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Coal’s sharp rebound ‘is threatening net zero goals’ – IEA
Worldwide Coal power
Rapid economic recovery is driving global coal power generation towards a record this year and overall coal demand to a potential all-time high, undermining efforts to reduce greenhouse gas emissions, says the International Energy Agency in its latest annual market report.
After falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high of 10 350 terawatt-hours, according to the IEA’s recently released ‘Coal 2021’ report. The rebound, driven by the global economic recovery, has pushed up electricity demand much faster than low-carbon supplies can keep up. The steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive.
Overall coal demand worldwide – including uses beyond power generation, such as cement and steel production – is forecast to show growth of 6% in 2021. That increase will not take it above the record levels it reached in 2013 and 2014, but depending on weather patterns and economic growth, overall coal demand could reach new all-time highs during this year and remain at that level for the following two years, underscoring the need for fast and strong policy action. “Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is
in its efforts to put emissions into decline towards net zero,” said IEA executive director Fatih Birol. “Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5 °C.”
In China, where more than half of global coal-fired electricity generation takes place, coal power is expected to grow by 9% in 2021 despite a deceleration at the end of the year. In India, it is forecast to grow by 12%. This would set new all-time highs in both countries, even as they roll out impressive amounts of solar and wind capacity. While coal power generation is set to increase by almost 20% this year in the United States and the European Union, that is not enough to take it above 2019 levels. Coal use in those two markets is expected to go back into decline next year amid slow electricity demand growth and rapid expansion of renewable power.
“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said Keisuke Sadamori, director of Energy Markets and Security at the IEA. “Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two
economies – dependent on coal and with a combined population of almost 3 billion people – hold the key to future coal demand.”
Coal pricing
In 2020, global coal demand fell by 4.4%, the largest decline in decades but much smaller than the annual drop that was initially expected at the height of the lockdowns early in the pandemic, the IEA report shows. Regional disparities were large. Coal demand grew by 1% for the full year in China, where the economy began recovering much earlier than elsewhere, whereas it dropped by nearly 20% in the United States and the European Union, and by 8% in India and South Africa. Coal prices have been on a rollercoaster ride over the past two years. After falling to USD 50 per tonne in the second quarter of 2020, they started to climb towards the end of the year, with supply cutbacks balancing the market before rebounds in economic activity and coal demand in China started pushing prices up. In 2021, prices were lifted further by demand outstripping supply in China – the global coal price setter – as well as by supply disruptions and higher natural gas prices globally. Coal prices reached all-time highs in early October 2021, with imported thermal coal in Europe, for example, hitting $298 per tonne. Quick policy intervention by the Chinese government to balance the market had a rapid effect on prices. As of mid-December, European prices were back below $150 per tonne.
Industrial–scale electrolysis goes into series production
Germany Hydrogen economy The first series production of electrolysis systems from the Baden-Württemberg Project got underway in January. In order to make hydrogen technology sustainable for the future, there is a need for the roll-out of electrolysis on an industrial scale and for the rapid development of production capacity. To make this process more efficient, the Centre for Solar Energy and Hydrogen Research Baden-Württemberg (Zentrum für Sonnenenergie und Wasserstoff-Forschung Baden-Württemberg – ZSW) has joined forces with industrial parts cleaning company Ecoclean for the ‘EcoLyzer BW’ project, which was due to start in January, and together they plan to develop an internationally competitive electrolysis system and see it through to series production and market launch. There
are currently about 10 companies in the world which are developing and supplying commercial electrolysis systems on a megawatt scale. So far, however, there has been no industrial provider of electrolysis system technology in Baden-Württemberg to act as a system integrator and bundle the expertise in the federal state, and which would be able to proceed quickly to competitive product development and serial production.
In adopting the Green Deal, Europe has committed itself to becoming the first to be climate-neutral by 2050 and has introduced much stricter greenhouse gas reduction targets for 2030 from minus 40 % to minus 55 % compared to 1990 levels. EcoLyzer is a technique for water electrolysis in the 1 MW category developed
4 | January/February 2022 |
www.modernpowersystems.com
by the ZSW over the past 10 years. It is an alkaline high-pressure electrolysis system. The electrolyser can be fitted with two electrolysis stacks, each with an output of 0.5 MW, and at maximum capacity it will deliver about 20 kg/hour of hydrogen, at a pressure level of 16 bar, with an efficiency of around 70 %. The ZSW chose this technology because it is already tried and tested, it is a robust technology, it lends itself to scaling, and it does not involve the use of precious metals and rare earth elements where resources are at critical levels.
The technology developed by the ZSW has already been tested in practice since 2019 in the context of ‘Power-to-Gas Baden- Württemberg’, a flagship project in Grenzach- Wyhlen funded by the Baden-Württemberg ministry of Economic Affairs.
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