TRADITIONAL ENERGY NEWS
China’s Clean Energy Future Depends on Coal
success or failure of China’s $736 billion plan to invest in
solar, wind, biofuel and nuclear energy is likely to depend onone thing
the price of coal.
Supplying 80% of all electricity for its growing economy, China is
the world’s #1 coal user.
It constructs, on average,
one newcoal-fired power plant every week.
Switching away from such aplentiful albeit highly polluting resource in favor of clean energytechnologies will be difficult for the economic giant.Also added to the equation are new technology developmentsthat make coal combustion processes cleaner. Calledsupercritical plants, these new generators produceapproximately 15% less carbon dioxide than conventional plantsat a cost of about $500-$600 per kW less than in developedOECD nations.
China has overtaken the U.S. as the world’s top
greenhouse gasemittor, and it
faces tremendous pressure from theinternational community to wean itself off its coal addiction
and get serious about reducing its emissions levels. However,policy and industry analysts warn that if the costs of new energy
technologies are not commensurate with, China’s clean tech
push may fizzle and fail to attract the private sector investmentit needs for long term success, especially as coal becomescleaner.
government must gradually lift fossil fuel prices whilegranting incentives to non-fossil fuels to establish a long-term
said Wang Yi, deputy head of Policy andManagement at the China Academy of Science. Withoutchanges in tariff structures, there would be little incentive forprivate firms to invest. State-run firms would be the only ones
able to operate at a loss as “they are the ones who can afford tolose money,” said Lin Boqiang, head of Center of Research on
Energy Economics at Xiam
en University. “The private sectorcan’t afford waiting around for 5 to 10 years operating at a loss.”
Price of coal important in Chinese clean energy development
With 32 New Plants, U.S. Coal IndustryExperiences Largest Growth in 20 Years
The U.S. coal industry has experienced its largest expansion inover twenty years.
Since 2008, thirty-two new coal-firedpower plants have been built or are currently underconstruction
in the United States.All together, these coal plants will generate approximately17,900 MW of electricity - enough to power 15.6 millionhomes, or roughly the combined number of homes inCalifornia and Arizona. They will also
emit about 125 milliontons of greenhouse gases every year - the equivalent of adding 22
million vehicles to the nation’s roadways.
Public awareness of the social and environmental costs of fossil fuels has increased after the BP oil spill and the tragiccoal mine accident in West Virginia. However, this publicsentiment has not translated into legislation which woulddissuade the coal industry from expanding. On the contrary,the failure of U.S. lawmakers to enact tough carbon emissionslegislation has kept the industry comfortable in the status quo.As Severin Borenstein, director of the Energy Institute at UC-Berkeley says,
“Building a coal
-fired power plant today isbetting that we are not going to put a serious financial cost
on emitting carbon dioxide.”
Despite the Obama administration’s dedication of $3.4 billion
in stimulus funds
to “clean coal” research,
none of the thirty-two new plants incorporate this experimental technology
,which filters out carbon before it can be released into theatmosphere. New investments in traditional coal plants, onthe other hand, amount to more than $35 billion.
Strategic Location May Propel Indonesia to
World’s Largest Exporter of Coal
To satisfy growing demand, energy-hungry nations such as
China and India have begun looking to their southernneighbor Indonesia as important source of thermal coal.
Desperate for foreign investment to help achieve majorinfrastructure overhauls, Indonesia is a willing partner and hasrecently signed blockbuster deals with its energy-hungrypartners.
Indonesian production levels are predicted to risenearly 90% to 480 million tons by 2020.
Indonesia has set a target of attracting $160 billion in foreigninvestment over the next few years.
China and India have
agreed to finance billions of dollars worth of Indonesianinfrastructure projects
- including railways, road, ports andbridges
in exchange for coal.The nature of the agreements is similar to the controversial
infrastructure” deals China has entered acrossAfrica to secure access to that continent’s resources.