Clean coal and energy security by tps10097

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									Clean coal and energy security


Pierre Noël     p.noel@jbs.cam.ac.uk



Cambridge Energy Conference, 24th June 2008
“All of the above” – Plus coal?
World coal consumption is rising more
rapidly than world energy consumption
    150

    140

    130

    120

                                                                   Coal consumption
    110

    100                                                            Primary energy
                                                                   consumption
    90

    80

    70

    60
          1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Why “clean coal & energy security”?
 • Clean coal is not more “secure” than dirty coal – Why
   linking clean coal to energy security?
 • By “energy security” most people mean “energy
   independence” -- minimising imports, or at least
   importing from ‘friendly’ countries
 • Coal is abundant in large and growing energy
   economies (US, China, India…)
 • But at the same time coal is very carbon-intensive
 • The question people have in mind is:
    – Can clean coal reconcile climate policies and the desire
      for greater “energy independence”?
Coal reserves are near energy consumption
centres – unlike oil and gas

                                  70.0%


                                  60.0%
     Regional share of reserves




                                  50.0%                                                           energy cons v. coal
                                                                                                  reserves
                                                                                                  energy cons v. oil reserves
                                  40.0%

                                                                                                  energy cons v. gas
                                  30.0%                                                           reserves

                                  20.0%


                                  10.0%


                                  0.0%
                                          0%      10%     20%     30%    40%     50%    60%
                                               Regional share of world energy consumption   Source: BP Statistical Review of World Energy
Coal is still the cheapest of fossil fuels




 $/GJ




        Chart prepared by Tera Allas (BEER) - Source: Platts, Heren
Economic growth, not “energy security”, is
driving coal consumption
 • Coal prices have risen sharply since 2005 -- but coal is
   still much cheaper than oil and gas (per BTU)
 • Coal remains (or has become again) the most
   attractive option to generate electricity – when the
   price of carbon is zero
 • Acceleration of coal consumption growth is largely
   an emerging economies phenomenon (including
   China)
 • China’s oil imports are booming; China seeks to
   expand its gas imports – the coal boom is not driven by
   energy security but consumption growth
Countries driving energy demand growth are
very coal-intensive
                            Coal in world energy demand growth (2000-07)

       TOTAL
       WORLD

              EU                                                       country contribution to
                                                                       global energy demand
                                                                       growth
              US

    EMEs excl.                                                         coal growth / energy
      FSU                                                              growth

           India

          China

                   0%         20%         40%       60%   80%   100%
    Source: BP Statistical Review of World Energy
Growth in power generation is increasingly
concentrated in emerging economies – China
alone is 50% of world total since 2005
                             OECD                 of which EU
            4000.0           Non-OECD, excl FSU   of which China
                             TOTAL WORLD
            3500.0

            3000.0

            2500.0
      TWh




            2000.0

            1500.0

            1000.0

             500.0

               0.0

                     90-95             95-00                       00-06
Coal consumption growth shows the same
pattern – EMEs almost 100% of world growth,
China 60-70%
                                        OECD                 of which EU
             800.0                      Non-OECD, excl FSU   of which China
             700.0                      TOTAL WORLD

             600.0
             500.0
             400.0
      Mtoe




             300.0
             200.0
             100.0
                0.0
             -100.0
             -200.0

                                65-75          75-85            85-95         95-06
      Source: BP Statistical Review
Conclusions
 • Not clear that “energy security”
   will be a driver of coal consumption
   growth – the key is the relative
   economics of fossil fuels (and nuclear)
   to generate electricity
 • Structural change in oil & gas
   markets ensure an even brighter
   future for coal
 • What clean coal will contribute to
   reconcile is energy consumption
   growth and climate policies

								
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