This is what the moderate scenario looks like by generation type, where wind and solar are undifferentiated:
There is a two-page outline of the overall project here written back in 2016 which recognised that holding the increase in global temperature to well below 2°C and pursuing efforts to limit it to 1.5°C would require the early phase-out of both coal production and consumption.
In the earlier post I mentioned that last November 20 countries signed up to phase out coal power by 2030 in the Powering Past Coal Alliance. Frank Jotzo told the SMH that 36 governments and 28 major firms had now committed to phasing out coal from the power sector by 2030.
Yet here in Oz the coal-fired new government sees resources minister Matt Canavan saying that the Paris deal does not prevent us from building new coal, or anything we choose, for that matter:
Canavan said on Friday the Paris commitment was a three-page document that allowed Australia flexibility to build new coal plants. The resources minister said rather than focusing on the situation in 2030, “what I want to focus on is solving the crisis we have in energy today”.
“We have to build power stations. There’s nothing in the [Paris] agreement that would stop us building power stations, including coal-fired power stations,” Canavan said.
“We need new ones”.
If you take one pencil and one back of an envelope, no calculator required, you will find what living in the moment with coal-fired power means. A year to get the project up, seven years to build and commission it, then a 40-year life to get a return on investment. Yet around the time you expect the engine of death to spew its first excrescence into the atmosphere, the project will be uneconomic and unable to underbid renewable energy which takes about a third of the time to build.
This morning, Saturday, the hills were alive with the sound of the bright shiny new PM Scott Morrison talking up the death of the NEG, the National Energy Guarantee. The coalsheviks have won. There was even talk of dumping the Paris Agreement, after foreign minister Melissa Price was just back from assuring the Pacific Leaders Forum that Paris commitments were ‘front of mind’ for ScoMo. But he too is emphasising that he lives in the present.
This morning also the AFR has an article Business and industry to ‘go it alone’ on a new energy policy after death of NEG:
State governments, business groups and industry are going it alone and preparing a framework to provide certainty for investment in the energy sector, saying they are dismayed by the implosion of the Coalition’s National Energy Guarantee and the policy vacuum that has followed.
With new federal energy minister Angus Taylor under fire for not properly engaging with his state ministers since his promotion, state Labor governments are contemplating their own initiatives to ensure reliability in the National Electricity Market, which would also help meet Australia’s emissions reduction targets.
They say a return to investor uncertainty will result in higher electricity prices.
There is also a push to flush out federal Labor to find out what its plans are for national energy policy post-NEG, especially if they win the federal election, which is due early next year. This could involve resurrecting the NEG or using another mechanism such as the Finkel review’s discarded Clean Energy Target to meet the Paris climate targets.
Business groups and other stakeholders have been left stunned by the collapse of the NEG and have started thinking about ways to circumvent the Coalition government’s apparent paralysis on the long-term energy policy framework.
See also RenewEconomy Australia gets out the wrecking ball, again, in international climate talks:
Words fail, they really do.
If they didn’t I would use the words of The 2018 Report of the Global Commission on the Economy and Climate Unlocking the Inclusive Growth Story of the 21st Century: Accelerating Climate Action in Urgent Times. From the Key Findings, we have a choice:
We are on the cusp of a new economic era: one where growth is driven by the interaction between rapid technological innovation, sustainable infrastructure investment, and increased resource productivity. This is the only growth story of the 21st century. It will result in efficient, liveable cities; low-carbon, smart and resilient infrastructure; and the restoration of degraded lands while protecting valuable forests. We can have growth that is strong, sustainable, balanced, and inclusive.
The report found:
While recognising the shortcomings of current economic models, analysis produced for this Report found that bold action could yield a direct economic gain of US$26 trillion through to 2030 compared with business-as-usual.
I believe that the world economy is currently worth about US$100 trillion.
But ‘business as usual’ is not cost-free:
Making such a shift would also limit dangerous climate change. With each passing year, the risks of unabated climate change mount. The last 19 years included 18 of the warmest years on record, worsening food and water security risks and increasing the frequency and severity of hazards such as wildfires. Disasters triggered by weather- and climate-related hazards were responsible for thousands of deaths and US$320 billion in losses in 2017. Climate change will lead to more frequent and more extreme events like these, including floods, droughts, and heat waves. It is increasingly our ‘new normal’.
That is stating the implications quite mildly. See my post Climate change: the end of civilisation as we know it, posts under the tag Dangerous climate change, and/or the relevant posts at Key posts.
Do you know what you are doing, Mister Morrison?
In his comment of September 10, 2018 at 1:40 pm Geoff Miell links to the BP Statistical Review of World Energy – 67th Edition, published 13 June 2018 which is a snap-shot of the calendar year 2017, and comparison with previous years. Here are some graphs.
First, coal production by region:
Second, coal consumption:
I’ve split them for legibility. The graphs are followed by the note:
World coal production increased by 105 million tonnes of oil equivalent or 3.2%, the fastest rate of growth since 2011. Production rose by 56 mtoe in China and 23 mtoe in the US. Global coal consumption grew by 25 mtoe, or 1%, the first growth since 2013. Growth was driven largely by India (18 mtoe), with China consumption also up slightly (4 mtoe) following three successive annual declines during 2014-2016. OECD demand fell for the fourth year in a row (-4 mtoe).
Here we have the progress by region of ‘other’ (meaning other than hydro) renewable energy consumption:
Followed by share by region:
With the note:
Renewable energy in power generation (not including hydro) grew by 17%, slightly higher than the 10-year average (16.2%) and the largest increment on record at 69 million tonnes of oil equivalent (mtoe). Wind provided more than half of renewables growth, while solar contributed more than a third despite accounting for just 21% of the total. In China, renewable power generation rose by 25 mtoe – a country record, and the second largest contribution to global primary energy growth from any single fuel and country, behind natural gas in China. The share of renewables in total power generation increased from 7.4% to 8.4% globally, and from 16.5% to 18.3% in Europe, a new high.
Given the impetus behind renewable energy it seems likely that the coal’s share of the market, which has held up reasonably well, will soon start to recede.
Here we have electricity generation by source over time:
- Coal remains the world’s dominant source of power, with a share of 38.1% in 2017, almost as much as natural gas (23.2%) and hydroelectricity (15.9%) combined, which sit in second and third positions. Renewables’ share of power generation was 8.4% in 2017, having risen 6.1% percentage points since 2007. Over the same period, nuclear’s share declined by 3.4 percentage points while coal lost 3.1 percentage points.
In recent years the rise of renewables has effectively made up for the decline in gas and nuclear.
Here’s regional electricity generation by source:
Natural gas is the dominant fuel used for power generation in North America, CIS, the Middle East and Africa. South and Central America gets more than half of its power from hydroelectricity, with a share far higher than any other region. In Europe, nuclear energy is the top source of electricity, but only just, as the shares of nuclear, coal, natural gas and renewables are all in a narrow range of 18-22%
Taking the last two graphs together, early this century China and India went on a rampage of building coal-fired power stations. Their position was that they had the right to industrialise as advanced economies in the west had done before them. Their position was that the West’s legacy production had created the climate change issue and the West should cut back their emissions to make room for the developing countries to catch up.
Whatever the ethics of this position, the planet is now in peril.