MAC: Mines and Communities

Coal companies talking rubbish on energy poverty

Published by MAC on 2014-11-08
Source: Climate Spectator (2014-11-07)

University of Queensland attacked for false dara

Correspondents for Australia's Climate Spectator (sister to the respected Business Spectator) have waded in against coal in no uncertain manner.

Three of them maintained in an article pubished last week that: "Coal companies are not, in general, major contributors to energy poverty alleviation efforts. When they do contribute, it is ironically with support for energy sources other than coal.

"Claims that coal use is vital for economic growth and quality of life are not supported by economic data and should be dismissed as coal industry public relations rather than a genuine contribution to alleviating energy poverty".

In October, a fourth correspondent addressed  claims that coal-fired power was superior to that produced by "renewables," in terms of  meeting electricity demand.

Such claims were made in a recent University of Queensland study (see below). But they're dangerously faulty, says Tristan Edis.

They don't  account for the loss of primary energy when coal is burned, in which some two thirds of it vanishes into thin air. (And of course in the form of greenhouse gases).

According to Mr Edis, on the basis of such a calculation, "renewables" suffer no such loss.

Coal companies talking rubbish on energy poverty

Roderick Campbell & Cameron Amos & Andrew Scarlett

Climate Spectator

7 November 2014

The term “energy poverty” refers to people who do not have access to electricity and clean cooking facilities. Globally, 1.3 billion people do not have access to electricity in their houses and 2.6 billion people cook by burning coal, wood and other solid fuels. This has major impacts on people’s health, safety and quality of life.

The coal industry is very vocal in promoting energy poverty and pushing coal as a solution to it. The head of major coal company Peabody Energy describes energy poverty as "the world’s number one human and environmental crisis".

However, what Peabody says and what it does about energy poverty are very different. Although the company contributes to many charitable causes, it does not donate money, staff time, expertise or discounted fuel to any project that directly alleviates energy poverty.

Peabody’s only contribution to energy poverty is maintaining a website and social media page which promotes coal as the solution to the problem.

While Peabody talks about energy poverty, other organisations act. The United Nations, World Bank, governments and non-government organisations are addressing energy poverty through programs relating to electrification, lighting and improving access to cooking facilities, often in partnership with the private sector. The largest program is the United Nations and World Bank ‘Sustainable Energy for All’ initiative which has links with governments in 85 countries.

None of the main energy poverty initiatives promotes the use of coal.

Perhaps because of this, the coal industry does not support any of the main energy poverty initiatives.

Other coal companies regularly echo Peabody’s statements on the importance of addressing energy poverty, however unlike Peabody, some of them do support direct efforts to alleviate energy poverty, such as:

Despite extensive searches and contact with companies and mining lobby groups, we could not find a single example where coal companies have supported coal-powered energy poverty alleviation projects.

The reason that even coal companies do not use coal-fired power to assist with energy poverty alleviation is that it is not economically rational to do so. The cost of other energy sources, including renewables, is now competitive with coal-fired power at a utility scale. More importantly, off-grid and mini-grid initiatives avoid the large upfront costs associated with coal-related infrastructure making them a much better investment for households, communities and governments affected by energy poverty.

In light of this economic reality, many of the claims made by Peabody Energy and other coal industry supporters do not withstand scrutiny:

Claim 1: Coal use drives world economic growth

A regular claim made by the coal industry is that coal use causes economic growth. This claim mistakes correlation with causation. It is not coal that causes economic growth, but economic growth can lead to increased coal use.

In fact coal use has grown much slower than economic growth. If world GDP had grown at the same rate as coal consumption since 1980, today’s world economic output would be almost $US12 trillion lower than it is.

Even the correlation between economic growth and coal use is not as strong as the coal industry claims. Official data sources show that from 1988 to 2002 world coal use was flat while economic growth was strong...

Further analysis of official data shows that developed countries have reduced coal use while economic growth has been unaffected. Developing countries are now the major coal users, but with alternatives becoming cheaper, they are likely to reduce coal use much earlier in their development.

Claim 2: Coal use increases life expectancy and quality of life

Peabody Energy claims that coal use has led to increased life expectancy over the last 1,000 years of human history. Life expectancy and coal use can both be correlated with economic growth, but it is not coal use that causes any increase in life expectancy. On the contrary, coal use is often associated with lower life expectancy due to health impacts of indoor and outdoor air pollution and the global health impacts of climate change.

Increasing electricity use from very low levels contributes to increases in quality of life as measured by the United Nations’ Human Development Index. Once basic electricity access is achieved however, there is little correlation between quality of life and electricity use. For example, Mexico, Brazil and China have similar HDI scores, but have widely differing electricity use per person. In fact, Mexico uses the least electricity per person and has the highest HDI score, while China uses the most electricity with the lowest HDI score...

Claim 3: Coal is getting cleaner

Major improvements in the emissions standards of coal-fired power stations have been achieved in relation to sulphur, nitrogen and particulatepolluti on, which affect human health. Coal-fired power remains, however, a major source of carbon dioxide emissions which cause climate change.

To make serious reductions in coal-fired power greenhouse emissions, carbon capture and storage is required. The capacity for carbon capture and storage is low – only 13 projects are operational worldwide, sequestering only 25 million tonnes of carbon dioxide per year, or less than one-10th of 1 per cent (0.07 per cent) of the world’s total 33,376 million tonnes of emissions each year.

The problems of energy poverty are real and large. Promising solutions are becoming available and many organisations are working to hasten their implementation. Coal companies are not, in general, major contributors to  energy poverty alleviation efforts. When they do contribute, it is ironically with support for energy sources other than coal. Claims that coal use is vital for economic growth and quality of life are not supported by economic data and should be dismissed as coal industry public relations rather than a genuine contribution to alleviating energy poverty.

*This article is an excerpt from the report All Talk, No Action: The coal industry and energy poverty published by The Australia Institute.


Four misleading mistakes about coal vs renewables

Tristan Edis

Climate Spectator

21 October 2014

We’ve published an article today from Keith Orchison [see below] which, it would be fair to say, is intended as a bit of a reality check to renewable energy advocates keen to throw off coal. It certainly does this very well. But in reading it, something didn’t sound quite right with the statistics.

Orchison relied upon data cited by the University of Queensland’s Energy Initiative comparing the growth in coal use versus renewables. The text from the UQ newsletter is below. Now, the thing that sets off alarm bells for me is when people start comparing coal versus renewables and use the two words ‘primary energy’.

But an interesting back-story may be found in the next energy-driven development surge in ASEAN and South Asia. Over the last three years, coal consumption has grown by nearly 25 per cent in India and 22 per cent in ASEAN countries versus just under 20 per cent in China. Though they may be coming from a lower starting point, these countries represent a massive population base ... whose appetite for more energy is only just beginning.

Compare these figures with the combined global increase in nuclear and renewable energy (the near zero-carbon energy options) which was only 7 per cent. In fact, the growth in primary energy from all near zero-carbon energy sources over the past three years globally, was just 30 per cent of the incremental energy from coal in the Asia-Pacific region alone.

So why would alarm bells go off when I see those two words ‘primary energy’, I hear you ask?

Well, if we put aside burning dung and firewood mainly in the developing world, renewable energy use is usually measured in the amount of electricity generated from sources such as hydro, solar and wind whereas coal and other fossil fuels are usually measured in terms of primary energy, which means the raw energy released when you burn the stuff.

This then needs to go through a conversion process to provide us with more useful things such as electricity. In the case of burning coal to produce   electricity, about two-thirds of the raw primary energy is lost as heat to the atmosphere where it provides no useful purpose, leaving just a third as a useful product.

Energy in the form of electricity is a vastly more useful product than raw heat. As an illustration, a typical electric motor sold in Australia will generally convert over 90 per cent of electricity into circular motion. By comparison, your average internal combustion engine in your car will convert about 30 per cent of the energy within the oil into circular motion (there are then countless other losses in translating that into movement of the car).

Uni of Queensland actually didn't manage to get primary energy comparison too badly wrong it turns out, probably overestimating coal's importance by 15% (thanks to BP's assumptions about electricity conversion efficiency). But it's not the only problem with the comparison.

The second thing that got the alarm bells ringing with this particular comparison was the inclusion of nuclear power with renewables and the time period employed for the comparison: 2010 to 2013. Now, 2010 was the year just before the Fukushima nuclear plant explosion. Since that time Japan shut down its nuclear plants and Germany also began phasing down nuclear power.

According to the BP statistical review of energy, all-up nuclear generation dropped 278 TWh between 2010 and 2013. This inadvertently acts to diminish the significance of substantial growth in renewable energy over that time.

...[T]he growth of renewable energy between 2010-2013 – while falling short of coal – isn’t nearly as inconsequential as you might think based on the University of Queensland statement above. It’s actually 58 per cent of the growth in coal consumption once we correct for coal’s conversion losses to electricity. And importantly, this is on a global level across all fuels.

Which brings me to my third concern with the University of Queensland comparison. By considering coal consumption growth purely in the Asia-Pacific, it actually misses the fact that coal consumption declined across the rest of the world between 2010 and 2013. By just looking at Asia-Pacific they actually overstate the growth in coal consumption by 15 per cent.

Of course this still leaves renewables trailing coal. And given the huge existing dominance of coal in our energy supply we aren’t going to get very far in addressing global warming if renewables can’t even outstrip the growth of coal, let alone make coal consumption go down.

However, let’s look just a little bit into the future to 2018. The fourth mistake people tend to make is to fail to recognise the power of an exponential curve - significant annual growth year on year can accumulate to become a very large change a few years into the future, even if it looks small right now...In 2018 adjusting for coal’s conversion efficiency to electricity...indicates that coal’s growth will finally be outstripped by renewables in that year.

This is based on the International Energy Agency forecast that thermal coal consumption will grow at a relatively small average annual rate of 1.7 per cent and hydro will grow at 1.9 per cent, based on current government policies. However, the IEA has been pretty hopeless at forecasting wind and solar uptake, consistently underestimating its growth.

Specialist solar market analysts NPD Solarbuzz have a better track record and they expect 100 gigawatts of solar will be shipped in 2018. In terms of wind, the Global Wind Energy Council foresees 64GW installed. Using BP statistical review data on capacity factors for these two technologies, which are likely to underestimate their power generation in 2018, I’ve converted these capacity installations into power generation.

Of course, this still leaves us a very long way from making meaningful inroads on containing the level of global warming. And coal remains incredibly dominant. University of Queensland's point remains accurate that there is a massive challenge ahead of us.

But it serves to illustrate that by misinterpreting the available data you can be easily misled to underestimate the potential of renewables and overestimate the position of coal.


Clearing the air on the coal debate

Keith Orchison

20 October 2014

Extrapolating the past and present in to the future is risky business. Hopefully, Rhodes scholar Tony Abbott knows this. Critics of his “coal has a big future as well as a big past” statement don’t think so, but the numbers around suggest that their assault on his view is also over the top.

The University of Queensland Energy Initiative, in canvassing the “energy-prosperity-climate dilemma” in its latest newsletter, has some eye-opening data on the current role of coal in global energy use.

Looking at 2013, the obvious starting point is that overall energy consumption worldwide grew 2.3 per cent. Fossil fuels not only accounted for 86.7 per cent of what was used, but three-quarters of last year’s increase.

No-one will be surprised to hear that the growth is dominantly in the non-OECD countries, or that China is still a massive presence in surging energy use. But, as the UQ Energy Initiative points out, the much less heralded story is what is happening in the ASEAN countries and South Asia.

Over the past three years, it says, coal consumption has grown by nearly 25 per cent in India and 22 per cent in ASEAN countries versus just under 20 per cent in China.

“Though they may be coming from a lower starting point, these countries represent a massive population base -- more than 1.25 billion in India and 600 million in the ASEAN nations -- whose appetite for energy is only just beginning.”

The hard truth, as UQ Energy Initiative reports it, is that the combined global increase in zero-emission electricity supply -- from renewable energy and nuclear plants -- was only 7 per cent in these 36 months.

“In fact,” it adds, “the growth in primary energy from all near-zero carbon energy sources over three years globally was just 30 per cent of the incremental energy from coal in the Asia-Pacific region alone.”

Top dog in this, of course, is China, which has added new coal-fired power generation capacity equivalent to or greater than Australia’s total installed capacity every year for 10 years.

In 2013, says UQ, it increased its coal consumption four per cent to 3.7 billion tonnes, roughly half the global consumption of the fuel and more than 10 times Australia’s coal exports.

Professor Chris Greig, director of the university’s Energy Initiative, says fossil fuel use is on the rise despite all the dire warnings about climate change. And it seems that its use will continue to grow.

“As the world avoids strong policy choices and waits for a miracle energy solution that is as reliable and affordable as coal but has no adverse environmental or climate impacts, we need to consider how we prepare for a scenario where a renewable energy transition (or more appropriately, a revolution) doesn’t eventuate,” he argues.

Carbon capture and storage seems to be an important technology in most credible decarbonisation projections. But he asks: what happens if CCS is also not widely deployed because of issues relating to a lack of storage resources, limited public acceptance or techno-economic constraints that simply cannot be overcome?

“If nothing changes, what then?”

Greig says that, if dire IPCC predictions are correct, “we may need to contemplate some rather drastic interventions (‘geo-engineering’) to manipulate the climate”, ranging from using aerosols and cloud seeding to reflect heat away from the atmosphere to ocean fertlisation to absorb carbon dioxide.

These options at present look to be extreme and in some cases absurd, he adds, “but the longer we do nothing about emissions, the more likely such interventions may need to be seriously considered.”

In the context of what Greig is saying, it is interesting to also read the views of Robert Stavins, a member of the IPCC and prominent Harvard professor.

On the Sunday in September when New York was the venue for Ban Ki-Moon’s climate summit and a massive street march, Stavins wrote in a New York Times op-ed that “the reality is that the emerging economies of China, India, Brazil, South Korea, Mexico and South Africa are rapidly putting in place new infrastructure that depends on burning fossil fuels.”

Current cost projections of tackling the problem are high, Stavins adds elsewhere, but, if CCS doesn’t become available, if there isn’t a significant expansion of nuclear energy and the take-up of cleaner sources of energy is insufficient, then you can double the bill.

Meanwhile, he points out, China alone, even while pursuing a goal of a 45 per cent cut in its emissions intensity, plans to add a new 500 megawatt coal-fired power station every 10 days for the next decade.,

He says that a huge part of the solution is a convergence of Chinese and American interests.

All of which puts local sloganeering by politicians, green warriors, street marchers, campus campaigners, the many vested interests and the morally vain in a rather sober light. It raises the question of when Australia will have a fully thought-through, integrated energy policy and an approach to climate change not aimed at the next opinion poll?

Keith Orchison, director of consultancy Coolibah Pty Ltd, publisher of the This is Power blog and editor of OnPower newsletter, was chief executive of two national energy associations from 1980 to 2003. He was made a member of the Order of Australia in 2004 for services to the energy industry.

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