Should We Make Coal History?

Globally, coal is the largest source of power generation. The International Energy Agency (IEA) estimates that coal-fired power generation comprises 36 percent of total power generation worldwide in 2019, producing 9700 TWh of electricity.

In particular, developing countries in Asia are leading the coal-fired charge. Home to half the world’s population, Asia accounts for 75 percent of global coal consumption. More importantly, according to Global Energy Monitor, it accounts for more than three-fourths of coal plants that are either under construction or in the planning stages — which is around 1,200 of them. About 500 gigawatts of coal power capacity is planned or under construction around the world, with an investment cost of US$638 billion.

The Case for Coal

Even with the advances in renewable energy and battery storage technology, coal and other hydrocarbon-fired power plants remain the most reliable options for power generation. The cyclical power generation pattern of solar and wind plants do not match a typical daily electricity demand pattern — leaving conventional power plants to make up the shortfall.

In addition, coal is the cheapest and most affordable energy option, especially for developing countries. Coal is abundant and inexpensive to mine, as well as relatively simple to transport and store. Coal-fired plants are easy to build, and the technology behind them is well-understood and reliable. As a result, countries like Indonesia, Vietnam, and Bangladesh are either mining for coal, building new coal-fired plants, or both.

Even Japan and South Korea are maintaining their coal-fired plants. Japan in particular is resurrecting coal after the 2011 Fukushima nuclear disaster. But the largest coal consumer by far is China, which accounts for half the world’s coal consumption. More than 4.3 million people are employed in the country’s coal industry.

So Why Kill Coal?

Coal is cheap — assuming its significant health and environmental costs are not accounted for. These externalities, if properly priced in, will make coal three times as expensive as renewables.

In China, mortality from coal-related air pollution is now valued at 10 percent of GDP. A 2015 IMF assessment put global fossil fuel subsidies at US$5.3 trillion annually, which includes the costs of managing the environmental and health impacts of coal. The burning of coal emits hazardous air pollutants that can spread for hundreds of kilometres. Pollutants include particulate matter, sulfur dioxide, nitrogen oxides, carbon dioxide, mercury and arsenic. Exposure to these pollutants can damage people’s cardiovascular, respiratory and nervous systems, increasing the risk of lung cancer, stroke, heart disease, chronic respiratory diseases and lethal respiratory infections.

The mining of coal also destroys the environment. Vast tracts of forests, mountains and farmland have been cleared to make way for coal mines. Miners face great physical risk due to accidents, explosions and mine collapses.

In the West, where coal power kickstarted the Industrial Revolution, there has been a long-running backlash against coal. The consumption of coal in North America and Europe has fallen by 39 percent since 2009. In Britain the last coal-fired power plants could close as soon as 2022.

Coal generation in Europe plummeted in 2019 (by 175 TWh), mainly because of strong renewables-based generation and coal-to-gas switching. Many countries have announced coal phase-outs: Germany, the largest coal consumer in Europe, plans to be coal-free by 2038.

Even under the Trump administration, which favoured America’s coal industry with deregulation and political support — coal-fired power generation in the United States continued to decline in 2019 (by roughly 200 TWh) as overall power generation fell and gas-fired generation continued to expand.

More importantly, banks and investors are increasingly reluctant to fund new coal projects. In January, asset management giant Blackrock announced that it was to realign its investments with sustainability, and halt support for coal projects. In May, Australian bank Westpac said it was to phase out coal investments by 2030 and provide AUD3.5 billion of new lending to climate change solutions over the next three years.

Even in China, where coal reigns supreme, it is also aspiring to wean itself off coal. President Xi Jinping has adopted a target to cut China’s net carbon emissions to zero by 2060. China is now also the world leader in solar and wind power installation. The 14th Five-Year Plan, running from 2021 to 2025, will also lift the proportion of renewable energy while cutting China’s reliance on coal.

Hence, it does make sense for coal to be killed, but it will take considerable political will to do so. Europe and America have more or less dethroned King Coal, but Asia has yet to kick the habit. Japanese and South Korean banks continue to fund coal projects in emerging economies, which ultimately will lock their power generation in to coal for the next 50 or so years. But pressure from Asian civil society against coal is mounting. In the long-term, coal should be consigned to the history books.