Cheap Coal Is Dead

July 1st, 2012 by Zachary Shahan

Carl Pope, former chairman of the Sierra Club, has an excellent series on “Cheap Coal Is Dead” over on Bloomberg. Here are a handful of key facts and quotes from Part 1:

“In March, the power generating arm of India’s largest conglomerate, the Tata Group, announced that it was shifting its investment strategy from coal-fired thermal plants to wind and solar renewable projects. Coal projects, Tata said, were becoming ‘impossible’ to develop, and investment in them had stopped.”
“While coal is geologically more abundant than oil, cheap coal, close to population centers, is not. The biggest coal- producing region in the U.S. — the Powder River Basin — can get coal out of the ground for about $12 a ton. It costs roughly $60 a ton to ship it to power plants in the Ohio Valley. China’s vast reserves near Inner Mongolia can be mined for $25 a ton. But by the time it travels by rail across North China, then by sea to southern coastal cities, the cost rises to more than $125 a ton.”
“China and India, which had been counting on buying coal for $40 a ton, now find that imported coal at $120 a ton is ‘cheap.’ Dozens of coal plants in China and India cut back capacity because of fuel costs and shortages. Indian power companies scrapped 42 gigawatts worth of new power plants. The Reserve Bank of India warned investors that coal projects were very risky.”
“India and China, respectively, are home to some of the world’s largest coal reserves. They are the fastest-growing global coal markets. But most of their coal is distant from their booming coastal regions. Their rail systems are inadequate to ship the volumes needed to fuel existing needs, much less the growth expected by 2020. And shipping coal by rail is expensive. Most of the cost of coal is not wages, but diesel fuel used either to mine or transport it. As oil grows more expensive, it drags the price of coal up with it.”
“China’s wind industry is eager to provide power at prices ranging from 7 cents a kilowatt-hour to 13 cents, and India’s latest solar projects are bid at 15 cents. Costs of wind and solar continue to decline.”

For much more, great stuff, check out Carl Pope full piece: Cheap Coal Is Dead. Long Live Renewables. (Part 1).

Image Credit: coal crushed via Shutterstock

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Tags: cheap coal, China, china coal, India, india coal, quickies

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

jburt56

Unfortunately coal may not stay dead. We’re still waiting to see if its fate is like that of Generalissimo Francisco Franco who Chevy Chase assured a nervous world was “still dead.”
- http://cleantechnica.com/ Zachary Shahan
  
  i’m still nervous
  
  … about coal, that is.
David Fuchs

Next time Google “china coal cap 2015″

http://www.chinaeconomicreview.com/node/56533
- Daimon Sweeney
  
  I know and love Google. This time asking here made more of a conversation, even including this exchange (and thanks for the link btw, which informs everyone). Don’t be a snob – there’s more than one way. And I like your comment below.
David Fuchs

Amusing as all hell. Coal is becoming more expensive, PV prices are coming down, PV efficiency is going up, cheap roll process (spray on) batteries have happened, and graphene with 10 – 20 nm micropores can increase the storage capacity of batteries 10 fold.

It won’t be long before PV solar, with storage, is cheaper than your yearly energy bill.
- http://neilblanchard.blogspot.com/ Neil Blanchard
  
  That time cannot come soon enough! Electricity from renewables is the future, and our future hinges on how quickly we can make the switch.
  
  Neil
- http://cleantechnica.com/ Zachary Shahan
  
  in 20 years, we could see a very transformed energy landscape.
Bridget McGrath

As a business owner with several turbine generators operating in a small space (I own a carbon-neutral gym with generators on each of the spin bikes), I completely understand the noise issue of wind turbines in heavily populated areas, where energy is needed most. However, I’ve always felt the benefit outweighed the nuisance. If wind turbines could be a bit more neighborhood friendly, I see an excellent opportunity for an eco-savvy developer to build alternative energy landscaped communities with reusable water filtration rooftop gardens, wind-turbine “trees”, solar sculptures, etc, all with geo-thermal heated smart houses. Like Eureka without all the near-death experiences! Ah, that would be cool.
Bridget McGrath
Elevated Fitness
http://www.elevatedtahoe.com
- Luke
  
  Hi Bridget,
  If you’re looking for more ‘user friendly’ turbines, take a look at some of the different types of wind turbines, such as VAWTs (Vertical Axis Wind Turbine), which don’t have a pivot point.
  
  Specifically – the Darrieus & Savonius wind turbines which are more suited for urban areas.
bussdriver78

1. Create coal burning trains – funny that the old trains could return! still risky a investment
2. USA subsidizes coal heavily, including lowering its cost way below $12 per ton- in some cases it is cheaper than dirt.
3. USA has corrupt forces determined to protect those 80k coal jobs well actually its to project a few wealthy coal investors’ jobs.
Ross

How many coal plants are being built a week now? I’ve got to hope that this sort of news about coal being a risky investment will put a serious dent in those numbers.
- Bob_Wallace
  
  In the US, essentially none.
  
  There are a handful which were begun some years ago and now being completed. But as far as I know only one new coal plant has been permitted in the US during the last three years.
  
  China has announced a cap on annual coal consumption starting in 2015. This is a pretty clear signal to their utilities that building more coal plants won’t make sense, there will be no fuel.
  - Daimon Sweeney
    
    Is there a link for that? I’d love to be able to put uncertainty about the future financial viability of coal exported from the US to China into the debate about building the largest coal port anywhere in the Pacific Northwest. The proponents see Jobs! Tax revenue! while the rest of us see local and global environmental destruction and disruption.
    - Ross
      
      Here’s the Cleantechnica story on that from March 2012
      http://cleantechnica.com/2012/03/08/china-to-simply-cap-coal-use-within-3-years/
      - Daimon Sweeney
        
        Thanks.
      - http://cleantechnica.com/ Zachary Shahan
        
        Thanks, Ross!
  - Ross
    
    I found a nice set of slides on Coal at the US DOE site here http://www.netl.doe.gov/coal/refshelf/ncp.pdf
    
    Some take aways from the slides:
    * There’s a huge difference between announced/planned and actually commissioned
    * After a brief upturn new coal build looks like its reversing
    * Slide 16 has data for China and shows a dramatic decline in plants that will be commissioned in the next couple of years in marked contrast to the previously predicted numbers.
    - http://cleantechnica.com/ Zachary Shahan
      
      Thanks a lot.
http://neilblanchard.blogspot.com/ Neil Blanchard

We have probably reached peak coal, then?
- Ross
  
  According to wikipedia, computer says yes more or less.
  
  UK peaked in 1913. Germany in 1958.
  Canada in 1997.
  USA in 1998.
  
  China predicted in 2015 (by Energy Watch Group) US EIA predicts 2030 – the latter sounds to pessimistic given China’s planned cap on coal.
  Australia in 2050 – bet it will peak long before that.
  - Ronald Brak
    
    With competition from solar PV and and our carbon tax that started this month, Australia’s domestic coal use probably peaked last summer (it’s winter here now). As for Australia’s coal exports, Australia will keep exporting coal as long as people keep paying for it. The good news is that a lot of Australia’s exported coal is used in steel production and and at some point demand for new steel in drop in China and India and those countries will use more of their own scrap iron to meet their demand. So at some point, we will reach peak steel. We might be there now, but it’s very hard to say. (Several Australian mining companies are betting we aren’t there yet.)
    - Ronald Brak
      
      Of course, I expect Ross knows it’s winter here.
      - Ross
        
        Indeed although I haven’t visited Australia yet to experimentally confirm.
      - http://cleantechnica.com/ Zachary Shahan
        
        i’m still skeptical. i hear it’s just a big conspiracy to create a one-world govt ruled by Australians. plus, last i heard, the world was flat, so why would they have diff seasons? ;D
      - Bob_Wallace
        
        I think it has something to do with their ability to walk upside down on the bottom of the Earth.
      - http://cleantechnica.com/ Zachary Shahan
        
        That makes sense. My money’s on that.
  - http://cleantechnica.com/ Zachary Shahan
    
    yeah… we had a post on it being as early as 2025 back in 2008: http://cleantechnica.com/2008/04/24/peak-coal-as-early-as-2025/
    
    but as we all know, clean energy has been growing faster than projected.
- http://cleantechnica.com/ Zachary Shahan
  
  perhaps.
Wind supporter

Wonder news!
- Middleageman46
  
  Hurray, Coal is dead.
  
  I can’t wait for $0.35 per KW-H like in prosperous Denmark.
  
  Especially with weeks of 110 degree weather in Tennessee…
  - Bob_Wallace
    
    Well, don’t be a dope. Put some solar panels on your roof.
  - Ronald Brak
    
    For some strange reason, more renewable energy gets build where electricity prices are high than where they are low. Here in Australia too. The state that had the highest electricity prices installed the most wind and solar capacity. It’s weird how it always seems to work like that. Must be some kind of conspiracy.