LAUNCESTON, Australia, Oct 9 (Reuters) – Coal-fired power has to end by 2050 to save the planet. That seemingly simple but bold sentiment is likely to set much of the political, social and economic agenda for the coming decades, but in the end it will come down to what China does.

The United Nations Intergovernmental Panel on Climate Change (IPCC) said in a report on Monday that "unprecedented" changes will have to take place to limit the rise in the Earth's temperature to 1.5 degrees Celsius (2.7 degrees Fahrenheit), warning of devastating weather events and species loss if the target is exceeded.

In order to achieve the goal, the IPCC said coal burning would have to drop to between zero and 2 percent by 2050, while even natural gas, coupled with carbon capture and storage (CCS), would have to decline to 8 percent of electricity generation by the middle of this century.

While coal has long been the bogeyman of climate activists, the IPCC has effectively thrown down the gauntlet and given world leaders a little over 30 years to phase it out entirely.
Initial reaction to the IPCC report has been predictable, with supporters of renewable energy cheering it, and backers of fossil fuels resorting to the familiar arguments that somehow the science is either wrong or a hoax.

Australia's Environment Minister Melissa Price told ABC radio on Tuesday that the IPCC was "drawing a long bow" by calling for an end to coal by 2050, and touted new technologies as a way of saving the polluting fuel.

Australia is the world's largest exporter of coal and relies on the fuel for more than 70 percent of its electricity generation.

Price isn't alone in touting CCS and other technologies, with the World Coal Association responding to the IPCC report by saying in a statement on its website that CCS is "vital" and that the coal lobby group will push for it to be adopted.

However, elsewhere on the group's website it acknowledges that currently progress of CCS "is too slow to allow necessary emissions reductions goals to be achieved".

Its solution is to spend more on research and development. But it's here that the coal lobby will run into problems.

Already renewable technologies, which have benefited from subsidies, are becoming cheaper than conventional coal-fired power generation, a trend likely to continue.

Coal-fired generation with CCS would likely require huge subsidies in order to be cost-competitive and selling such largesse with public money will be incredibly hard for governments in democracies.

It's therefore likely that the scenario currently being played out in Europe will be extended to other parts of the world, with coal-fired power being replaced by a combination of renewables, battery storage, gas-fired back-up and even nuclear.

Coal will further be hamstrung by the flight of capital from the sector, with commercial and development banks, insurers and trading companies starting to retreat from financing and insuring mines and power plants.

Debate should switch to Asia
While it's likely that the developed world will witness ongoing bitter debates over policy toward fossil fuels, the actual key to the IPCC target is China, and to a lesser extent the rest of developing Asia.

China is the world's largest producer, consumer and importer of coal and any genuine attempt to remove coal from the world's energy mix by 2050 will require massive commitment from Beijing.
While the Chinese government has a policy of limiting the use of coal and of boosting the use of renewables and natural gas, it's well within the realms of wishful thinking to imagine the world's second-largest economy is on track to abandon the use of coal by 2050.

According to the Global Coal Plant Tracker, China currently has 957 gigawatts (GW) of coal-fired power operating – more than four times India's 219 GW.

The positive news for both China and India, the world's second-biggest coal importer, is that the pipeline of coal-fired plant construction has been consistently shrinking and retirements of older units has been accelerating.

But given that once built, coal-fired plants generally operate for at least 30 years, it would be imperative that virtually all construction is halted now, and no new plants commissioned.

In reality, China currently has 126 GW of coal-fired power in construction and 76 GW either announced, in pre-permit phase or with permits already in place. India has 39 GW being built and 63 GW in the approval process.

There are also new coal plants being built or planned in numerous other Asian countries, including Indonesia, Pakistan and the Philippines.

What the IPCC report may do is accelerate pressure on those countries to re-think their power generation plans, especially if renewables can be shown to be as cheap and as reliable.

It's also likely that any technological advances in energy in the next decades will not be in favour of coal, given that vast sums are being invested in renewables and comparatively little in CCS or other coal-friendly technologies.

The IPCC report highlights that coal now has its back very much against the wall, but equally that the real power for change lies in Beijing.

Natural gas also tends to get off lightly in much of the media reporting about climate change, especially given the obvious target of coal.

But like silent flatulence in an elevator, eventually natural gas will be unable to avoid the attention that is making life so difficult for the coal industry.

(By Clyde Russell; Editing by Kenneth Maxwell)

Published Date:2018-10-10