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Time to cut energy prices in the EU

Milton Catelin, Chief Executive, WCA

Milton Catelin, Chief Executive, WCA

Today EU Leaders have an opportunity to re-balance the EU’s energy policy and make energy affordability and security of supply just as important as the decarbonisation goals. Over the last six years average electricity prices in Europe have increased by 29%. In USA and Japan prices went up by only 1% and 5%.

This is a worrying trend for European businesses and citizens. Today between 50 and 125 million people are affected by energy poverty in Europe. In Bulgaria, Portugal, Lithuania, Romania, Cyprus, Latvia and Malta over 30% of people are unable to keep their homes warm and face disproportionately high energy bills.

Read my latest article about the role of coal and clean coal technologies in keeping energy bills low and reducing the cost of decarbonisation on EurActiv’s website.

May 22, 2013 | Categories: WCA

Coal and Modern Infrastructure

The fourth fact sheet in WCA’s Coal Matters series is now available.

“Coal and Modern Infrastructure” gives an overview of how coal is used is modern infrastructure and focuses in particular on steel, cement, lime and bricks, and aluminium. The other titles available in this series are:

1. Coal in the Global Energy Supply

2. Global Availability of Coal

3. Coal and Electricity Generation.

Download the fact sheets in PDF format.

May 1, 2013 | Categories: WCA

WCA Members vote on major global news stories

The Members of the World Coal Association (WCA) have voted the growth of the shale gas industry as the biggest news story of the last 12 months.

In a survey of the top ten news stories shaping the global energy sector, WCA’s Members agreed that the boom in the US shale gas industry was the most important news story of the last year. This was followed by the release of International Energy Agency (IEA) statistics showing that the coal industry could equal oil as the world’s top energy source within ten years, the stagnation in the CCS industry, the re-election of US President Barack Obama and, in fifth position, the smog over Beijing.

Milton Catelin, Chief Executive of the WCA, commented: “It has been a year of big changes in the global energy sector, not least the changing dynamic as a result of the growth of shale gas. However, as the IEA figures have shown, the coal industry continues to grow and is expected to rival oil as the world’s largest source of energy in the next decade.”

“What is also clear from our survey is the huge importance of developments in the USA and China on the global energy sector and how it’s covered in the media. The smog over Beijing didn’t just raise environmental issues in China; it raised questions about environmental policies worldwide. Effective environmental policies have to be made against the backdrop of growing energy demand – and technology will be critical to this balancing act. This is why the stagnation in the CCS industry is particularly disappointing and a concern for our members”.

April 23, 2013 | Categories: WCA

GE Mining Joins the World Coal Association

WCA media release

22 April 2013

LONDON – The World Coal Association (WCA) today announced that GE Mining, the division of General Electric (GE) that provides products, services and solutions for the mining industry, has joined the WCA as a Corporate Member.

WCA’s global network of coal companies, national coal associations and other stakeholders with an interest in the future of coal, has now reached a total of 41 members. GE Mining closely follows the addition of Orica at the beginning of this year and further extends WCA’s membership beyond coal producers and strengthens the WCA’s network within the mining services sector.

GE Mining offers products and services for each step of the mining process. These include power generation, water treatment, automation solutions and finance.

Geoff Knox, Chief Executive Officer, GE Global Mining and GE Transport Australia and New Zealand, commented: “By joining the WCA, GE Mining now has an opportunity to engage with fellow member companies from around the globe. The WCA is the only organisation to give the coal industry a strong voice on the international stage. We are looking forward to working with the association and its members on the challenges and exciting prospects that face the industry.”

Milton Catelin, Chief Executive of the WCA, welcomed GE Mining to WCA, commenting: “GE Mining’s membership is testament to the strength of our member-driven organisation. The WCA is now in a fantastic position to engage on wider issues across the coal chain. By joining the WCA, GE Mining has recognised the WCA’s role in helping to secure the future of the global coal industry and we look forward to their input.”

April 22, 2013 | Categories: WCA

World Coal Association welcomes EU carbon price vote

WCA media release

17 April 2013

LONDON – The World Coal Association (WCA) has welcomed this week’s decision by the European Parliament to reject the proposal to allow carbon prices to be propped up in the Emissions Trading Scheme, calling it a triumph of common sense and balanced policy.

The so-called “back-loading” amendment would have allowed the European Commission to change the timing of the auction of emissions allowances and led to the postponement of the 2013-2015 auction of 900 million allowances until 2019-2020 – providing an artificial boost to carbon prices.

Milton Catelin, Chief Executive of the WCA, praised the decision, stating: “The European Parliament has finally made a decision on environmental policy that recognises that there’s a balance to be made between environmental imperatives and economic growth. At a time when across Europe governments are having to make difficult decisions to stimulate economic growth and tackle debt, it would have been madness to agree to back-loading and ignore the cost burden of EU climate policies on consumers and European industry. The Polish government alone has estimated that back-loading would have cost it €1 billion over the period 2013-2020. Other Eastern European EU members would have been looking at a similar cost. The cost is simply too high at a time when Europe cannot afford it.”

There are other encouraging signs that European leaders may be reviewing the effectiveness of environmental measures, such as propping up carbon prices, and their impact on energy poverty. Last week, the European Commissioner for Energy, Gunther Oettinger, made the point that the cost of energy needed to be given greater weight when setting EU energy policy and that the bloc needed to be more pragmatic about initiatives to reduce its greenhouse gas emissions.

“Both the vote this week and the comments by Commissioner Oettinger are welcome news. For too long, European governments have seemed unwilling to measure the impact of environmental policies, not only in contributing to a reduction in global emissions but also their economic impact. Common sense and a more balanced approach to policy may finally be prevailing”.

-ENDS-

Notes

The World Coal Association was founded in 1985 and has been working on behalf of the global coal industry for almost 30 years. WCA’s Members comprise the world’s major international coal producers and stakeholders. Membership is open to companies and not-for-profit organisations from anywhere in the world. The WCA provides a voice for coal in international environment and energy forums, presenting the case for coal to key stakeholders worldwide.

For further information, please contact:

Katie Warrick, Communications Director
kwarrick@worldcoal.org
t: +44 (0) 20 7851 0052

Vanessa Sobun-Springham, Communications Manager
vsobun-springham@worldcoal.org
t: +44 (0) 20 7851 0052

April 17, 2013 | Categories: Climate change, Energy access, WCA

Cornerstone

Cornerstone

The World Coal Association has launched a new, quarterly publication, Cornerstone. Sponsored by Shenhua Group, Cornerstone is the official publication of the world coal industry and its aim is to address the key issues facing the energy community in the areas of environmental challenges, sustainable development and technological innovations, amongst others.

Highlights from Volume 1, Issue 1 include:

  • Letter from the Chairman – Zhang Xiwu, Chairman of the World Coal Association presents the inaugural issue of Cornerstone.
  • Coal’s Role in the Global Energy Mix: Treading Water or Full Steam Ahead? – IEA Chief Economist Fatih Birol looks into the future and sees continued growth in coal-based energy.
  • Minamata Convention on Mercury – What Does It Mean for Coal? WCA Policy Manager Aleksandra Tomczak looks at the Minamata Convention, which has laid the groundwork for a reduction in global mercury emissions.
  • Mission Possible: An Environmentalist Looks at Coal and Climate – Armond Cohen from the Clean Air Task Force discusses why and how coal should be part of the future energy mix.
  • Rethinking CCS – Moving Forward in Times of Uncertainty -Even as some government support wanes, the future of CCS depends on continued support for development. Howard Herzog and Jan Eide from MIT discuss.

Cornerstone is free of charge. If you would like to join the mailing list, email: cornerstone@wiley.com or visit www.cornerstonemag.net

April 10, 2013 | Categories: WCA

The CCS business case needs commercial solutions

Benjamin Sporton, WCA Deputy Chief Executive

Benjamin Sporton, WCA Deputy Chief Executive

This year has started with a lot of talk about the future of carbon capture and storage. One of the key points of discussion at a recent workshop I attended was the need to establish a business case for CCS to help drive its deployment. There are a range policy measures that could be taken to help establish a business case – carbon pricing and feed-in tariffs have been the two main vehicles that get discussed in most European forums, but they’ve both struggled to create any real drive towards CCS deployment and direct funding from government has so far failed to materialise.

CCS is an expensive technology and so it needs real money. Like the support they provide for other low emission technologies, governments should fund CCS projects, but in these austere times that won’t be enough to drive CCS at the scale that’s needed.

That leaves one (often ignored) solution to getting the cash flowing for CCS. For more than 40 years CO2 has been pumped and stored underground as part of enhanced oil recovery (EOR) operations to help improve production at depleted oil fields. At present most of the CO2 used currently comes from natural sources, but project developers often cite insufficient supplies of affordable CO2 as a barrier to increased production. This lack of supply means there is real potential to sell CO2 captured from power plants to improve oil production and help finance the deployment of CCS.

In the United States in particular EOR and CCS projects are beginning to become more common. Earlier this year I visited the coal-fired Plant Barry power station in Alabama where CO2 is being captured and piped to the nearby Citronelle oil field as part of an EOR project.  The National Enhanced Oil Recovery Initiative has also proposed a scheme that would in fact be a net financial positive for the US Federal Government should they provide the initial tax incentive to get CCS EOR projects up and running.

Unfortunately though, some see EOR as not being “real CCS” because it’s used for oil production and because historically the stored CO2 hasn’t been monitored. Many newer projects however are monitoring stored CO2 to ensure there is no leakage and more importantly EOR will help deal with some of the other challenges facing large scale deployment of CCS. EOR could also help increase public acceptance of CCS because it demonstrates how the process has been operating safely for decades, it also means that for many projects the regulatory regimes are already well established. Even more importantly developing EOR infrastructure now, such as CO2 pipelines, means it can be used later for CCS in saline formations.

And EOR has real climate mitigation potential. The potential CO2 storage through EOR in the world’s 50 largest oil basins has been assessed at up to 140 Gtonnes with even more potential if smaller fields are brought online. Compare that to the European Emissions Trading Scheme which on current performance is forecast to abate about 2 Gtonnes of CO2 over the next 50 years.

The International Energy Agency will soon be releasing its revised technology roadmap for CCS, amongst the pathways for increasing the uptake of CCS we will hopefully see recognition of the role that EOR can play in making CCS a reality. Last week the IEA’s Coal Industry Advisory Board published a report that included useful material highlighting the potential of EOR to accelerate CCS deployment.

It’s important the IEA heed this advice. EOR isn’t just an American technology, there are pilots in China and the Middle East and there is potential elsewhere. Policy makers should consider it a real option when thinking about how we can begin to accelerate the deployment of CCS.

March 27, 2013 | Categories: WCA

Europe not turning away from coal

The European coal industry met this week at a Coaltrans conference in Katowice, Poland. One message resonated across all discussion panels: Europe is not about to turn away from coal. Far from it.
Poland’s energy strategy includes plans to increase energy production by around 40% through to 2030. In this strategy coal is the backbone of electricity generation. To meet growing energy demand from coal two new underground coal mines are about to be built in the eastern region of Lublin and Polish utilities are considering exploiting new brown coal deposits.
The outlook for coal in Germany, especially brown coal, is also positive. In 2012 power plants running on brown coal generated 13 TWh more than the year before. This increase is understood to be a result of the Government decision to phase out nuclear power, combined with low carbon prices and high natural gas prices. German brown coal producers expect coal-based electricity to be even more sought after when more nuclear plants are taken offline over the coming years.
In the Czech Republic, although coal’s share in the energy mix is expected to go down, coal will remain an important source of base-load energy. Czech Coal, the largest coal producing company in the Czech Republic, has just signed another long-term contract which means that it will continue brown coal production over the next few decades.
However, coal is in a more difficult situation in the UK. In that country, coal demand has been steadily declining over the past decade and is set to further decline as more coal plants are forced to close before the end of their operating lifetime due to EU environmental regulations. At the same time, it is close to impossible to replace old coal plants with modern state-of-the-art installations because of the UK Government decision to make CCS compulsory on all new coal-fired power plants (but not gas-fired plants).
But even in the UK where the current Government is determined to get rid of coal, the looming risk of blackouts brings back voices of support for affordable base-load power generation. In fact, although many of the UK coal plants were intended for closure before the end of March this year, Government officials are now consider extending their lifetime.
Even in Europe coal is still a key energy resource providing reliable and affordable base-load electricity.  Day-by-day decisions within the energy sector in Europe prove that unavoidable decline or phase out of coal remains in the sphere of rhetoric, not reality.

Aleksandra Tomczak, WCA Policy Manager

Aleksandra Tomczak, WCA Policy Manager

The European coal industry met this week at a Coaltrans conference in Katowice, Poland. One message resonated across all discussion panels: Europe is not about to turn away from coal. Far from it.

Poland’s energy strategy includes plans to increase energy production by around 40% through to 2030. In this strategy coal is the backbone of electricity generation. To meet growing energy demand from coal two new underground coal mines are about to be built in the eastern region of Lublin and Polish utilities are considering exploiting new brown coal deposits.

The outlook for coal in Germany, especially brown coal, is also positive. In 2012 power plants running on brown coal generated 13 TWh more than the year before. This increase is understood to be a result of the Government decision to phase out nuclear power, combined with low carbon prices and high natural gas prices. German brown coal producers expect coal-based electricity to be even more sought after when more nuclear plants are taken offline over the coming years.

In the Czech Republic, although coal’s share in the energy mix is expected to go down, coal will remain an important source of base-load energy. Czech Coal, the largest coal producing company in the Czech Republic, has just signed another long-term contract which means that it will continue brown coal production over the next few decades.

However, coal is in a more difficult situation in the UK. In that country, coal demand has been steadily declining over the past decade and is set to further decline as more coal plants are forced to close before the end of their operating lifetime due to EU environmental regulations. At the same time, it is close to impossible to replace old coal plants with modern state-of-the-art installations because of the UK Government decision to make CCS compulsory on all new coal-fired power plants (but not gas-fired plants).

But even in the UK where the current Government is determined to get rid of coal, the looming risk of blackouts brings back voices of support for affordable base-load power generation. In fact, although many of the UK coal plants were intended for closure before the end of March this year, Government officials are now consider extending their lifetime.

Even in Europe coal is still a key energy resource providing reliable and affordable base-load electricity.  Day-by-day decisions within the energy sector in Europe prove that unavoidable decline or phase out of coal remains in the sphere of rhetoric, not reality.

March 22, 2013 | Categories: WCA

HEAL report – absurd recommendations based on biased analysis

Aleksandra Tomczak, WCA Policy Manager

Aleksandra Tomczak, WCA Policy Manager

HEAL report on “How coal plants make us sick” makes absurd recommendations based on biased analysis. The report says that 18,200 premature deaths in Europe are caused from air pollution from coal plants every year.  What it doesn’t say is that this is only 3.7% of the total 492,000 estimated premature deaths in Europe due to outdoor air pollution.
I find it astonishing that an NGO concerned with air quality should focus on a sector which represents 3.7% of the problem. It is even more astonishing if you think that this was their first report in 2013 – the year of Air Quality, as announced by the European Commissioner for Environment.
But clearly HEAL is not very bothered about coal being only a fraction of the air pollution problem as the report recommends a moratorium on coal plants and a phase out of existing coal plants by 2040.
This recommendation is absurd for two reasons.
Coal-based power generation, as with any form of industrial activity has its negative AND positive externalities. In the case of coal it is always the negative externalities that get traction among the NGO community and those have been scrutinised on a number of occasions. However, there are also positive externalities related to coal’s relative affordability as an energy fuel and the affordability of coal combustion technologies. A proof for that is the fact that coal is the fastest growing fuel worldwide, especially among developing countries.
In relation to this, I wonder if the authors of the report have looked at the number of deaths in Europe due to unaffordable energy for heating during winter. In just England and Wales, 27,000 people die each year because of cold temperatures and 10% of this is directly attributed to fuel poverty. Extrapolating these figures to the EU level, well over 20,000 people could be dying because of unaffordable fuel every year in Europe. And this is a VERY conservative estimate. Bjorn Lomborg assesses that around 1,5 million people could be dying prematurely each year because of cold. Clearly, an energy fuel with the lowest nominal cost has a vital role to play in Europe’s energy mix, keeping prices low for consumers.
The recommendation to phase out coal is also absurd because it totally ignores the technology potential to reduce unwanted emissions from coal plants, including via the deployment of pollution control technologies, efficiency improvements at coal plants and the deployment of CCS. The report dismisses high-efficiency low-emission coal technologies by saying that in a 46% efficient plant over half of the energy input is never converted into energy. Is the same criteria applied to gas plants which convert only 60% of gas into energy? or to solar panels which convert only 5% to 19% of solar energy into electric energy in the 15% of time they can actually work?
The report also makes quick assumptions about the risks behind CCS technology without quoting any scientific data, statistics or legal frameworks that are being introduced to ensure that storing CO2 is safe.
This report does not bring any meaningful recommendations. It is a lost opportunity for the Health and Environment Alliance to make realistic, informed and weighted proposals on how to improve the environmental footprint of coal plants. And most importantly, it is a missed opportunity to address the real major sources of the outdoor air pollution problem.

The HEAL report says that 18,200 premature deaths in Europe are caused from air pollution from coal plants every year.  What it doesn’t say is that this is only 3.7% of the total 492,000 estimated premature deaths in Europe due to outdoor air pollution.

I find it astonishing that an NGO concerned with air quality should focus on a sector which represents 3.7% of the problem. It is even more astonishing if you think that this was their first report in 2013 – the year of Air Quality, as announced by the European Commissioner for Environment.

But clearly HEAL is not very bothered about coal being only a fraction of the air pollution problem as the report recommends a moratorium on coal plants and a phase out of existing coal plants by 2040.

This recommendation is absurd for two reasons.

Coal-based power generation, as with any form of industrial activity has its negative AND positive externalities. In the case of coal it is always the negative externalities that get traction among the NGO community and those have been scrutinised on a number of occasions. However, there are also positive externalities related to coal’s relative affordability as an energy fuel and the affordability of coal combustion technologies. A proof for that is the fact that coal is the fastest growing fuel worldwide, especially among developing countries.

In relation to this, I wonder if the authors of the report have looked at the number of deaths in Europe due to unaffordable energy for heating during winter. In just England and Wales, 27,000 people die each year because of cold temperatures and 10% of this is directly attributed to fuel poverty. Extrapolating these figures to the EU level, well over 20,000 people could be dying because of unaffordable fuel every year in Europe. And this is a VERY conservative estimate. Bjorn Lomborg assesses that around 1.5 million people could be dying prematurely each year because of cold. Clearly, an energy fuel with the lowest nominal cost has a vital role to play in Europe’s energy mix, keeping prices low for consumers.

The recommendation to phase out coal is also absurd because it totally ignores the technology potential to reduce unwanted emissions from coal plants, including via the deployment of pollution control technologies, efficiency improvements at coal plants and the deployment of CCS. The report dismisses high-efficiency low-emission coal technologies by saying that in a 46% efficient plant over half of the energy input is never converted into energy. Is the same criteria applied to gas plants which convert only 60% of gas into energy? or to solar panels which convert only 5% to 19% of solar energy into electric energy in the 15% of time they can actually work?

The report also makes quick assumptions about the risks behind CCS technology without quoting any scientific data, statistics or legal frameworks that are being introduced to ensure that storing CO2 is safe.

This report does not bring any meaningful recommendations. It is a lost opportunity for the Health and Environment Alliance to make realistic, informed and weighted proposals on how to improve the environmental footprint of coal plants. And most importantly, it is a missed opportunity to address the real major sources of the outdoor air pollution problem.

March 15, 2013 | Categories: Climate change, Energy access, WCA

Peabody Energy and WCA Present a Letter To Mayor Bloomberg Outlining Unmatched Growth and Benefits of Coal

Below is an advert posted in the New York Times (Sunday 10 March), responding to Mayor Bloomberg’s public comments this month that coal is a “dead man walking”.

Letter to Mayor Bloomberg

March 11, 2013 | Categories: WCA
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