ODI – The coal industry argues that more efficient and less polluting ‘advanced coal’ will help reduce carbon emissions and other pollution. What we can’t forget, ahead of next week’s World Coal Association meeting and OECD talks on coal policy, is that there are cheaper and cleaner options.
Burning coal generates about 40% of fossil fuel emissions. Current G7 and Chinese plants, alongside a dramatic expansion of coal power planned in the developing world, stand to blow our carbon budget.
To address this threat, the coal industry proposes replacing the most polluting coal technologies with advanced ‘high-efficiency, low emissions’ coal technologies. It claims that this will reduce emissions enough to keep global mean temperature under two degrees while taking advantage of coal as a cheap energy source.
Some also advocate that ‘climate finance’ should cover the price mark-up from conventional to advanced coal. For this to make sense, advanced coal would either need to be cleaner or cheaper than the alternatives – it is neither.
Advanced coal pollutes far more than alternatives
Decades of research, development and innovation has tremendously advanced the thermal efficiency of burning a lump of coal to make electricity, from 30% to up to 50%. Increased efficiency means advanced coal can produce 40% less CO2 than conventional plants.
This is impressive, but it’s not enough. Even the most advanced coal plant produces around 30 times more CO2 than wind and hydro, twenty times more than solar and geothermal, and 50% more than natural gas.
It’s a similar story for other air pollutants. Dirty power (mostly coal) is responsible for 465,000 deaths per year. This could be reduced with mandatory ‘scrubbers’ to remove air pollutants at the plant, but at additional cost.
Compare this to air pollution from most renewables, which is essentially zero.
Advanced coal is more expensive than its cleaner competitors
In the US, the Energy Information Administration (EIA) calculates that on average, electricity produced by conventional coal-fired power is more expensive than onshore wind, geothermal or natural gas. Advanced coal technology becomes uneconomic against unsubsidised solar power. These conclusions hold up even if you exclude the $15 per-tonne carbon price the EIA factors into its coal calculations.
The US is actually one of the cheapest places to build an advanced coal-fired power plant. Domestic coal is high-quality and plentiful, capital is easily available, and cost estimates are based on running plants – and generating income – 85% of the year.
Outside of the US, the economics of coal power are often worse. Coal is usually more expensive (especially when imported), lower quality (thus less efficient and more polluting); and globally, coal plants run closer to 60% of the time on average.
A good case in point is South Africa. For years it has relied on its substantial coal reserves for energy, but the economics of coal have changed rapidly. Electricity from the huge new (4.8 gigawatt) Medupi advanced coal plant will cost double original estimates – more than the electricity from the 2GW of onshore wind the country has just procured.
Coal becomes even less economic as carbon prices rise or if the health burdens of air and water pollution are factored in. Outside the US the relative cost of electricity from advanced coal is likely to be even less competitive with other power sources.
A massive expansion of conventional coal isn’t compatible with climate sanity. Even the coal industry agrees. But likewise, a future powered by advanced coal is already more expensive than lower-carbon alternatives.
Perhaps the industry’s pitch is just a search for new subsidies, to go with the billions of dollars it already receives. The mark-up isn’t worth it: there are cheaper, cleaner alternatives