The coal industry will thrive
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There are good prospects for a coal industry that remains efficient despite the economic crisis linked to the COVID pandemic and the announced transition to carbon-free energy sources, Russia’s Deputy Energy Minister Anatoly Yanovsky said.

“Modern, high-efficiency, environmentally clean coal generation is 1.3 times cheaper than wind and 1.9 times cheaper than solar generation,” Yanovsky told the newspaper Rossiiskaya Gazeta.

     “It is therefore absolutely clear that there will be a place for coal in the developing ‘clean energy’ scenario. ‘Clean’ coal generation already has significant competitive advantages in terms of the cost of producing power and heat compared to renewable technology.

    According to 2019 data from the Minerals Council of Australia, the full cost of generation for a power station based on hard coal stands at $67-91 per Mwh, compared to $64-91/MWh for a gas combined cycle plant and $75-88/MWh for brown coal. Comparable figures are $85-121/MWh for wind power generation and $118-172 MWh for solar photovoltaic.

    Coal enjoys other advantages as an energy resource.

    Coal deposits are distributed equally throughout the world, exploitation of coal deposits does not involve major capital expenditure, its transport does not pose specific conditions and can use either road or rail. Coal markets are stable and predictable – unlike oil markets. Using coal in the energy balance increases energy security and reliability of supply. And in the absence of storage facilities for power and heat, only gas or coal generation is able to ensure effective regulatory functions.

    In addition, economically effective “clean technologies” can now be applied to the coal industry now and in the use of coal in the petrochemicals industry. Coal deep processing is being developed in China, the United States, Germany, Japan, South Africa, Poland and other countries. where dozens of different goods are produced from coal with high added value.

    Coal markets will therefore undergo growth particularly in the Asia-Pacific region and in India and other developing countries. More than 1,000 coal-fired power stations are to be built in China, India and Vietnam – operating on the principle of HELE (High efficiency, low emissions). Asia-Pacific countries all told are building and plan to bring on stream more than 200 GW of coal-fired generation capacity. Japan and South Korea, with no coal of their own, continue to support the industry through imports and by maintaining a proportion of coal in their energy balance of 26-29 %.

    In Europe, despite plans for a transition to a carbon-free economy by 2050, the situation with coal-fired generation is far from clear. In Germany, one of the leaders of the “energy transition”, plans call for about 15 coal-fired power stations with a capacity of nearly 20 GW to remain in operation beyond 2030.

    Discussions continue in a string of European countries about any decision to abandon coal-fired generation and the consequences it would entail. In a number of countries, such questions are not even under discussion, among them Poland, Romania, Slovenia, Croatia and Bulgaria.

    In Poland, which accounts for more than a fifth of coal consumption in Europe, efforts are being made to keep the state oil company PGG in operation up until 2049 – along with government support.

    Deputy Energy Ministry Yanovsky said Russian coal exports would dip 5-6 % on world markets in 2020-2021, but by 2022 an increase in exports is expected. Shipments would head to both the Asian and European markets.

    “Europe is Russia’s biggest coal export market. Even in the difficulties of 2020, our companies shipped 45 million tonnes of coal to European countries. That’s 20 % of the expected level of exports (208-210 million tonnes),” he told Rossiiskaya Gazeta.

    “As regards China and India, I am absolutely certain that even should there be active environmentalist policies, Russian coal will always be in demand there. Exports of Russian coal to these countries are increasing. Shipments to China in 2020 will total 37 million tonnes compared to 32.9 million tonnes in 2019“.

    “India is boosting its purchases of Russian coal by 6-7%. Future plans call for an increase in exports, particularly in coking coal and high-quality energy coal.

    Deputy Prime Minister Alexander Novak said there had been a sharp increase in European purchases of Russian coal against a background of bitterly cold weather. 

    “They are starting to supply coal-fired power stations. And Russian exports are rising sharply. And while it may have been unfeasible before to ship to Europe, exports there are now resuming,” he told a discussion entitled “The Future of Energy” within the framework of the Gaidar forum. “Right now, during the past few weeks with all the low temperatures.

    Yanovsky said the notion that the coal industry has no place in the future world energy balance is “more likely than not, more a fad than the real state of affairs. 

    “Demand for coal fuel, traditionally seen as a resource closing down, is generally subject to reduced production in a crisis and expanded production when the economy is robust.

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