It’s the best of times for coal. Despite its negative image, coal remains a critical component of the world’s energy supply. It is the biggest source of fuel for electricity generation, and demand is rising, mostly stoked by the ravenous power plants of China and India ÔÇô two of the world’s booming economies.
In China, demand for coal in 2010 resulted in a traffic jam 120km long caused by more than 10,000 trucks carrying supplies from Inner Mongolia. India is increasing coal imports. Some projections indicate that by the end of this decade, coal will knock off oil from the top spot as the dominant fuel source. Two-thirds of coal’s growth will be driven by demand for electricity in China, says the consulting firm Wood Mackenzie.
“China’s demand for coal will almost single-handedly propel the growth of coal,” William Durbin, Wood Mackenzie’s head of global markets, said in a recent speech. A 2012 report of the Coal Industry Advisory Board (CIAB) of the International Energy Agency (IEA) details the catalyst role of coal in the overnight transformation of China’s economy. In 1970, China had little external economic activity and limited modern development: over 600 million people lacked electricity, the below?age 5 death rate was 120 per 1 000 children, only 1 in 500 people had a telephone, and the GDP per capita was USD 122. However, China utilised increased energy production, especially coal?based electricity, to catapult itself to the centre of the world’s economic stage. In just 15 years (1990?2005), China provided access to electricity to over 450 million people. The electrification of both the cities and the countryside established an energy infrastructure that underlies China’s historic move towards modernisation. Today, 97% of China’s population has access to electricity.
The IEA underscores that to meet the growing demand for energy, China turned to its most plentiful, stable, versatile and affordable resource ÔÇô coal. China has only 3% of the world’s oil and natural gas reserves but has 14% of its coal. “A new wave of Chinese policy makers recognised this asset early on and committed to making the country a moderately well off society by 2030,” the IEA says. “Coal is seen as the least?cost option to move forward.” It appears the plan is working. In terms of absolute numbers, no nation has made more progress towards the UN Millennium Development Goals than China. In 2010, the World Bank stated that about 85% of the global population elevated from poverty since 1990 was Chinese.
China’s coal consumption grew from 604 Mt in 1980 to over 2 800 Mt in 2008. Utilisation of its coal resource enabled China to increase electricity output five-fold from 1990 to 2008. Coal accounted for 65% of that increase. In India, almost 40% of the population lacks access to electricity and the benefits such access brings to the quality of life. India’s policymakers have pronounced that coal will continue as a major energy resource.
India relies on coal for 55 percent of its electric power and struggles to keep enough on hand. Beyond China and India, the IEA notes that a range of other countries will also have to rely on coal to meet growing electricity demand. With abundant coal reserves, Botswana stands to benefit from the heightened demand for the resource. The government developed a national strategy on coal development in 2012 ÔÇô the Coal Roadmap ÔÇô which aims to develop Botswana’s infrastructure to take advantage of the country’s estimated 212-billion tonnes of coal reserves. Botswana has capacity and potential to produce up to 90-million tonnes a year of seaborne thermal coal for export markets, the main potential export market being Asia, especially India and China. A Coal Development Unit within the Ministry of Minerals, Energy and Water Resources was established to oversee and ensure the implementation of a strategic coal monetisation plan and coal value chain improvements, as well as to coordinate related infrastructure projects.
Coal is an important factor in Botswana’s strategy towards self-sufficiency in electricity, which is to generate enough power for domestic consumption as well as for export. The local coal use of 1million tonnes was projected to grow up to 3million tonnes to supply Morupule B power station when fully commissioned. These are small figures , which underscores the focus being put in developing infrastructure to facilitate export of the raw coal. Permanent Secretary in the Ministry of Minerals, Energy and Water Resources, Boitshoko Paya, talks of a window of opportunity that Botswana has to monetize its coal while the resource is still relevant. He estimates that period at about 50 years. An important link in Botswana’s coal export strategy is the Trans-Kalahari Corridor rail link which will connect Botswana to Namibia’s Atlantic port of Walvis Bay. An agreement between the two countries was signed last month for the project that will include a railway line, a coal terminal and associated loading facilities to the Namibia-Botswana corridor.
The Trans-Kalahari rail line will provide an alternative coal transport route to the current line to the Richards Bay Coal Terminal, in South Africa, and will have the advantage of reaching overseas markets a week earlier than exports from the Richard’s Bay. Construction for the US$9.2 billion project is expected to stretch over the 2014-2019 period. When fully functional, the Walvis Bay Commodity terminal is envisaged to handle about 65 million metric tonnes of coal per annum. Coal may seem an odd star attraction in a world where renewable energy sources like solar, wind and hydroelectric power are gaining attention. Abhorred by environmentalists because it creates so much pollution, coal still has the undeniable advantages of being widely available and easy to ship and burn. The biggest attraction, however, is low cost.
By many estimates, burning coal still costs about one-third as much as using renewable energy like wind or solar. Coal is not subject to the vagaries of windless or sunless days, and can easily meet base-load demands of electricity consumers without interruption. But even with the benefit of all that counts in favour, if this is the best of times for coal, it’s also the worst of times. Its position as the undisputed cock of the walk is under assault, mostly out of environmental concerns. Paya concedes that the environmental factor cannot be removed from the equation as even financiers are also worried about the environment. He draws this parallel. When the power station at Morupule A was constructed, it had no carbon emission control system. But when the financing package for Morupule B was being put together, emission control was one of the top priorities. With the planned refurbishment of Morupule A, emission control will be one the things being attended to.
The soaring use of coal, a joint statement by climate scientists warned in November, is leading the world towards “an outcome that can only be described as catastrophic”. Most scientists and engineers agree that humankind will ultimately need a grid driven by renewables: three-quarters or more of the world’s energy provided by sun and wind. The tricky part is getting there. Steven Chu, the Nobel-winning physicist who was United States secretary of energy until last year, believes that deploying solar and wind on this broad scale ÔÇô a goal he strongly supports ÔÇô cannot happen before the end of the century.
“Even if we cut demand [for fossil fuels] by 50 percent,” Chu said in an interview with the news site Wired, “something I would be very much in favour of, solar and wind can’t yet provide the kind of steady power needed by a modern society”. The challenge therefore is how to mitigate, or even completely remove, the harmful effects of an energy source such as coal. One such attempt is a technology under development known as carbon capture and storage (CCS). It would allow industries to burn just as much coal as before but remove all the pollutants. In addition to scrubbing out ash and soot, which are now standard practice at many big plants, they would separate the carbon dioxide and pump it underground, where it can be stored for thousands of years. Many energy and climate researchers believe that CCS is vital to avoiding a climate catastrophe. Because it could allow the globe to keep burning its most abundant fuel source while drastically reducing carbon dioxide and soot, it may be more important than any renewable-energy technology for decades to come. Chu has declared that CCS is essential.
“I don’t see how we go forward without it [CCS],” he says. “For decades to come fossil fuels will be a very important factor, and we’ll need CCS to mitigate that.” CCS has its critics, who include the international environmental NGO, Greenpeace. In 2008, Greenpeace issued a major study arguing that CCS is a “dangerous gamble,” in part because “safe and permanent storage of CO2 cannot be guaranteed”. Instead of the “false hope” of carbon capture, Greenpeace and other activist groups contend that the “real solutions” to climate change are “renewable energy and energy efficiency.” At the Ministry of Minerals, Energy and Water Resources, Paya accentuates Botswana government’s position. “There is no doubt that renewables are the future,” he says. We shouldn’t lose sight of that. There are even going to be cars driven by solar…. That is why we have to beneficiate our coal now and in a big way.”
