Milton Catelin, Chief Executive, WCA

The United Nations recently released the “zero draft” of the outcome document for the Rio+20 Earth Summit scheduled for June. There is some important material in the draft, but there is still plenty of room for improvement. In the International Year of Sustainable Energy for All the zero draft does include reference to a goal of universal access to modern energy. It also proposes doubling energy efficiency and doubling the share of renewable energy in the mix.

But the draft does have some problems.

The first problem relates to the goal for universal access to modern energy. An important goal, but the wording lacks ambition. It refers to providing “a basic minimum level of modern energy services for both consumption and production uses by 2030”. If that basic level equates to what the IEA proposes in its Energy Access for All scenario then that means “use of a floor fan, a mobile phone, and two compact fluorescent light bulbs for about five hours a day. In urban areas, consumption might also include an efficient refrigerator, a second mobile phone per household and another appliance, such as a small television or a computer.” Critically, the definition also states “some other categories are excluded, such as electricity access to business.” (See the World Energy Outlook 2011).

Access to energy is essential to addressing the problems that cause poverty. After food and shelter, energy is one of the fundamentals of modern society. Without energy, people cannot access the opportunities provided by the modern world. The world needs to be much more ambitious about the level of energy it wants to see made available to those who currently struggle with little or no electricity access.

To meet that ambition we need to be much more realistic. And there comes the second problem with the zero-draft. Rather than focusing on all low carbon energy sources the draft idealistically promotes doubling the share of renewable energy in the mix. Renewable electricity is important in meeting the world’s energy needs but it can’t do the job on its own. To ensure that both energy access and environmental goals are met, all sources of low carbon energy will be needed – which means using fossil fuels, and particularly coal, with advanced generation and carbon capture and storage technologies. According to the IEA more than half of on-grid electricity additions needed to meet their Energy Access for All scenario will come from coal. (Again see the World Energy Outlook 2011).

That means when the world convenes for the Rio+20 conference in June it must look to all sources of low carbon energy to meet more ambitious energy access targets. Otherwise we risk leaving behind the 1.3 billion people who struggle without electricity out of the clean energy revolution.

Peabody Energy in Mongolia

As the world’s largest, private sector coal company, Peabody Energy set a strong and sustainable precedent when, in 2010, it completed the first coal mine restoration project seen in Mongolia, setting best practice standards for environmental protection. One year after seeding, the restored site is a lush pasture, with waist-high forage, more than four times as productive as adjacent native grazing lands.

To find out how Peabody Energy achieved this, download the Peabody Energy Mine Restoration Case Study.

Milton Catelin, Chief Executive, WCA

On Monday the International Energy Agency released a special excerpt of its upcoming World Energy Outlook 2011 entitled “Energy for all: financing access for the poor”. In this report the IEA estimated that worldwide there are over 1.3 billion people lacking access to modern energy, of which 95% live in either Sub-Saharan Africa or developing Asia.

The report updates the IEA’s Energy for All scenario, projections for which would see universal access to electricity achieved by 2030. It estimates that to achieve this objective an investment of $1 trillion is needed for universal access to electricity by the year 2030. That’s an additional $48 billion a year, or five times more than was invested in improving energy access in 2009. The main focus of the report is how that investment can be financed. The basic message is that raising the required finance is possible – it’s only about 3% of expected investment in energy infrastructure to 2030 – but it will be a challenge, especially if current economic and financial market difficulties continue. Most importantly, all sources of finance -  the public sector, development banks and private finance – have a role to play.

But while the targets set by the IEA are important, they are set at a level that risks significantly underestimating the level of electricity generation actually needed to genuinely address global poverty. The electricity target in the Energy for All Case would only supply minimal and intermittent electricity access and the IEA’s definition specifically excludes electricity access for business and industry. This is important given increasing urbanisation in developing countries. It is also particularly important given the role that economic growth can play in supporting human development. Growth of business and industry will be the only way that poverty can truly be eradicated in developing countries and the energy needs of business and industry appear to be ignored in debates about energy access.

Coal has a very big role to play in addressing this gap. In the IEA’s Energy for All scenario about 45% of the increased energy supply will come from extending existing national electricity grids. The IEA says that more than half of that electricity will be generated from coal. More ambitious energy access targets that support the growth of businesses and industry will need even more energy, especially through further strengthening of national electricity grids. Coal can supply a very significant proportion of the energy needed. The countries that need energy the most are in sub-Saharan Africa and development Asia, two regions that have significant coal reserves and the IEA notes that ample coal reserves are available to meet the growing demand.

Next year the world is convening for the Rio+20 conference on sustainable development. Genuine sustainable development won’t be achieved while more than a billion people and businesses and industries across the developing world lack a reliable electricity supply. The Rio conference needs to set an ambitious target for access to modern energy that can support the economic growth that is essential to eradicating the scourge of global poverty.

Benjamin Sporton, WCA Policy Director

Last week the UN Secretary-General, Ban Ki Moon, announced the formation of a High Level Group on Sustainable Energy for All. The group is to be led by UNIDO Secretary-General Kandeh Yumkella and Bank of America Chairman Charles Holliday.

Access to energy is a key development challenge. According to the International Energy Agency (IEA) 1.4 billion people worldwide lack access to electricity, with another billion having to deal with unreliable electricity networks.

In November the IEA will be releasing the World Energy Outlook 2011 (WEO). In a video previewing WEO’s  release IEA Chief Economist Fatih Birol said:

“Coal is a key fuel. And when we look at the last 10 years, the global energy mix, if it increased by 100 units – coal, oil, gas, everything put together – 50 units are coming from coal. A backbone of electricity generation of today, and according to the analysis will stay so with the current policies in place.”

Even more importantly coal is expected to play a significant role in providing the increased electricity required to meet the energy demands of those who currently lack access to electricity.

If the world is to meet global emissions reduction targets while meeting the ever-growing demand for energy, then advanced coal technologies – such as high efficiency low emissions power generation and carbon capture and storage – must be supported by governments and other international institutions.

It is therefore essential that the role of coal in meeting energy access objectives is given due consideration alongside other energy sources. The coal industry is committed to a sustainable energy future in which the world succeeds in addressing both its development and environmental objectives.

The High Level Group must recognise that coal will be part of securing a sustainable energy for all.

This letter calls for funding under the EU and Member State budgets to match private investment in Strategic Energy Technologies including Carbon Capture and Storage.

Read the formal letter

Benjamin Sporton, WCA Policy Director

Last week I attended a workshop on the inclusion of carbon capture and storage (CCS) in the Clean Development Mechanism (CDM).  The workshop was set up following the decision at last year’s COP16 climate conference in Cancun that CCS should be included in the CDM provided a set of rules (known as modalities and procedures) could be agreed to.

Getting agreement on these rules is the last step on the long road to get CDM eligibility for CCS projects. With a range of experts invited to present at the workshop, three things were clear:

1. CCS is an essential technology if the world is going to meet its emissions reduction targets.
2. CCS is ready to be deployed now, this view was backed up by a speaker from the Natural Resources Defense Council in the US; and
3. Issues that opponents of including CCS in the CDM have raised as problems can easily be addressed in the modalities and procedures.

In the months leading up to the next round of climate negotiations at COP17 in Durban, South Africa the UNFCCC Secretariat will have the task of developing rules for the inclusion of CCS in the CDM. Their task should be made easier by the view of the participants that the rules for CCS should simply be added to those that already exist for the CDM, rather than starting from scratch all over again.

Opening the workshop, the UAE Special Envoy for Energy and Climate highlighted that only about seven of the 80 CCS projects around the world are currently taking place in developing countries – and that there are very few CDM projects in Africa. With the significant development issues being faced in Africa, access to clean energy will be key to poverty eradication. Africa also has significant coal reserves and including CCS in the CDM will help support the deployment of cleaner coal technologies across the continent.

This workshop showed the importance of deploying CCS in the developing world and that the real challenges are economic rather than technical or legal. That means when we get to Durban at the end of the year it will be imperative for real progress to be made on this issue, get the modalities and procedures signed off, and support deployment of this key technology in countries that need access to clean energy.

Milton Catelin, Chief Executive, WCA

In 2010 coal was again the fastest growing fuel, according to BP and the IEA. The IEA says that in 2010 global coal consumption went up by 10.8%. In comparison to this, global demand for gas and oil rose by 7.4% and 3.1%. Coal has been the fastest growing fuel for the past few years and today coal’s share in global energy consumption is at its highest since 1970 (29.6%).

Most of the new coal demand comes from the developing world and is used for electricity generation. China now accounts for over half of the world’s coal production and consumption. But coal consumption is also on the rise in the developed economies. In the EU, coal consumption went up by 4.8% last year and coal provides around 29% of electricity. Europe is also an important producer of brown coal and last year, almost half of the world’s brown coal production came from Europe. There has also been a spectacular rise in the demand for coking coal, which is a key ingredient for producing steel. Worldwide coking coal consumption increased by over 15% and in Europe by more than 25%.

The demand for coal continues to grow as the world needs more steel, cement and energy.  Over the past ten years, when calls for phasing out coal and other fossil fuels were strongest, global coal demand rose by 61%. We must recognise that a growing demand for coal is now a reality. It is the backbone of electricity generation and a key resource for the steel, cement and aluminium industries. Responsible policy makers should not blindly ignore the world in which we live.  If they are truly serious about climate change, governments should invest in innovative technologies which allow sustainable use of coal.

Benjamin Sporton, WCA Policy Director

Access to energy is a key challenge facing the world’s poor.

In its 2010 World Energy Outlook, the International Energy Agency noted that there are currently 1.4 billion people across the globe that lack access to electricity. Without dedicated policy action, the IEA only expects that number to reduce marginally to 1.2 billion by 2030.

International action on access to energy is therefore desperately needed. Access to modern energy is key to sustainable economic and social development. It’s for these reasons that the World Coal Association recently adopted its Energy Poverty and Sustainable Development Policy Statement.

The world faces a huge challenge in meeting the energy needs of both developed and developing countries – and all available sources of energy will be needed to meet that challenge. For many countries coal is a logical choice to meet these energy needs because it is widely available, safe, reliable and relatively low cost. But if the world is to meet its global greenhouse emissions reduction goals while meeting the ever-growing demand for energy, then advanced coal technologies such as high-efficiency low emission power generation and carbon capture and storage must be supported by governments and international institutions. Recognising the key role of coal in supporting energy access and economic and social development across the globe, the policy statement calls for global action to finance the development of CCS and the deployment of advanced coal technologies in the developing world.

In the lead-up to the Rio+20 United Nations Conference on Sustainable Development and 2012 being declared the International Year of Sustainable Energy for All, including a  global goal of universal access to modern energy by 2030 as part of the outcomes of that conference is essential.

One of the big challenges for the coal industry is to reduce the amount of carbon emissions that burning coal produces, while allowing coal to continue playing its vital role as a source of electricity and a key input into industrial processes. Reducing emissions from our energy use is a global challenge, and one every country will need to address to help mitigate climate change.

In 2003 the Australian Coal Association formed the COAL21 partnership to explore options for reducing carbon emissions within the black coal industry. A unique collaboration between industry, governments and the research community, it has successfully shaped policy in Australia over the last decade.

The latest WCA case study profiles the work of the ACA and the COAL21 Partnership and looks at how it is helping Australia to speed up the development and deployment of sustainable low emissions technologies.

Download the Case Study