The future of coal in Australia

Not only will coal continue to be a significant export and crucial resource domestically, it will carry on providing new infrastructure, income and jobs across Australia for years to come. The Department of Industry and Science reports that there are around 60 coal-related projects being explored, which together could provide over 58,000 new construction and mining jobs in the future. In addition, 15 coal mining projects were completed in the two years to April 2015, adding a production capacity of about 57 million tonnes.17

Future of coal
The global role of coal

The demand for both metallurgical (steel-making) and thermal (energy) coal is increasing as highly populated emerging economies urbanise and indistrialise. Looking ahead to 2030, electricity generation worldwide is expected to increase by more than 40%.

The International Energy Agency affirms that it is ‘an alarming fact’ that today billions of people lack access to the most basic energy services.  Nearly 1.3 billion people are without access to electricity and 2.7 billion people are without clean and safe cooking facilities.  These people are concentrated in developing Asia, sub-Saharan Africa and in rural areas.  More than 620 million people in sub-Saharan Africa live without electricity and nearly 730 million people rely on dangerous, inefficient forms of cooking. 18

Providing affordable electricity is one of the first steps to improving the lives of many of these people and their communities. And here, coal is continuing to play a major role.

According to the international Energy Agency, the world will use 1 billion tonnes more coal in 2019 than today – more than 9 billion tonnes a year.19 There is more coal-fired electricity capacity in the investment pipeline than any other fuel (Figure 1).20

 

 

 

The IEA projects that in 2030, coal will account for 25 per cent of world primary energy demand and 31 per cent of world electricity generation.21 China is, and is projected to remain, the world’s largest consumer and producer of coal through to at least 2030.22 China’s coal demand growth shows no notable sign of decline by 2030 and 345 gigawatts of net new coal-fired capacity is installed by that year – more than six times Australia’s existing total capacity for all energy types.23  The IEA’s projections also see continued growth in India’s demand for coal-fired generation. India’s coal-fired capacity grows by 70 per cent by 2030.24 Coal is also expected to become the dominant fuel in Southeast Asia.25

Coal and renewable energy

While renewable energy is growing, coal will feature prominently in the global electricity mix for decades to come.  There is more coal-fired electricity capacity in the investment pipeline than any other type and the International Energy Agency projects that coal will remain the largest single source of electricity generation.  In 2030, coal is expected to fuel 10,253 terrawatt hours of electricity – nearly twice as much as hydro, four times more than wind and eight times more than solar.26  It’s abundance and affordability ensuring its power-generation role. This is why it is critical for the industry as a whole to continue to work hard to develop and implement HELE and CCS technology with a view to near zero emissions.

Even though these technologies are being rolled out, coal continues to invest heavily in researching and developing other new low emission technologies that can take this little black rock well into the future. 26

Future of coal - renewable energy
How much coal is left?

Coal is the most abundant fossil fuel in the world. And Australia is fortunate enough to have one of the largest coal reserves. In Australia it is estimated that we have enough black coal to last more than 100 years and lignite (brown coal) to last 465 years. 27

References

17

Department of Industry and Science, Resources and Energy Major Projects publication series.

18

International Energy Agency, World Energy Outlook: Modern energy for all: Energy Access.  According to the World Health Organization, 4.3 million premature deaths each year can be attributed to household air pollution resulting from the inefficient use of traditional biomass such as wood, charcoal and animal waste.  World Health Organization, Household air pollution and health, fact sheet no. 292, updated March 2014.

19

International Energy Agency, Medium-Term Coal Market Report 2014, released on 15 December 2014, Paris, p. 13.

20

Department of Industry and Science, Resources and Energy Quarterly – June Quarter 2015, released on 30 June 2015, Canberra, p. 29.

22

International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report, released on 15 June 2015, Paris, p. 51.

23

International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report, released on 15 June 2015, Paris, p. 52.

24

International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report, released on 15 June 2015, Paris, p. 56.

25

International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report, released on 15 June 2015, Paris, p. 61.

26

Department of Industry and Science, Resources and Energy Quarterly – June Quarter 2015, released on 30 June 2015, Canberra, p. 29; International Energy Agency, Energy and Climate Change: World Energy Outlook Special Report: Data table: Intended Nationally Determined Contributions Scenario, last updated 15 June 2015.

27

A. F. Britt et al., Australia’s Identified Mineral Resources 2014, Geoscience Australia, Canberra, p. 4.