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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