As the world moves to combat climate change, it’s increasingly doubtful that coal will continue to be a viable energy source, because of its high greenhouse gas emissions. But coal played a vital role in the Industrial Revolution and continues to fuel some of the world’s largest economies. This series looks at coal’s past, present and uncertain future.
Coal is the greatest contributor to climate change of all our energy sources. This means that if the world acts to limit global warming to well below 2℃, coal will likely be constrained – unless its greenhouse gas emissions can be removed.
One of the great hopes of the industry is carbon capture and storage (CCS), a way to burn coal, remove the carbon dioxide (CO₂) emissions and store it safely away from the atmosphere. While there have been several breakthroughs, the technology remains expensive.
Advances in energy technologies mean that adding CCS doesn’t just need to work; it needs to work at a lower cost than its growing legion of competitors. And while the alternatives are good news for avoiding dangerous climate change, it’s a substantial challenge for the coal industry.
The current range of CCS technologies can be grouped into “pre-combustion” and “post-combustion” methods.
Pre-combustion methods typically react the carbon in the fuel with high-pressure steam to make hydrogen CO₂. The CO₂ is then separated (captured) from the hydrogen before the hydrogen is burned in the power station to make energy, with the only emissions being water vapour.
Post-combustion technologies try to capture the carbon after it has been burned and becomes CO₂. If the fuel is burned in air, then the CO₂ needs to be separated from the exhaust gas stream which, like air, is mostly composed of nitrogen gas. This is usually done by passing the gas stream through a liquid that dissolves the CO₂ but not the nitrogen.
Another technique, called “oxyfuelling”, separates oxygen out of the air and then uses it to burn the fuel in an atmosphere of oxygen and recycled CO₂. The exhaust gas stream from this process is close enough to pure CO₂ that it can be sent directly to the storage process.
Several options have been explored for storing the carbon. These include the deep ocean, depleted oil and gas wells, deep saline aquifers, as manufactured mineralised carbonate rock, or as naturally mineralised carbonate by injection into basalt reservoirs.
Regardless of the technique, the outcomes for coal combustion are similar. The amount of emissions is reduced by 80-100%, while the cost of coal-fired electricity generation increases by at least the same amount.
These costs come from building the capture plant, CO₂ transport pipelines and the sequestration plant. More than double the amount of coal must be burned to make up for the energy cost of the CCS process itself.
When CCS was first considered as an emissions solution, competition from renewables, such as solar and wind, was weak. Costs were high and production volumes were negligible.
In the 1990s, many believed that renewables (other than existing hydro, geothermal and biomass for heating) might never be able to replace coal cheaply. The future of energy was going to be a centralised grid, rather than the distributed power models being discussed today, and there were only two widely backed horses in the technology race: CCS and nuclear.
But the early part of this century has seen an energy revolution in both renewables and fossil fuels. Among renewables, solar and wind have both taken enormous strides in reducing production costs and building manufacturing scale.
For fossil fuels, the expansion in gas pipeline infrastructure, the development of liquefied natural gas (LNG) shipping and the growth of both conventional and unconventional gas production have encouraged fuel switching from coal in European and US markets in particular.
Trying to compare the costs of different types of electricity can be tricky. Power stations require capital to build and have heavy financing, operational and decommissioning costs. Nuclear and fossil fuel power stations also have to buy fuel.
Analysts use the term “levelised cost of electricity (LCOE)” to aggregate and describe this combination of factors for different methods of electricity generation.
A significant challenge for coal and CCS is that the LCOE for wind and solar at a comparable scale is already competitive with coal generation in many places. This is because the cost of manufacturing has fallen as production has increased.
While this seems not to bode well for coal and CCS, there’s a caveat: a coal with CCS power station makes power when the sun doesn’t shine and the wind doesn’t blow.
It’s easier for wind and solar to compete when traditional fossil fuel power stations are there to back them up, but not so easy when renewables become dominant generators and the cost of storage needs to be taken into account to ensure a consistent supply.
A game changer?
That was until batteries came along and offered the ability to store renewable energy for when the sun doesn’t shine. There is considerable hype around the entry of the Tesla Powerwall into the home electricity market.
The emerging breakthrough of these products is the price, which is bringing batteries into the realm of competition with centralised electricity generation.
While a battery won’t take your family entirely off-grid at first, such batteries mean most suburban households can become largely energy-independent. They need only top up from the grid now and then when a run of cloudy days comes along during the shorter days of winter.
In the longer term, there’s a clear pathway for most homes to disconnect completely from the grid, should battery prices continue to fall.
Why are batteries a threat?
The reason that batteries can compete with centralised generation is because the cost of transmission and distribution from a coal-fired power station to your home is considerable.
These costs are not normally considered in the LCOE calculations, because it is assumed that all power generators have access to the same, centralised electricity grid.
But a battery in your home means that these costs are largely avoided. That makes home energy generation and storage much more competitive with traditional power generation in the longer term.
For developing nations without a strong centralised grid it also means that energy systems can be built incrementally, without large investments in infrastructure.
This is an ill wind for the competitive future of CCS, which depends on the centralised generation model and a lack of low-cost competitors to stay viable.
That doesn’t mean the coal industry should give up on CCS. Having a range of options for a low-emission future is a good thing. Affordable energy is at the heart of our modern civilisation and standards of living.
CCS may also lay the foundations for Bioenergy with Carbon Capture and Storage (BECCS), one of the few (albeit expensive) technologies with the potential to recoup significant amounts of CO₂ from the atmosphere. But this points to a renewable biomass future, not a coal future.
The odds that CCS will keep coal alive as an industry into the future are getting longer each year.
What we are seeing is the start of the great transition from fossil fuel mining to manufacturing as the basis for our energy systems. It’s not dominant yet, but you would be starting to get very nervous if you were betting against it.
Authors: Gary Ellem, Conjoint Academic in Sustainability, University of Newcastle