COALPRO BRIEFING - NOVEMBER 2001

Affordable energy security from coal

A topical briefing from the Confederation of UK Coal Producers (COALPRO), Nov 2001
  • COALPRO represents the interests of coal mining companies throughout the UK who collectively mine around 85% of the country’s production.
  • It is the Government’s duty to balance energy security, affordability and environmental objectives.

    • The West’s growing dependence on natural gas

    The West’s dependence on Middle Eastern oil is being eclipsed by a growing dependence on gas from non-OECD countries. The security implications are massive and predictable.
  • Natural gas is a premium fuel that can be used very efficiently in household applications, in commercial plants which genuinely combine heat and power, and in vehicles to reduce traffic pollution.
  • Yet, the UK has depleted its own reserves on a brief foray into power generation.
  • In 1990, the remaining lifetime of total UK gas reserves stood at 36 years, by 2000 this had fallen to 14 years, with just 6 years of proven reserves.
  • The UK will soon become a net importer of gas and, by 2020, will import between 55% and 90% of its requirements.
  • Gazprom in Russia and the National Iranian Oil Company control almost half of global gas reserves.
  • The UK, at the end of very long pipelines passing through many countries, will be subject to the highest transportation costs and greatest risk of supply interruption.
  • California failed to value supply security within its liberalised market and so allowed over dependence on natural gas without regard to whether consumers could afford this over the longer-term.

    • Coal’s role in a balanced energy policy

    Coal offers long-term security and diversity of supply at an affordable cost. The UK has at least 50 years of reserves and internationally traded coal is available from politically stable countries around the world.
  • There is a logical choice for the UK: we can become dependent on gas from Russia and the Middle East, we can turn back to nuclear, or we can embrace clean coal.
  • Clean coal technologies can deliver Kyoto beating carbon reductions of 35% from the electricity sector in a scenario where one third of electricity comes from CO2 neutral sources (nuclear and renewables), one third from gas and one third from coal. This would provide an unprecedented level of energy security and, with carbon management, is a route to the “deep cuts” demanded by the Royal Commission on Environmental Pollution.
  • Markets do not value security so carbon taxation or emissions trading would simply encourage fuel switching away from coal, reducing the security of energy supplies.

    Clean coal technologies & carbon management

    Proven clean coal technologies are not expensive and are now ready for commercial deployment. Even the costs of carbon capture and sequestration are not prohibitive, and there is a large potential to reduce CO2 emissions at a cost well below that of renewables or nuclear.
  • · A clean coal plant, built today, would be at least 15% more efficient than existing coal-fired plant; by 2010 the improvement could comfortably exceed 25%. In terms of carbon emissions, this equates to an improvement of 150-250 gCO2/kWh. This could be achieved with a Clean Coal Obligation buy-out set at 1p/kWh, or £147-244/tC saved, compared with the Renewables Obligation buy-out of 3p/kWh, or £312/tC saved.
  • · The International Energy Agency estimates that capture and storage of CO2 from a clean coal power station would cost around £100-150/tC saved and much less than this if CO2 is used to enhance oil recovery from the North Sea.
  • · The Government has stated that the proposed Renewables Obligation “represents good value for money at around £310 / tonne of carbon”. We conclude that a Clean Coal Obligation, costing less than half this sum, must represent exceedingly good value for money.

    • A Clean Coal Obligation

    COALPRO calls for a Clean Coal Obligation to support the commercial deployment of clean coal technologies.
  • In terms of value for money, an obligation is the best approach: it is not a drain on public finances, the Government sets objectives, industry competes to meet these cost effectively, and the public benefits with environmental improvements, increased security of supply and affordable energy.

    Consumer protection

    Consumers have a right to economic and secure supplies of energy within a framework that meets their expectations on sustainability. In the long-term, this can only be assured with access to diverse and competitive sources. Logic dictates that this must include electricity from coal. MEDIA CONTACTS:
    CoalPro Director General01924 200802
    Stuart OliverPublic Relations01525 381759
    (Mob) 07774 231178
    THE CONFEDERATION OF UK COAL PRODUCERS
    Confederation House,
    Thornes Office Park,
    Denby Dale Road,
    Wakefield WF2 7AN,
    West Yorkshire, England
    Tel: +44 (0)1924 200802
    Fax: +44 (0)1924 200796
    Email: admin@coalpro.co.uk