Coal power will continue being the dominant source of electricity for several more decades despite aggressive pursuit by renewable energy, according to investors in the industry.
New investments in South Asia and the Middle East, as well as increasing interest from Sub-Saharan Africa including Kenya, are likely to maintain coal’s stranglehold on the power market, where it holds 40 per cent of the world’s energy output.
Global energy solutions firm, GE Power, projects that even with a dynamic power mix that is shifting towards green sources, coal-fired power will only fall to about 30 per cent of global production in the next decade.
The outlook may seem optimistic against the background of a slowdown in demand in Europe and America, and surging opposition to the fossil fuel, especially from conservationists who cite coal’s damaging effects on the environment.
But it is backed by new technology that has managed to substantially reduce emissions from coal-fired plants, such as ultra-supercritical (USC) technology by GE.
“In terms of efficiency, this technology delivers up to 10 per cent greater efficiency than other installations in the market,” says GE Power commercial general manager for steam power, Sacha Parneix.
This has endeared the fuel to new investors and increased appetite among those already using it. In Malaysia, for instance, coal is only second to natural gas as a major source of energy, with the landscape set to change in the next few years.
Heavy investments in power plants have tilted in favour of coal, including a 3,100-megawatt plant that sits on reclaimed land on the shores of the Strait of Malacca, owned by State energy firm TNB. The facility’s production is larger than Kenya’s total installed capacity of about 2,300MW from all energy sources.
Among the five plants that make up the TNB Janamanjung facility is the 1,000MW Manjung 4, the first in South East Asia to use GE Power’s USC technology. GE led the plan’s construction and supplied the equipment including boiler, steam turbine and generator.
“The use of USC technology enables Manjung 4 to convert coal more efficiently, burning less coal for more power while complying with emission standards,” said TNB Janamanjung Managing Director Datuk Shamsul during a tour of the plant by journalists last week. “The plant also meets stringent environmental standards set by the Wolrd Bank.”
Coal-fired steam power plants burn the fossil fuel to heat up water to steam, which then turns turbines to generate electricity. It is this process, which produces harmful pollutants such as carbon dioxide and sulphur dioxide, that fuels the opposition to coal power. To address these concerns, USC technology aims to reduce emissions by burning less coal, thus releasing fewer by-products.
“In the energy sector today, two things are critical; having the best technology to help our customers meet their needs in a changing landscape and having the best partners to work together to build plants that help economies grow and make lives easier for millions of people,” says Andreas Lusch, chief executive of GE’s steam power business.
Renewable energy such as wind and solar has distinct advantages over fossil fuels in terms of emissions but technological improvements have seen some countries rethink their policy on coal.
Germany, which had retired its coal plants to go green, recently built a new coal power plant that is said to be the most efficient in the world, using the GE platform.
Others such as Kenya seek to have coal-fired steam power as part of the baseload energy as the country aims to double its installed capacity within 10 years, with a planned coal power plant set to be constructed in Lamu by a local consortium, Amu Power.
Kenya has for decades been dependent on hydro-power but long periods of drought have rendered the energy source less reliable even as demand increases.
“As it stands, Kenya’s energy mix needs to be sustainable to guarantee absolute energy security. Due to climate change, pollution, human encroachment within water towers and diversion of water sources for agricultural use, rivers are quickly becoming seasonal and cannot be relied upon for energy generation,” says Amu Power Chief Operating Officer Cyrus Kirima.
With the improvements in technology, investors in coal power are gaining more confidence about the sustainability of their business.
“Right now coal is providing more competitive costs than renewable energy, at least in Malaysia, but there is more aggressive effort by the renewable energy providers to push the prices down and be more competitive,” said Mr Shamsul. “But to replace big providers like us? It will take quite a number of years.”