The UK broke new ground on Friday 21 April 2017 seeing the first continuous 24-hour period since the industrial revolution when coal made no contribution to the power sector. The country which led the way in the introduction of coal for electricity generation with the opening of Thomas Edison’s Holborn Viaduct power station in London in 1882, is now blazing a similar trail for its abandonment.

Many countries have announced policies aimed at reducing and even phasing out entirely their coal-fired power sector, so does this mean that electricity from coal is soon to be a thing of the past?

Current global trends in coal-fired electricity generation

In late 2016 global renewable energy capacity overtook coal to become the world’s largest installed power source, due to a surge in solar panel installations. According to the International Energy Agency, 153 GW of renewable power capacity – more than the total generation capacity of Canada – was installed in 2015. IEA figures show that worldwide renewable capacity reached 1,985 GW, or about 31% of global power capacity, ahead of coal-fired power, which stands at 1,951 GW.

The IEA expects this trend to continue:

“Growth is anticipated to be increasingly concentrated in emerging and developing economies, with Asia taking the centre stage. In the next five years, the People’s Republic of China and India alone will account for almost half of global renewable capacity additions. We are witnessing a transformation of global power markets led by renewables and, as is the case with other fields, the centre of gravity for renewable growth is moving to emerging markets.”

However, the actual amount of electricity generated by coal (40% of the global total) remains significantly higher than that produced from renewable sources (23%) due to the intermittency of renewable power generation.

Alongside the addition of renewable generation, many countries are seeing the closure of their coal power stations. In the GB market, just 9% of electricity generation in 2016 came from coal, with coal plants either closing or converting to biomass use. By 2025 all Britain’s coal stations will have been forced to close under government de-carbonisation plans, although many are closing ahead of schedule as low wholesale power prices have steadily eroded their economics.

More broadly in the EU, the share of coal in the generation mix is falling. Data from 2014 indicates that renewable sources made the largest contribution to EU power generation at 28.2%, followed by nuclear (27.5%) and coal (25.3%).

coal generation data

Analysis of coal consumption from the IEA shows that the share of electricity and heat produced from primary coal in OECD countries fell to a new low of 29.3% in 2015, down from 31.5% in 2013 and 44.3% in 1985. Within the OECD regions coal use has followed different trends:

  • in OECD Europe coal use declined to 24.2% in 2014 from 49.1% in 1971;
  • in OECD Americas it grew from 41.0% in 1971 to 49.8% in 1988 before gradually declining to 41.9% in 2008, and then falling sharply to 29.4% in 2014;
  • in OECD Asia Oceania, generation from coal rose from 18.0% in 1979 to 24.3% in 1985, the growing to 34.9% in 2001, and 39.8% in 2014.

Carbon capture and storage continues to be a pipe dream

Last year I wrote about the high ambitions but so far disappointing outcomes for CCS technology. Most climate policies assume that some form of CCS will exist in order to achieve carbon-neutrality goals, however, so far CCS projects other than those used for enhanced oil recovery, have struggled to be viable.

In September last year the Oxburgh report into CCS in the UK was published with a strong endorsement of CCS, concluding that:

  • CCS is crucial for the UK to meet climate obligations at lowest cost;
  • CCS and be deployed quickly and at scale in the UK;
  • CCS is economical.

“Previous third party analysis by the CCS Cost Reduction Taskforce and for the Committee on Climate Change as well as analysis performed for this report show fullchain CCS costs at c.£85/MWh under the right circumstances. This report concludes that, under the right conditions as set out in this report, even the first CCS projects can compete on price with other forms of clean electricity.”

Note the repeated references to the “right circumstances/right conditions”.

This all sounds very encouraging, but reading the text of the report gives a strong impression that the conclusions are reached by based on firstly a perceived need to drastically reduce carbon emissions and secondly a belief that this cannot be achieved through other means, particularly for heating and industrial applications.

The section on industrial CCS begins with the statement: “CCS is essential to the decarbonisation of industry,” which can be translated as “We cannot conceive of a way in which to alter industrial processes to reduce carbon emissions and therefore we must find a way to neutralise these by capturing and storing them.” That does not mean that CCS is either technologically feasible or economically viable.

The report goes on to say:

“Given the established nature of CCS component technologies and supply chains, CCS can be delivered cost effectively from the first project depending on three critical drivers for cost: effective competition, scale and cost of capital.”

If this is the case, then one has to question why CCS projects are not already up and running, delivering value to their sponsors? As this blog post explains, aside from the use of CCS for enhanced oil recovery, there is only one large-scale commercial CCS project running worldwide at Boundary Dam on the US-Canadian border, and it is not a success. (And the use of CCS for enhanced oil recovery is somewhat questionable as in the first instance about a quarter of the CO2 injected into the reservoir dissolves in the oil and finds its way back into the atmosphere, and the oil is burned or otherwise processed in ways which release further carbon emissions – hardly an environmental boon.)

While I disagree with the blog’s author in terms of the solar + storage alternative, the calculations regarding the Boundary Dam project are instructive.

The Oxburgh report goes on to recommend that he government creates a state-owned CCS Delivery Company with a £200 – 300 million investment fund to promote CCS projects, including providing CfDs for CCS at £85 / MWh, a level designed to be similar to or lower than the incentives required for offshore wind and nuclear. Based on DECC’s long-term power price forecasts of £65 /MWh, this equates to a £20 / MWh subsidy for CCS use in electricity generation.

The report displays a strange cognitive dissonance, suggesting that CCS is technologically straightforward with no barriers to immediate deployment, and that relatively modest subsidies would be needed. Yet at the same time, despite more than a decade of research into the subject, it is acknowledged that there are no commercial benefits to CCS absent government support. The US experience is held up as being positive:

“The USA has used the Federal Department of Energy to allocate hundreds of millions of dollars per year over 15 years into a technology development and pull-though programme focused on achieving commercial deployment. This has successfully enacted a 3 stage technology development programme, which has also been funded with $3.4 billion from the Recovery Act of 2009 to develop a small number of commercial sized 1mt CO2/yr pilot injection sites which are currently operating.”

In other words, after 15 years and over US$ 3 billion dollars the result to date is a handful of pilot projects.

Could cleaner coal technologies be the answer?

Coal power stations are traditionally seen as dirty, inefficient monsters, and aside from CCS, there is little discussion outside the immediate sector, about clean coal technology, to the extent that most people would assume it was an oxymoron. However, coal is an abundant resource, and an extensive infrastructure for generating electricity from coal already exists, so what are the prospects for clean coal technologies?

Traditional coal power stations have efficiency levels in the 33-40% range, which compares unfavourably with CCGTs which can generally achieve between 50 and 60% efficiency levels. In a typical coal-fired power station, pulverised coal is fed into a giant industrial furnace surrounded by boiler tubes filled with water. The burning coal heats the water to create steam, which is transferred at high-pressure to turbines linked to a generator. As the generator spins, electrons are generated that are stepped up in voltage by transformers, while the turbine steam is condensed back into water and returned to the boiler for reheating.

USC coal generation

In supercritical and ultra-supercritical steam (USC) power plants, the temperature and pressure in the boiler heat the water so that it becomes a ‘supercritical’ fluid that exhibits properties of liquid and gas phases. In this state, the supercritical steam produced is much more efficient at driving the plant’s turbines – recent research suggests up to 50% efficiencies may be possible.

An alternative to achieving efficiency improvements over conventional pulverised coal-fired power stations is through the use of gasification technology. Integrated Gasification Combined Cycle plants use a gasifier to convert coal (or other carbon-based materials) to syngas, which drives a combined cycle turbine, and can achieve efficiencies of 40-45%.

These technologies result in lower carbon dioxide emissions, and also reduced levels of nitrogen oxides, sulphur dioxide and particulate matter.

However, as much as these developments are making coal more attractive, CCGT technology has not stood still. Last year EDF opened a new gas-fired power station at Bouchain in France using GE technology with a nameplate efficiency of over 62%. This plant also benefits from a high degree of flexibility, being able to reach full power in under 30 minutes.

Much has been made recently about Donald Trump’s plans to boost the US coal industry, but the troubles of the US coal industry have been driven more by economic factors than environmental ones. The rapid development of the shale gas sector has seen US gas prices fall significantly, pushing coal out of the merit order for electricity generation.

Despite this political support, and the advent of cleaner coal technologies, it is difficult to see the coal decline reversing. CCS still doesn’t appear to be viable so it seems likely that there will be more headlines about coal free days.


Update on 30 June 2017

This week Southern Co. has announced  it is immediately suspending start-up and operations activities on the gasifier units of its Kemper County power plant. The 582 MW IGCC plant was designed to convert locally-mined lignite into a synthetic gas and to capture and store 65% of its carbon emissions. The plant was intended to be a flagship demonstration for both CCS and coal gasification technologies, providing hope for the future of coal generation.

However significant cost overruns and construction delays led Mississippi regulators to instruct the utility to draw up plans for the plant to run solely on natural gas, prompting Southern’s decision. Shareholders have already lost US$3.1 billion on the project and the utility could face up to US$ 3.4 billion more unless an agreement on the plants outstanding costs can be reached with regulators.  

The project was plagued by problems from the outset, with costs far exceeding the initial US$ 1.8 billion estimate…latest projections put the total cost at over US$ 7 billion, although a regulatory decision limited the costs to consumers at US$ 2.8 billion.

The problems seem to be primarily with the gasification unit which has never managed to run reliably – a 2017 report by the Mississippi Public Service Commission found eight key technological milestones were missed. Other problems relate to allegations of poor project management and misleading cost and production schedules. The advent of shale gas since the inception of the project also served to threaten its economics.

The future for coal-based CCS looks bleak – as the Kemper County and Boundary Dam projects have shown – the economics just don’t add up.

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