With China and India Ravenous for Energy, Coal’s Future Seems Assured – by Peter Galuszka (New York Times – November 12, 2012)

http://www.nytimes.com/

RICHMOND, Va. — Last summer, nearly half of India’s sweltering population suddenly found the electricity shut off. Air-conditioners whirred to a stop. Refrigerators ceased cooling. The culprits were outmoded power generation stations and a creaky electricity transmission grid.

But another problem stood out. India relies on coal for 55 percent of its electric power and struggles to keep enough on hand.

Coal remains a critical component of the world’s energy supply despite its bad image. In China, demand for coal in 2010 resulted in a traffic jam 75 miles long caused by more than 10,000 trucks carrying supplies from Inner Mongolia. India is increasing coal imports.

So is Europe, as it takes advantage of lower coal prices in the United States. Higher-priced natural gas on the Continent is creating demand for more coal imports from the United States, where coal is taking a drubbing from less expensive natural gas.

Coal may seem an odd contender in a world where promising renewable energy sources like solar, wind and hydroelectric power are attracting attention. Anathema to environmentalists because it creates so much pollution, coal still has the undeniable advantages of being widely available and easy to ship and burn.

The biggest attraction, however, is low cost. By many estimates, including that of Li Junfeng, longtime director general of the National Development and Reform Commission of China, burning coal still costs about one-third as much as using renewable energy like wind or solar.

Coal is not subject to the vagaries of windless or sunless days, and can easily meet base-load demands of electricity consumers without interruption. So can nuclear power, but the nuclear industry is still reeling from the March 2011 disaster at the Fukushima Daiichi power plant in Japan. Countries like Germany have turned away from nuclear reactors.

Global demand for coal is expected to grow to 8.9 billion tons by 2016 from 7.9 billion tons this year, with the bulk of new demand — about 700 million tons — coming from China, according to a Peabody Energy study. China is expected to add 240 gigawatts, the equivalent of adding about 160 new coal-fired plants to the 620 operating now, within four years. During that period, India will add an additional 70 gigawatts through more than 46 plants.

“If you poke your head outside of the U.S., coal-fired plants are being built left and right,” said William L. Burns, an energy analyst with Johnson Rice in New Orleans. “Coal is still the cheapest fuel source.”

Besides strong demand for thermal coal, which is burned in power plants, use of metallurgical coal or coking coal, used in blast furnaces, is also expected to more than double in China, to about 1.7 billion metric tons by 2016, as the country’s steel mills churn out more steel for automobiles, skyscrapers and export goods, the Peabody study says.

Coking coal will be increasingly in demand in other steel centers like Brazil and India, pushing coal companies to scrounge for new reserves in places like Botswana, Mongolia and Mozambique.

For the rest of this article, please go to the New York Times website: http://www.nytimes.com/2012/11/13/business/energy-environment/china-leads-the-way-as-demand-for-coal-surges-worldwide.html?_r=0

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