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Between the Lines: Forget Scargill's Legacy, Old King Coal Can Yet Be the Fuel of the Future

Posted on: Wednesday, 25 January 2006, 09:00 CST

By George Kerevan

WORRIED about rising oil prices or the Russians turning off the gas? Then try coal. After 20 years in which Britain wrote off the black stuff as Arthur Scargill's legacy, and the UK power industry made a "dash for gas", coal is due for a major comeback. So far, the energy debate in the UK has centred on renewables versus nuclear power. However, coal is far cheaper than both and has the added advantage of being on our doorstep - dig a hole practically anywhere in Central Belt Scotland and you will find the stuff.

Globally, demand for coal has been skyrocketing as a substitute for dearer oil and gas in electricity generation, and because of increasing applications in modern steel production. Coal also comes from stable regions such as Australia and the United States. And with around 300 years worth of reserves globally, we are not about to run out of supplies.

World production of hard coal jumped by nearly 10 per cent in 2004 and continued to grow through 2005, with China and India being big importers. Eighty per cent of China's electricity comes from coal, and the country plans over 500 new coal-fired power stations to meet demand. As a result, coal prices surged dramatically in 2005.

The good news is that prices may stabilise a bit in 2006, largely as a result of producers beginning to respond to demand by upping supplies. New exporters are emerging: Vietnam boosted foreign coal sales 53 per cent by volume last year, while exports of steam coal from Russia's Baltic ports to Western Europe rose by 13 per cent.

In the UK - contrary to what most people probably think - coal still accounts for roughly a third of electricity generation. We use about 60 million tons of coal a year in Britain, three quarters of which is burned to generate electricity. Around 25 million tons of this coal is still produced locally, with 12.5 million tons coming from deep-mined production in England; the rest is opencast.

However, UK coal output is falling dramatically as deep mines (such as Longannet in Fife) are closed for lack of investment and opencast operations are strangled by environmental rules.

In other words, the UK is busy closing down its domestic coal industry just as a global boom in the sector is taking off. Here in Scotland, we have a staggering 200 years worth of coal under our feet. Yet the main generator, Scottish Power, plans to close its Longannet and Cockenzie coal-fired stations by 2015, having decided it is too expensive to install the emission filters required by new European regulations.

Here is a question: why are we content to subsidise wind power and nuclear energy for environmental reasons, but not subsidise the indigenous coal industry for the same reason?

For the record, clean coal is no longer an oxymoron. A host of new technologies is now available to reduce or eliminate and other pollutants emitted when burning coal. And guess where they are making this technology? Here in Scotland.

Mitsui Babcock, which employs 1,000 workers at Renfrew, is Britain's sole surviving manufacturer of steam-generation equipment. It has pioneered the development of new "super critical" boilers. These work by raising the pressure and temperature of steam to super levels, making more electricity from less coal, thus reducing emissions. These plants are also designed to mix coal with biomass, producing a reduction of 40 per cent in conventional greenhouse gas emissions.

Unfortunately, Mitsui Babcock has been unable to sell its new technology in Britain (though the Chinese are buying by the fistful). This is because the generators think the government is fixated on renewables and nuclear plant, which it is. Once again, Scotland's manufacturing base is considered politically expendable.

Another clean coal technology being developed in Scotland is underground coal gasification (UCG). This involves drilling a bore hole down to the coal seam and then along it. Oxygen is then squirted into the hole to allow a controlled burn backwards along the seam. The resulting hot gasses shoot up under pressure through a second bore hole and are passed through a turbine to generate electricity. So no need to scar the countryside with opencast mining.

Scottish Enterprise and Scottish & Southern Energy are currently funding a feasibility study for a pilot UCG plant in Fife. The study is being conducted by Professor Brian Smart of Heriot-Watt University's Institute of Petroleum Engineering. According to Smart: "The Forth basin is probably one of the best sites in the world for such a project, as it combines the offshore location of extensive coal reserves with the opportunity to drill from on-shore, as well as being close to the infrastructure that would consume the power generated."

Then there is carbon capture and storage (CCS), which aims to extract all the carbon from emissions and pump it underground. Scotland is well placed to exploit CCS: redundant North Sea oil seams would provide enough geological capacity for all the produced from European power stations while increasing the industrial life of the North Sea itself.

Last June 2005, Scottish & Southern, together with BP, ConocoPhillips and Shell, announced the world's first industrial scale project to generate "carbon-free" electricity using CCS. Power will be generated at Peterhead and the resulting pumped into the mature Miller oilfield (incidentally creating extra pressure to force out more oil). This scheme is intended to burn natural gas rather than coal, but in principle there is no reason why the same CCS technology should not be used for both fuels.

The problem with coal is that it suffers from an unwarranted bad reputation. But Britain needs an energy mix and coal is cheap, safe, local and much more clean than it was. And, as we watch Lexmark go down the tubes in Fife, reviving Scotland's coal industry could be the way to save our hi-tech manufacturing sector.

Black is definitely the new green.

Source: Scotsman, The

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