After a long journey, half of the European Union's 619 coal-fired power stations are losing money, as recently reported by the Guardian. Seven European countries including the United Kingdom (UK), have already announced the end of coal power by 2030 or earlier.
In 1781, the issuance of patent of steam engine to Scottish engineer James Watt created the job for coal. Very rapidly, coal-powered steam engines started substituting horses and water wheel to power productive activities, fueling industrial revolution in England. With the growth of demand of burning coal to produce steam, air pollution also started to increase, eventually creating the greenhouse effect.
With the invention of electrical light bulbs, coal also produced steam to rotate turbines to generate electrical energy. With the first dynamo built for power generation in 1866 by Werner von Siemens, coal-fired power plant development started. Technology progression created the scope for coal, making horses jobless. The continued progression of technology has now put coal on death spiral.
Availability of supply alone does not ensure the demand of input. Technology plays an important role in determining utility of inputs, which keeps changing. Despite the world's proven coal reserves to meet 153 years of global production, roughly three times the reserve to production ratio for oil and gas, coal is about to fully retire from electrical power production due to emergence of better technology, making alternative energy sources cheaper, and also cleaner. In comparison to natural gas and renewables, coal is dirtier. In many advanced countries, coal plants are the top sources of carbon dioxide (CO2) emissions, the primary cause of global warming. For example, in 2011, utility coal plants in the United States alone emitted a total 1.7 billion tons of CO2. Moreover, burning coal is also a leading cause of smog, acid rain, and toxic air pollution. It is also needless to say that air pollution has already reached an alarming level in major south Asian cities, placing Dhaka in the second worst position. The economic implications of air pollution caused by coal-fired power plants will be far higher in densely-populated countries like Bangladesh in comparison to sparsely-populated ones.
Despite serious adverse effect of coal on global warming and air pollution, coal-powered power plants remained in operation due to cost advantage. So far coal has been the cheapest source of energy to produce electrical power. But, the recent technology development has been rapidly eroding the cost advantage of coal.
Hydraulic fracturing-'fracking'-has increased natural gas production lowering the price. 'Tight gas' and 'shale gas' are the types that fracking mythology targets to extract, had very insignificant contribution to total natural gas supply in 1990. But within just a span of less than 20 years, in 2013, fracking has enabled tight gas and shale gas to contribute to 60 per cent of the 24.19 trillion cubic feet of natural gas production in the USA alone, making natural gas a cheaper option than coal to produce electrical power. As a result, the share of natural gas in power production in the US has risen as coal's has fallen-by close to a third - from 2011 to 2016.
On the other hand, renewable energy is also getting cheaper and more widespread. According to Matt Gray, co-author of the recently released Carbon Tracker report, "coal-fired electricity capacity could be replaced by cheaper renewables, with building new onshore wind and solar PV projects projected to be less expensive than operating existing coal plants by 2024 and 2027 respectively." The development of battery technology is also rapidly progressing to be a cost-effective solution to develop a large reservoir of power to deal with the 'intermittence' issue of renewable.
"The changing economics of renewables, as well as air pollution policy and rising carbon prices, has put coal power of the European Union (EU) in a death spiral," said Matt Gray. In the UK, where coal use will end by 2025, it has gone down from 40 per cent of coal-fired electricity to 2 per cent since 2012. The economics of production is now adding momentum to air pollution regulation to place coal power plants in death spiral. It's being reported that 54 per cent of coal power plants in Europe have already become loss-making today. It is being estimated that closing all the plants by 2030 will avoid losses of €22 billion for the plant's owners, either shareholders or governments. Basically, the changing economics of renewables, powered by technology, as well as air pollution policy and rising carbon prices, has put EU coal power in a death spiral-resulting in job loss for coal workers. Although the US government has been providing subsidy to revitalise coal mining communities as part of election pledge, neither production, nor jobs for coal miners is increasing sharply. According to an estimate of the Bureau of Statistics, coal mining employed 51,200 people as of November 2017 in the USA-an improvement, year-on-year, of just 1,500, but still well below the recent peak of 89,700 in 2012. On the other hand, since 2010, the share of energy generated in the USA by renewables has grown by nearly 50. It has been reported that the expected coal use across the globe in coming decades, particularly in Asia, has fallen sharply recently. The International Energy Agency's prediction of expected world-wide coal-burning to grow by 40 per cent by 2040 made in 2013- has now come down to just 1.0 per cent growth.
Many developing countries, including Bangladesh, are now at the very early stage of consumption of electrical energy, which is expected to grow by manifolds over the next couple of decades. These countries have already started making massive investment to develop power plants. In the primary energy portfolio, coal is given priority due to historical cost advantage despite having serious consequential effect on air pollution and climate change. Installation of coal power plants in densely populated countries, even near ecologically sensitive areas, is being justified from the cost advantage point of view. But, the changing effect of technology on cost advantage of alternate options should be taken into consideration to review the primary energy mix policy. There may be an argument that the price of coal will substantially fall due to lower demand to maintain economic attractiveness. We should keep in mind that due to the emergence of better technology, the demand for traditional horse-work fell, so did horse prices, by about 80 per cent between 1910 and 1950. But such rapid price reduction could not keep horses in work force, as the substitution was far better.
It's time to take lesson from the history of technology evolution and changes of attractiveness of emerging options to get our job done in most effective and efficient manner, while causing less pollution. There appears to be a very clear signal that technology has been reaching a point to put coal in permanent retirement as it did for horses. Instead of investing for coal power plants, which will likely be costlier as well as dirtier than alternatives during their lifecycles, it would be wiser to send the past plan having coal-based power generation in retirement, and opt for smarter energy options, to enjoy cheaper as well as cleaner alternatives.
The writer, a PhD, is an academic, researcher and activist in technology, innovation and policy.
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