Significant price differences between regional natural gas markets have driven many European countries to increase coal consumption while decreasing use of natural gas (Source: BP).

Coal, natural gas, and oil accounted for 87 percent of global primary energy consumption in 2012 as the growth of worldwide energy use continued to slow due to the economic downturn. The relative weight of these energy sources keeps shifting, although the change was ever so slight. Natural gas increased its share of global primary energy consumption from 23.8 to 23.9 percent during 2012, coal rose from 29.7 to 29.9 percent, and oil fell from 33.4 to 33.1 percent. The International Energy Agency predicts that by 2017 coal will replace oil as the dominant primary energy source worldwide.

The shale revolution in the United States is reshaping global oil and gas markets. The United States produced oil at record levels in 2012 and is expected to overtake Russia as the world’s largest producer of oil and natural gas combined in 2013. Consequently, the country is importing decreasing amounts of these two fossil fuels, while using rising levels of its natural gas for power generation. This has led to price discrepancies between the American and European natural gas markets that in turn have prompted Europeans to increase their use of coal for power generation. Coal consumption, however, was dominated by China, which in 2012 for the first time accounted for more than half of the world’s coal use.

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China, coal, Europe, India, natural gas, oil, Russia, shale gas, United States

Here at the Asia Clean Energy Forum in the Philippines, President Obama’s speech on climate change has been greeted with enthusiasm.  In particular, his decision to redirect U.S. financing of coal fired power plants to expanding the use of clean energy in developing countries is seen as a signal that the U.S. understands that coal is risky and expensive—at a time when the costs of biomass, geothermal, solar, and wind power are declining rapidly.

The positive reaction to Obama’s initiative is hardly surprising: many Asian countries share the U.S. President’s concern about climate change: recent fires, droughts, and typhoons have devastated large areas, stirred public concern, and spurred governments to act.

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coal, energy policy, renewable energy, renewable energy finance, Southeast Asia, United States

“I refuse to condemn your generation and future generations to a planet that’s beyond fixing. And that’s why today I’m announcing a new national climate action plan, and I’m here to enlist your generation’s help in keeping the United States of America a leader, a global leader in the fight against climate change.”

- President Barack Obama, 6/25/2013

President Obama presented his Climate Action Plan at Georgetown University yesterday. (image source: whitehouse.gov)

President Obama presented his Climate Action Plan at Georgetown University yesterday. (image source: whitehouse.gov)

Climate change policy is back on the political agenda.  In a powerful speech at Georgetown University yesterday, President Barack Obama found the right words for the scale and urgency of the climate problem. He announced a Climate Action Plan outlining a wide array of actions his administration will take to reduce harmful greenhouse gas (GHG) emissions, expand renewable energy, increase energy efficiency, and strengthen America’s resilience to climate impacts. Throughout the speech, President Obama struck down critics’ claims, which have been bolstered by wealthy special interest groups, that climate protection poses a threat to the country’s economy. If implemented promptly, the plan can lead to much needed reductions of greenhouse gas emissions and re-engage the United States with other climate leaders in the international community.

However, the plan also reinforces the President’s “all-of-the-above” energy strategy, which is at odds with the necessity for swift and significant emission reductions to avoid catastrophic climate impacts. President Obama yesterday restated his pledge to reduce U.S. GHG emissions by 17 percent below 2005 levels by 2020 – an insufficient target given the urgency of the climate crisis and the scale of the U.S. contribution to global emissions on an absolute, historical, and per capita basis.

Perhaps the most important policy announcement in the President’s climate action plan is a memorandum directing the Environmental Protection Agency to set standards by 2015 to reduce carbon pollution from existing power plants. The U.S. Environmental Protection Agency first proposed carbon standards for new power plants over a year ago that would effectively halt the construction of new coal plants without carbon capture and storage (CCS) technology. Although the shale gas boom has already made it unlikely that new coal plants would be built anyway, the proposed regulation would nevertheless be an important step toward passing carbon standards for existing power plants that could accelerate the phase-out of coal power.

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carbon standard, CCS, Climate Change, Climate Policy, coal, greenhouse gas emissions, Keystone XL, nuclear power, President Obama, renewable energy, shale gas

In Berlin on Wednesday, President Obama emphasized America’s moral obligation to do more to avert a future of “more severe storms, more famine and floods, new waves of refugees, coastlines that vanish, oceans that rise.” Speaking from Washington, D.C., the top White House climate change adviser, Heather Zichal, followed this statement of intention with hints at more concrete actions, suggesting that President Obama will be implementing carbon dioxide regulations for existing power plants when he reveals his climate change strategy either on Tuesday or in the upcoming weeks.

President Obama, speaking in Berlin last week, reaffirmed commitment to action on climate change. (Source: Flickr user, Matthias Winkelmann)

The regulations on carbon emissions emitted by power plants, the largest individual point sources of carbon pollution in the United States, will be a conscientious step forward. However, with the carbon pollution standard for new power plants still under review, having been delayed past its original intended ruling date in April, the anticipated proposal for existing power plants will not only be even more costly and time consuming, but will likely be met with stronger resistance from Republicans, Democrats, and industries who are worried about the future of coal, slower job growth, and higher energy costs.

These power plant standards come at a time when concerns over climate change impacts are rising significantly.  In order to meet the 2°C Scenario – the official target of the United Nations Framework Convention on Climate Change (UNFCCC) to avoid serious climate change and irreversible damage – the United States would need to at least halve its current emissions (total 6.7 billion metric tons CO2 in 2011 and 5.3 billion metric tons CO2 in 2012), of which power plants accounted for 2.2 billion tons in 2011 and around a third in 2012.

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carbon standard, Climate Change, coal, emissions reductions, EPA, Germany, low-carbon, power plant, United States

In March 2013, the National Energy Administration (NEA) of China issued a Notice to urge development of wind-to-heat projects in northern China. This practice aims to reduce the waste of wind power and cut emissions from the coal-fired central heating system. Experiments have been carried out and the approach is going to be scaled up, but further innovations are needed to really shake the dominance of coal.

The niche for large-scale wind-to-heat

Figure 1. China’s installed wind power generation capacity, and average operation hours of the turbines from different sources (click image to enlarge graph).

According to the Chinese Wind Energy Association (CWEA), China’s total installed capacity of wind power jumped to 75.3 gigawatt (GW) by the end of 2012, while the annual installed capacity was 13 GW, nearly 27percent lower than that of 2011 (See Figure 1). This may reflect bottlenecks, such as growing wind curtailment, faced by the industry.

Since 2010, the operating hours of wind turbines have been decreasing (See Figure 1). Combined with growing generation capacity, wind curtailment in 2012 reached 20,000 gigawatt hours(GWh), nearly doubled the curtailed production of 2011.

Jilin Province is a region with one of the highest curtailment rates. Winter nights see high wind speed but low electricity demand, and the local grid’s flexibility for peak electricity management is limited. As a result, wind farms in Jilin Province, which have a total generation capacity of 3.3 GW, were generating for only 1,420 hours in 2012. This was much lower than the industry-adopted economic minimum of 1,900 hours.

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China, coal, curtailed wind, heating, renewable energy, wind power, wind-to-heat

The full text of this Vital Signs Online article can be found here.

Demand for both coal and natural gas continue to increase globally. (Source: Viral Blender)

Oil remains the world’s leading energy source – for now. In recent years, coal and natural gas have proven themselves increasingly important resources across the globe. Global consumption of coal increased 5.4 percent in 2011, to 3.72 billion tons of oil equivalent, while natural gas use grew 2.2 percent, to 2.91 billion tons of oil equivalent. Both are primary fuels for the world’s electricity market, and because they are often used as substitutes for one other, their trends need to be examined together.

The bulk of coal use is for power generation, with smaller amounts being used in steelmaking. Spurred mainly by rising demand in China and India, coal’s share in the global primary energy mix reached 28 percent in 2011—its highest point since the International Energy Agency began keeping statistics in 1971. Although the United States remains one of the world’s largest coal users, just over 70 percent of global demand in 2011 was in countries outside of the Organisation for Economic Co-operation and Development (OECD), including China and India. Consumption in non-OECD countries grew 8 percent in 2011 to 2.63 billion tons of oil equivalent.

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coal, global, natural gas, Vital Signs Online

I visited Berlin a week after President Obama’s reelection, and came away envious of the strategic clarity and political consensus that mark Germany’s new energy strategy. After months of watching Democrats and Republicans bash each other with vacuous and contradictory rhetoric about where our country’s energy future lies, it was refreshing to see that one of our key allies has a plan—and is implementing it.

Despite having a relatively weak solar resource, strong domestic policy has enabled Germany to dominate the global solar PV market (Source: REN21).

In 2012, Germany got more than 25 percent of its electricity from renewable energy, up from 5 percent in 1995 and 10 percent as recently as 2005. Since 1995, the U.S. share of renewable electricity has hardly budged—going from 10 percent to 11.5 percent.) At the same time, Germany has rapidly increased its energy efficiency, and reduced its carbon dioxide emissions and dependence on imported fossil fuels. Government plans are even more ambitious—at least 80 percent of the nation’s electricity is to come from renewables in 2050.

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China, Climate Change, Climate Policy, coal, energy policy, France, Germany, green transition, Italy, nuclear, renewable energy, solar power, United States, wind power

Figures for the first half of 2012 show a remarkable shift in U.S. energy trends. Coal-fired power generation has plummeted to 20 percent below last year’s level and 31 percent below the peak reached in 2007.  Far from being the fossil fuel of the future (according to many industry leaders and even some environmentalists) American coal may now be in an irreversible downward spiral.

Coal’s decline has two main causes.  Electricity use has virtually leveled off in the United States since the great recession began in 2008, leaving many U.S. utilities with excess generating capacity and more latitude to choose which of their power plants will operate.  Meanwhile, the rapid decline in U.S. natural gas prices this year—averaging the equivalent of $13 per barrel of oil—has allowed utilities to fire up some of their newer and more efficient gas plants while idling many of their coal plants.

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Climate Change, coal, electricity, emissions reductions, natural gas, United States

Last month, the Indian Parliament devised legislation to replace the archaic Land Acquisition Act of 1894, the British colonial-era law that dictates terms for government acquisition of private land. The new law, which would be renamed The Right to Fair Compensation, Resettlement, Rehabilitation and Transparency in Land Acquisition Act, aims to address India’s chronic land disputes between developers and local communities (which I addressed in part in a previous blog on coal energy in India). The legislation is currently being reviewed by a Cabinet committee due to concerns expressed by several Cabinet ministers that the conditions stipulated for land acquisition are too steep for industry.

Industry interests hope that the new law will streamline the existing land acquisition process and resolve ongoing delays to project development. The legislation under negotiation would allow not only government but also private companies that provide “public” services to acquire land for industry and infrastructure projects, provided that they (1) obtain consent from at least 80 percent of affected landowners, (2) provide compensation at two to four times the market value for rural land and two times the market value for private land, and (3) assist displaced persons with resettlement.

Despite the more concrete procedure for land acquisition outlined in this draft legislation, some business groups, including the Confederation of Indian Industry, complain that the provisions will increase costs to industry and make some projects unviable. It is with these industry interests in mind that the Cabinet committee is reviewing the legislation.

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coal, development, India, land acquisition, land use, negotiations

Last week, I attended a Washington event on Arctic energy; I was hoping for some insights on the challenges ahead, namely greenhouse gas emissions, diplomatic tensions, and indigenous rights. Since Arctic exploitation hasn’t yet enjoyed a “Keystone XL” level of public attention, it seemed healthy to get some first-hand information from Arctic experts, as major oil players like Shell are getting closer to full-scale commercial exploitation. After all, a generation’s treasure chest often turns out to be another generation’s ticking bomb.

Instead, I ended up listening to lengthy presentations by analysts, consultants, fellows and executives talking about climate change “removing constraints”, “effective diplomatic work” being made, and “supply chain complexity” hampering the process, for a solid two hours. There’s a saying in the marketing industry that ‘eco-friendly’ should be the third button to push when advertising a product, after, say, affordability or quality. In this discussion, ‘eco-friendly’ was clearly the fourth or fifth button, if it was mentioned at all. One should have expected this, however, as the event invitation used no apparent irony when announcing in the same sentence that Arctic experts would examine “what nations can do to protect the environment andincrease production” (my emphasis).

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arctic, Climate Change, coal, developing countries, emissions reductions, energy security, low-carbon, peak oil, renewable energy, Unconventional oil, United States