PÖYRY POINT OF VIEW REPORT / 10 Oct 2016
The Coal Conundrum
The latest Pöyry Point of View highlights that, despite growing climate change concerns, global demand for coal has almost doubled since the Kyoto Protocol in 1997. The report argues that the future role of coal in the global energy mix must include co-firing with biomass and a renewed focus on Carbon Capture and Storage (CCS).
Pöyry analysis has developed a retirement profile for existing global coal capacity. The analysis reveals that without radical change, it is likely that the majority of coal-fired generation capacity will be with us for the foreseeable future, with the projection indicating around 1,300GW still in operation by 2040. Significantly, the Pöyry projection does not factor the several hundred GW of new coal which is under construction around the world and the many more that are still in planning.
Matt Brown, Vice President at Pöyry Management Consulting, says
Our research has revealed a worrying situation where we risk sleep walking into the mid-century having not addressed the challenges posed by coal to the environment. As world leaders gathered at COP21, there was an implied commitment to reach net-zero emissions by 2050. Without significant change, that commitment may be difficult to meet with the retirement portfolio we are projecting for coal.
Increasing the coal fleet’s efficiency is very important but in addition we need to co-fire coal capacity with biomass and push harder on CCS. Sadly on CCS, we are in need of urgent practical progress when it comes to the appraisal and development of CO2 storage sites and the economic model that makes costly CCS plants competitive with their carbon-emitting counterparts.
If we want to keep the lights on and save the planet then governments and companies alike need to urgently address the coal conundrum’.