Letters

VOLUME 2, ISSUE 2

An Analysis of the Interdependence Between China’s Economy and Coal

The authors of this article analyzed the contribution of coal to China’s economy based on several metrics. Much-needed proof was provided regarding the value coal can provide. China has become the world’s second largest economy, continuing to grow at full steam, and is also the largest coal producer and consumer. The country’s economic growth and its reliance on coal are not unrelated as coal has contributed tremendously to China’s development. This article provides an understanding as to why developing countries continue to rely on coal as a leading energy source. Those that undermine the value of the coal industry may do well to consider the information presented in this article.

After an analysis of the correlation between historical economic data and coal production and consumption, the authors calculated a positive correlation coefficient. The core of their analysis was the coal-dependence index that they defined using four indices, which ultimately explained the interdependency of coal and China’s GDP. As we know, coal provides more than 70% of total primary energy consumption and more than 70% of total power output in China. The authors demonstrated how coal is an irreplaceable energy source that helps ensure energy security, maintain social stability, and promote the development of national and local economies.

From a global perspective, the relationship between coal and economics remains strong. Although the global coal industry is facing a downward trend, characterized by lower coal prices, I continue to believe that the perspective of the coal industry should be based on the fact that coal consumption will continue to grow, especially in developing countries. Drawing from the data in this article, I hope that the global coal industry will face the future with optimism and extend its work to realize the cleaner utilization of coal resources for the benefit of all.

Zhang Songfeng
Researcher

Academy of Macroeconomic Research
National Development and Reform Commission

VOLUME 2, ISSUE 3

A Coal-Based Strategy to Reduce Europe’s Dependence on Russian Energy Imports

With Western Europe facing the apparently intractable problem of its dependency on Russian natural gas imports, it is refreshing to read a rational analysis that reminds us that an increased use of coal could broaden the region’s options for energy sources. Through the use of carbon capture and sequestration, as well as other clean coal technologies, Western Europe can simultaneously reduce its dependence on natural gas imports, as well as increase the recovery rate from its North Sea oil reserves, and not increase its greenhouse gas emissions. While not neglecting long-run climate concerns, an increased use of new technologies to utilize the ample and widely available sources of coal would enable Europe to respond to its short-term energy security needs while not burdening its economies with excessive energy price increases. There are only a limited number of options for energy, and with energy goals that include a reduced reliance on nuclear power and less dependence on Russian natural gas, the answer to Western Europe’s energy problem clearly involves a greater use of coal.

John Jelacic
Independent Energy and Economic Analyst

This article is overly ambitious in its assertions of what is possible regarding bringing online coal-fired power plants that are no longer operating in the EU. One example is the statement that some plants currently idled, such as those in the UK, could be “brought back online relatively quickly”. In many cases such plants are not actually idled, but completely shut down. In some cases these plants have even been partly or fully demolished. Even for those plants still standing, they could not be simply placed back into service. Their operation would be illegal as many of these plants do not have the required environmental controls to operate legally today. In fact, this article does not take into account EU emission regulations, including the Industrial Emissions Directive—this will be enforced as of 2016 and will actually result in the closure of additional plants. Generally, the strategy laid out in this article cannot realistically be followed under the current regulatory environment in the UK and greater EU.

Anonymous

Response: The article was based on a dynamic situation regarding the state of coal-fired power plants in the EU; unfortunately, some plants have been idled or demolished since the original research was completed. However, the reader brings up a valuable point that the longer European leaders wait to act, the more difficult it will be to reduce reliance on Russian energy supplies. Thus, the door of opportunity is closing and I suggest there should be an immediate moratorium on demolishing any coal-fired power plants in Europe. For instance, in the UK, potential power generation sources such as the 1000-MW Ferrybridge plant or the 350-MW Uskmouth plant must be protected.

The research and the article did take into account the environmental upgrades that would be necessary to bring idled coal-fired plants back online. For example, I noted on p. 46, “It may be necessary to add more SO2 and NOx controls, and perhaps other environmental upgrades, to the units.” While considerable investment may be required, adding environmental controls for criteria emissions include applying completely understood, fully commercial technologies already deployed throughout Europe and the world.

Regarding greenhouse gas emissions, the article showed that CTG with CO2-EOR actually resulted in lower greenhouse gas emissions compared to continuing to rely on the leaky and poorly maintained natural gas pipelines from Russia. As well, there may be additional opportunities to reduce greenhouse gas emissions with CCUS from coal-fired power plants when it is commercial and supported by CO2 prices in the EU ETS.

Finally, it is important to make clear that the article presented an ambitious strategy to increase the energy security of the EU. There may be some regulations that are not compatible with the strategy, but it is worth weighing the value of a carbon-neutral strategy that improves energy security. Regulations can be modified more easily than global energy reserves.

Roger Bezdek
President

Management Information Services, Inc.

 

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The content in Cornerstone does not necessarily reflect the views of the World Coal Association or its members.

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