Coal in Japan and the World Our Collective Energy Future

Transcription

1 Coal in Japan and the World Our Collective Energy Future Fred Palmer Chairman World Coal Association Clean Coal Day in Japan 2011 International Symposium September 6, 2011

2 The Future of Coal is Now Isogo Thermal Power Station, Yokohama, Japan J-POWER s Unit No MW USC Gross thermal efficiency: 45% Reducing emissions to those of an NGCC power plant

3 Japan s Plan: Investment in Advanced Coal Technology JCOAL Development Roadmap A Clear Path to Low-Carbon Coal Source: Japan Coal Energy Center

4 Global Consensus: Technology Creates Low-Carbon, High-Growth Future Eliminating Energy Poverty Becomes Priority No. 1 We should cooperate in achieving the peaking of global and national emissions as soon as possible bearing in mind that social and economic development and poverty eradication are the first and overriding priorities of developing countries and that a low-emissions development strategy is indispensible to sustainable development. 4 4

5 Unlocking Coal s Power Worldwide Agenda Coal: The Path to Energy Poverty Eradication Japan as Global Model: Highly Efficient Coal Use Drives Low-Cost Exports Coal-Fueled Growth in China Lifts Asia Coal Best Path to Power Japan s Economy 5

6 World is Experiencing an Enormous Wave of Energy Demand Extraordinary Global Growth by 2050 Global GDP up 270% Electricity generation up 130% World population exceeds 9 billion 13 billion tons of coal used annually Guangzhou, China

7 World s Largest and Fastest-Growing Economies Rely on Coal Asia Accounts for 4 Billion Tonnes of Demand Growth Through , Coal Growth (Tonnes in Millions) +30 Source: International Energy Agency World Energy Outlook 2010; Annual Energy Outlook 2011 Early Release, U.S. Energy Information Administration; Peabody analysis.

8 Asia Leads Historic Expansion in Coal-fueled Generation Coal s Growth 2x+ Gas, Oil, Nuclear, Hydro, Biomass, Geo & Solar Electricit ty Genera ation (TW Wh) 3,516 Incremental Generation by Fuel Type ( ) , ,604 (368) Source: International Energy Agency, World Energy Outlook 2010.

9 Why Coal? Because Electricity is Good And More is Better 1 Beneficial Electrification: Improving quality of life through electricity 2 3 Ecowatts: Using more affordable kilowatts for economic growth and a cleaner environment by avoiding fossil fuel combustion at the point of use Electrotechnologies: The means to drive the application of Ecowatts to create benefits for society, including enhanced energy efficiency Workplace Economic Growth Quality of Life Improvement Access to electricity is strongly correlated with every measurable indicator of human development - Berkeley Science Review, 2008 Environmental Progress

10 Coal is the Power Behind Global Economic Growth Strong Link Between Electricity from Coal and Economic Growth 16,000 14,000 Global Electricity from Coal 95,000 85,000 Electricit ty from Coa al (TWh) 12,000 10,000 8,000 6, ,000 World GDP 75,000 65,000 55,000 45,000 35,000 25,000 World GD P (billions of 2005 $) 2,000 15, Source: Developed from International Energy Agency World Energy Outlook 2009 and Energy Information Administration International Energy Outlook 2010.

11 Electricity Enables People to Live Longer and Better United Nations Links Affordable Energy to Quality of Life Asian Economies Are Just Beginning to Access Affordable Energy Source: CIA World Fact Book 2009, United Nations Development Program s Human Development Report, 2009.

12 Electricity = Our Path Out of Poverty First, the United States I had seen first hand the grim drudgery dger and grind which had become the common lot of American farm women growing old prematurely; dying before their time. - Senator George Norris, sponsor, Rural Electrification ti Act of 1936 Then Japan The Japanese economic miracle is one of the great success stories of the postwar period Industrial activity revived due to cheap energy and access to expanding world demand. - Andrew Gordon, The Wages of Affluence And Now China Electrification in China is a remarkable success story the most important lesson for other developing countries [is] that electrified countries ti reap great tbenefits. - IEA, 2007

13 Good Energy Access: A Rapidly Rising Need 3.6 Billion People Have No or Only Partial Access to Electricity Millions of People Who Lack Adequate Electricity Millions of People Who Have No Electricity Source: International Energy Agency 2009 World Energy Outlook and The World Bank 2010.

14 Do We Recognize the Enormity of the Challenge? Citizens Need 60+ Times IEA Benchmark for Human Development 6,963 ours Kilowatt H 2, Ethiopia IEA Benchmark Nigeria Bangladesh India Indonesia Electric Power Consumption Per Capita Source: World Development Indicators 2010, International Bank for Reconstruction and Development, The World Bank; International Energy Agency, World Energy Outlook Mexico Euro Area

15 Japan s Economic Rise Based on Affordable Energy and Exports 1960s 90% of households gain three 1970s treasures, a refrigerator, television and washing machine 1980s Japan makes 1/3 of the world's cars, steel and ships, 2/3rds of all consumer electronics and 50%+ of all machine tools 1987 Per capita income overtakes every organization in the OECD. Japan is 2nd largest economy in the world 1990s Japan with just 2.6% of the global population and 0.1% of inhabitable area claims 10% of economic production

16 Japan as Global Model: Coal and Efficiency Create Steel Powerhouse Japan Coal Energy Center Drives World-Class Efficiency Energy Required to Produce One Ton of Steel n = 100 x: Japan Index Source: Japan Institute of Energy Economics and Japan Iron and Steel Federation.

17 Coal s Affordability Fuels Japan s Manufacturing Base Japan s Coal Use Doubles in Past 20 Years, Forecast to Increase July 2011 Forecast Nuclear by Japan Institute t of 24% Energy Economics: Gas By 2012 Coal May Oil 26% Provide ~1/3 of 13% Japanese Electricity Coal 27% Other 3% Hydro 7% Source: Japan Ministry of Economy, Trade and Industry, 2010, and Japan Institute of Energy Economics, 2011.

18 Coal is Japan s Lowest Cost Option in Post-Nuclear Age 450 Costs of Electric Power Generation in Japan 400 The cost of power from new energy (renewables) is higher than existing 350 energies (coal) due to low utilization 300 rates, unstable output, and limited siting areas. 250 Japan Agency for Natural Resources and Energy, Hydro Oil LNG Coal Nuclear Solar Wind Source: Japan Ministry of Economy, Trade and Industry, 2010, and Japan Institute of Energy Economics, 2011.

19 Globally No Energy Alternative Comes Close to Coal To Replace Coal Generation by 2035, the World Would Need SOLAR* WIND* 1,250 x Current Solar Generation 4.6 Million Wind Turbines NUCLEAR 2,100 Nuclear Plants NATURAL GAS 4,704 GW of Gas Plants, >4 x Current Global Gas Capacity HYDRO 200 Three Gorges Dams *Requires backup generation. Source: International Energy Agency World Energy Outlook 2010; U.S. Energy Information Administration International Energy Outlook 2010; Wyoming Coal Association 2010.

20 The Past is Prologue: LNG Closely Linked to the Price of Imported Oil LNG and Oil Prices in Japan Since 1969 Japan Customs Cleared Crude (JCC) If Japan relies on gas to replace lost nuclear capacity, LNG Imports would account for ~ 45% total world LNG imports Japan s LNG import cost averaged $604/t last year, rising 22% from 2009, as international oil prices rose. LNG World News, January 2011 Source: International Energy Agency

21 World Bank Warns of Japan s LNG Overdependence Japan Accounts for ~ 40% of Total LNG, World s Largest Importer LNG Impo orts (BCF F) Since global market for LNG tanker capacity is tight, [replacing a nuclear shortfall with] LNG demands from Japan would induce market pressures. World Bank Source: Energy Information Administration; 2009, World Bank, 2011

22 The Coal Path: China s Coal-Fueled Rise is Japan s Gain China: Shock-absorber for the developing world. OECD Insights Every ypercentage point of growth in China helps lift 16 million people in the developing world out of poverty. OECD Development Centre China s high economic growth, which is increasingly becoming inclusive, is producing positive spillovers to the ASEAN nations. University of Singapore

23 China s Greater Use of Coal Lifts Millions in A Better Life China s Economic Miracle Spans Metrics; China 80%+ Coal-Fueled GDP +282% Electricity +174% Autos +926% Coal Use +71% 30,000 10, ,000 25,000 20,000 9,000 8,000 7,000 6, ,000 3,000 15,000 5, ,000 5,000 4,000 3,000 2,000 1, ,000 1, (Billion 2005 US$) (TWh of Electricity) (Millions) (Million Tonnes) Source: U.S. Energy Information Administration, International Energy Outlook 2010 (GDP; Power Demand; Coal Use); Dargay et al., 2007; Bhattacharya at INCAL.

24 Steel and Cities in China: No Steel at Scale Without Coal China s Urbanization Fuels Market for Japanese Steel Industry Source: Developed from McKinsey & Company,

25 Coal s Versatility, Reliability Offers Energy Security to Asian Economies Developing JCOAL s Technologies Provide a Path for Japan s Energy Security through Coal

26 Japan Displaces Oil with Coal Energy Consumption in Japanese Manufacturing Manufacturing industry accounts for 90% of the industrial sector, consuming about 45% of the energy used as a whole. METI Source: Japan Agency for Natural Resources and Energy.

27 Clean Coal Green Coal Since Clean Air Act, Coal Use and GDP Triple as Regulated Emissions Decline 84% 1960s Electrostatic Precipitators Remove Particulates Re egulated U.S. Emissions Reduc ctions Per MWh 1970s U.S. Clean Air Act Enacted 1970s Scrubbing Technology Reduces Sulfur Dioxide 1980s Technologies Reduce Nitrogen Oxides 1990s IGCC Demonstrations 1990s Clean Air Act Amendments 2000s Phase 2 Clean Air Act 80% Path to Near-Zero Emissions

28 Clean Coal Green Coal Green Coal Provides Path to Near-Zero Emissions Supercritical Plants Carbon Capture and Storage (CCS) Demonstrations Commercial Coal-to-Gas with CCS Commercial Coal-to-Liquids with CCS Commercial IGCC with CCS Oxyfuel, carbon-consuming consuming algae and other low-carbon technologies Retrofit Pulverized Coal 84% Plants with CCS 2008 Path to Near-Zero Emissions 28 28

29 Japan Home to World s Most Advanced Coal Fleet Japan Already Most Energy Efficient Economy in the World Averag ge Efficien ncy of Co oal-based Electrici ity Efficient Plants Reduce CO 2 Emissions, Increase Energy Security * Organization for Cooperation and Development.

30 Supercritical Technology Offers Cost Advantage Globally Technology Reduces CO 2 Emissions Rate 40% Over Oldest Fleet US$ / MW Wh Coal - Ultra Super Critical Gas - CCCT Large Hydro Nuclear - AP 1000 Onshore Wind Solar PV Source: International Energy Agency 2010, Projected Costs of Generating Electricity.

31 CCS for EOR Will Drive Down Technology Costs Coal s CO 2 Content as the Preferred Feedstock Over the next 30 years: 87 billion barrels in stranded oil could be recovered in the U.S. alone CO 2 is a necessary feedstock for EOR Maximum needed: 14 billion tons of CO 2 7 billion tons of coal Source: National Energy Technology Laboratory, U.S. Department of Energy, Storing CO 2 and Producing Domestic Crude Oil with Next Generation CO 2 -EOR Technology, Jan. 9, 2009; International Energy Agency: Coal-Fired Power Generation: Replacement/Retrofitting Older Plants, 2008; Management Information Services and Peabody analysis.

32 Coal with CCS is the Best Global Low-Cost, Low-Carbon Solution Coal with CCS Outperforms Alternative Baseload Options 3-to to-1 National Research Council, Endorsing Green Coal The overall energy enterprise, like a massive ship, will be slow to change course The urgency of getting started on demonstrations cannot be overstated. International Energy Agency Objectives cost additional $1.3 trillion by 2050 European Commission Environmental goals cost 40% more without CCS

33 GreenGen is Steel in the Ground, Symbol for the Globe Tianjin Site of Near-Zero Emissions, 21 st Century Coal in 2011 GreenGen global model for low-cost, low-carbon coal Multi-phase power project with carbon capture Among world s largest near-zero emissions projects First 250 China s MW GreenGen unit Power Project on line in 2011

34 Japan s Path is the World s Path: Technology Solutions to Achieve 3Es Ensure at least half of new generation from coal Replace older coal fleet with supercritical plants Develop 100 CCS projects in a decade Deploy coal-to-gas, coal-tochemicals, coal-to-liquids Commercialize near-zero emissions technology

35 Coal in Japan and the World Our Collective Energy Future Fred Palmer Chairman World Coal Association Clean Coal Day in Japan 2011 International Symposium September 6, 2011