Energy solutions in the future will be made up of a hodgepodge of renewables and fossil fuel sources. Just how coal will fit into that mix depends on how adaptable the industry is to an everchanging energy sector.
Coal presents the modern world with a paradox that it cannot escape just yet: it is a fossil fuel that impacts the environment but at the same time it is a pre-eminent driver of economic growth, particularly for emerging economies. It is simply not possible to keep the lights on without coal.
Governments, particularly those from the more developed North American and European nations, are adjusting policies in favour of a mix of fossil fuels and renewable energies.
As a result, the coal industry has reached a point where it needs to adapt to a new energy future. One way of doing this is to make coal safe for consumption to ensure it remains a vital part of the energy mix while also trying to meet increasing demand from populous developing countries.
Asia’s pivotal role in coal’s future
Coal’s future is reliant on the increasing demand for energy from developing countries, which, according to the International Monetary Fund, make up a staggering 85% of the global population.
Asia, a continent that increasingly relies on coal, makes up more than half of that figure. Industrialised countries may hastily be phasing out coal and opting for renewable energies and natural gas, but Asia’s influence as a coal-centric energy hub continues to grow. It is for this reason that coal will remain a dominant energy source over the next twenty years.
The International Energy Agency’s (IEA) World Energy Outlook report for 2023 foresees an 18% increase in Central and Southern Asia between 2020 and 2040. Coal will represent 35% of the energy mix in Southeast Asia by 2030 and will increase to 49% ten years hence. Coal imports to Asian countries from the Organisation for Economic Co-operation and Development (OECD) will remain an important component of energy for the foreseeable future as Japan, Korea and Taiwan lack domestic energy reserves.
The report’s most astonishing projection sees China and India accounting for over 70% of global coal consumption by 2026. Globally, coal will be the world’s primary source of electricity through to 2040. By FutureCoal’s estimate, that would be around 27% of total generation.
These statistics indicate that coal’s place in the energy mix remains vital for countries with an upward economic trajectory. For a government looking to ensure unabated economic growth, coal would need to be the backbone of its energy strategy.
Investors agree with these sentiments. In December last year, the largest investment firm in the world, BlackRock, acknowledged that the growing world population will remain heavily dependent on fossil fuels.
This is an indication that while a gradual energy transition is underway, fossil fuels like coal will remain strong performers.
Coal is affordable and reliable
For developing countries, the path to socio-economic progress requires consistent power output, which coal provides. This is in large part to its affordability and reliability compared to other energy solutions. It can provide energy security because it is a domestic source for numerous developing nations. Furthermore, the coal industry is a massive contributor to job creation and a catalyst to manufacturing and transportation infrastructure development.
Southeast Asia is a great case in point. In the past few decades it has shifted from hydropower and gas to coal. The region was then able to fast track its socio-economic development because it created a more resilient energy system. Efficiency improvements and innovations that drove baseload power and energy security made energy more affordable in bulk.
Governments that want to become fully industrialised would be prudent to follow in Southeast Asia’s footsteps and include coal as part of their energy transition. Dismissing coal risks a socio-economic tremor on a global scale.
In this unpredictable economic climate, agility in the form of incentives is key for an easy transition. Governments, investors and the coal industry must work together to incentivise clean coal technologies (CCT) that can aid growth while also meeting their carbon emission targets.
Clean coal innovations key to sustainable industry
Progress in CCTs and carbon capture, utilisation and storage (CCUS) research have already unearthed novel solutions for mitigating environmental impacts and meeting high demand.
In the US, the Great Plains Synfuels Plant got a multimillion-dollar cash injection to expand its CCUS operations in 2021 and has since demonstrated how proven technologies can reduce coal emissions by 90% to 99%.
German-based biomass materials production start-up, Sustainable Carbon Cycle Industries (SCCI), is looking at introducing sustainable, zero-waste and low-carbon emission charcoal by replacing traditional production methods that damage the environment. Their signature asset in Tanzania can remove some 33 000 tonnes of carbon per annum by 2030.
However, when it comes to sheer scale, China is in front. Its clean coal-to-hydrogen facility in Yulin, Shaanxi, is the largest in the world, producing 350 000 tonnes of hydrogen annually and reducing CO₂ emissions by approximately 220 000 tonnes each year.
There currently exist innovations that promise to be the go-to solutions of the future. Hybrid power systems combining coal and renewables can optimise energy supply. Advances in coal gasification and liquefaction can provide cleaner and more efficient energy solutions. And integrating CCT and CCUS technologies into existing coal-fired power plants can help them reduce their carbon footprint.
These examples spell a robust start to the clean coal revolution that can directly plug into the circular economy. Coal is a versatile commodity and every part of it can be reused.
Through its philosophy of Sustainable Coal Stewardship – which embraces a new way of looking at the coal value chain – FutureCoal supports initiatives that focus on innovative coal utilisation and emissions reduction technologies. We also encourage companies to partner with academic institutions and industry leaders to drive breakthroughs in clean energy.
Last year, the World Coal Association rebranded itself to FutureCoal, not only to demonstrate its agility as an industry but to also announce that it is prepared to be a part of the new energy future with cleaner, more sustainable products. The future of coal might look great. But the future of overall energy is clean. And that, in all honesty, will be the greatest achievement of all.
Originally Published on: www.crown.co.za