Coal may not be King, but still Royalty in Developing World


A recent warning story by ratings service Morningstar detailed the four “demand killers” for coal in the U.S. utility segment. Call them the Four Horsemen if you like or whatever apocalyptic banner strikes the deepest chord, but the article notes that economic, environmental and regulatory factors are combining to accelerate coal’s demand decline. Not even President Trump’s support for homegrown coal can save it, they write.

Those demand killers (and their underlying reasons) are 1) cheap natural gas (and all-time production and reserve highs of it); sluggish or falling consumer demand for energy (thanks to energy efficiency and data-analytic advances); 3) strong policy support for renewable, clean energy (in many states: from heads Carolina to tails California); and 4) environmental regulators.

The Trump Administration killed the Obama-era Clean Power Plan, but many of the EPA’s prior edicts still stand. And companies, meanwhile, have pushed their own agendas for cleaner emissions, signing long-term power purchase deals for wind and solar.

So what’s a long-time reliable power source with a 300-year supply to do as utilities in the U.S. and Europe leave it in droves? For companies and nations which rely on coal, the answer is to make plants more efficient, while respecting the new-found ardor of less rich nations which need the low-cost coal to keep their hopes for economic growth going upward.

India, for instance, has doubled its coal-fired installed capacity to 197 GW in the past decade. China is filling in the gaps and beginning to lead the world in developing advanced, more efficient coal-fired technologies, while also serving as the majority supplier for developing economies in Africa.

A recent report by the International Energy Agency indicated that global coal-fired generation actually increased 3 percent in 2017, more than offsetting a decline from 2015 to 2016.  Those increased trends emanated mainly out of Asia, overcoming decline elsewhere.

Coal’s rally in the developing world is likely to slow, as China and India also pursue ambitious clean energy plans. Nonetheless, it’s here for a good long time, Hundreds of GWs in new capacity globally are being added even as plants in the U.S., UK and Europe are being shut down.

But that’s not all of Europe celebrating the exaggerated death of King Coal. Poland has lost more than 300,000 mining jobs in the past three decades and cut its coal extraction by more than 50 percent, but it’s still getting close to 80 percent of its electricity from fossil fuels and isn’t keen to damage its industrial base right now.

The world still has thousands of coal-fired generating units, some new and some old. And dozens more are still getting built, particularly in developing areas. Those units need manufacturers and service companies.

So while coal may not be king such as it was, it’s still treated royally around much of that world that feels like it’s still one of the best options to get electricity to those most in need.

POWER-GEN International will feature sessions on modernizing steam turbines for improved efficiency and life extension, as well as increasing the competitiveness of coal-fired power plants. These are both a part of the Optimizing Plant Performance track at POWER-GEN.

Celebrating its 30th anniversary, POWER-GEN will be December 4-6 in Orlando, Florida.