Articles

The great coal hole
Posted on Thursday, January 17th, 2008

First published in New Scientist, 17 January 2008

There used to be a joke about taking coal to Newcastle but these days the laughing stock is getting the stuff out. Newcastle in New South Wales, Australia, may be the biggest coal export terminal in the world’s biggest coal-exporting country, but even it is having trouble keeping up with demand. The line of ships waiting to load coal can stretch almost to Sydney, 150 kilometres to the south. At its peak last year, there were 80 vessels in the queue, each forced to lie idle for up to a month.

The delays have been lengthening since 2003 – and not just because of the port’s limited capacity in the face of soaring demand. Gnawing doubts are also beginning to emerge about supply, not just in Australia but worldwide, and not only because of logistics but also because of geology. In other words, coal may soon be running short.

Ask most energy analysts how much coal we have left, and the answer will be a variant on “plenty”. It is commonly agreed that supplies of coal will last for well over a century; coal is generally seen as our safety net in a world of dwindling oil. But is it? A number of recent reports suggest that coal reserves may be hugely inflated, a possibility that has profound implications for both global energy supply and climate change.

The latest “official” statistics from the World Energy Council, published in 2007, put global coal reserves at a staggering 847 billion tonnes. Since world coal production that year was just under 6 billion tonnes, the reserves appear at first glance to be ample to sustain output for at least a century – well beyond even the most distant planning horizon.

Mine below the surface, however, and the numbers are not so reassuring. Over the past 20 years, official reserves have fallen by more than 170 billion tonnes, even though we have consumed nothing like that much. What’s more, by a measure known as the reserves-to-production (R/P) ratio – the number of years the reserves would last at the current rate of consumption – coal has declined even more dramatically. In February 2007, the European Commission’s Institute for Energy reported that the R/P ratio had dropped by more than a third between 2000 and 2005, from 277 years to just 155. If this rate of decline were to continue, the institute warns, “the world could run out of economically recoverable …reserves of coal much earlier than widely anticipated”. In 2006, according to figures from the BP Statistical Review of World Energy, the R/P fell again, to 144 years. So why are estimates of coal reserves falling so fast – and why now?

One reason is clear: consumption is soaring, particularly in the developing world. Global coal consumption rose 35 per cent between 2000 and 2006. In 2006, China alone added 102 gigawatts of coal-fired generating capacity, enough to produce three times as much electricity as California consumed that year. China is by far the world’s largest producer of coal, but such is its appetite for the fuel that in 2007 it became a net importer. According to the International Energy Agency, coal consumption is likely to grow ever faster in both China and India.

Another less noticed reason is that in recent years many countries have revised their official coal reserves downwards, in some cases massively, and often by far more than had been mined since the previous assessment. For instance, the UK and Germany have cut their reserves by more than 90 per cent and Poland by 50 per cent. Declared global reserves of high-quality “hard coal” have fallen by 25 per cent since 1990, from almost 640 billion tonnes to less than 480 billion – again more than could be accounted for by consumption.

At the same time, however, many countries including China and Vietnam have left their official reserves suspiciously unchanged for decades even though they have mined billions of tonnes of coal over that period.

Taken together, dramatic falls in some countries’ reserves coupled with the stubborn refusal of others to revise their figures down in the face of massive production suggest that figures for global coal reserves figures are not to be relied on. Is it possible that the sturdy pit prop of unlimited coal is actually a flimsy stick?

That is certainly the conclusion of Energy Watch, a group of scientists led by the German renewable energy consultancy Ludwig Bölkow Systemtechnik (LBST). In a report published in 2007, the group argues that official coal reserves are likely to be biased on the high side. “As scientists we were surprised to find that so-called proven reserves were anything but proven,” says lead author Werner Zittel. “It is a clear sign that something is seriously wrong.”

Since it is widely accepted that major new discoveries of coal are unlikely, Energy Watch forecast that global coal output will peak as early as 2025 and then fall into terminal decline. That’s a lot earlier than is generally assumed by policy-makers, who look to the much higher forecasts of the International Energy Agency, which are based on official reserves. “The perception that coal is the fossil resource of last resort that you can come back to when you run into problems with all the others is probably an illusion,” says Jörg Schindler of LBST.

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According to the Energy Watch analysis, world coal production will peak in around 2025. In that case output would undershoot official forecasts from the International Energy Agency’s World Energy Outlook (WEO) by a substantial margin. Source: Energy Watch Group

A look at how official global reserves are calculated does little to bolster confidence. The figures, compiled by a husband-and-wife energy consultancy called Energy Data Associates based in Dorset, UK, are gathered principally by sending out a questionnaire to the governments of 100 coal-producing countries. Officials are asked to supply figures under clearly defined guidelines, but many do not. “About two-thirds of the countries reply,” says Alan Clarke of Energy Data Associates, “And maybe 50 are usable.”

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Top ten holders of proved recoverable reserves. Source: World Energy Council Survey of Energy Resources 2007

Some countries have been known to make elementary errors filling in the forms, often with the effect of massively increasing their reserves. Undoing these apparently innocent mistakes has led to some of the major downward revisions of recent years.

Although Clarke defends his data as the best available, he is also the first to admit that there are shortcomings. “It’s no secret that the result is a bit of a ragbag. It ranges from well-established estimates for some countries to others that are fairly airy-fairy, and some that are highly political and not to be believed.”

Figures for two of the world’s biggest coal producers are particularly hard to glean. Russia has failed to update its numbers since 1996, China since 1990. “There is really nothing very certain or clear-cut about reserves figures anywhere,” Clarke says. Even senior officials in the coal industry admit that the figures are unreliable. “We don’t have good reserves numbers in the coal business,” says David Brewer of CoalPro, the UK mine owners’ association.

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Annual production in the top ten coal producers. Source: World Energy Council Survey of Energy Resources 2007

Even so, the industry consensus rejects thoughts of an imminent shortage, or “peak coal. Milton Catelin of the World Coal Institute, the international producers’ trade body, admits that he does not understand what has led to the reductions in quoted figures for reserves, but insists that it is not down to a lack of coal. “With regard to coal the world is not resource limited,” he says. “It’s limited only by the economics of recovery and environmental concerns.”

The industry position is born of the traditional view that “reserves” is essentially an economic concept – the amount of coal that could be produced at today’s prices using existing technology. This is not the same as “resources” – the total amount of coal that exists. Seen in this light reserves are, to some extent, replenishable. If shortage bites and prices rise, uneconomic resources – seams that are too thin, too deep or too remote from markets – become economic and can be reclassified as reserves. And because global resources are vastly greater than global reserves, the industry argues there can be no imminent shortage. “It’s there if the price is high enough,” Brewer says. “It’s all a matter of price.”

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Northwest Europe Steam Coal Marker Price. Source: McCloskey Group

Problem is, the real world seems to have forgotten this piece of economic lore. Although the price of coal has quintupled since 2002, reserves have still fallen. This is similar to what is happening with oil, where fresh reserves have not been forthcoming despite soaring prices. To a growing number of oil industry commentators this is because we have reached, or are just about to reach, peak oil – the point at which oil production hits an all time high then goes into terminal decline.

Some experts are starting to reach a similar conclusion about coal. “Normally when prices go up, mine managers ramp up production as fast as possible and shortage quickly turns to glut,” says coal geologist Graham Chapman of the consultancy Energy Edge in Richmond, Surrey, UK. “This time it hasn’t happened.”

He concludes that the industry has already produced most of the easily mined coal and “from now on it’s going to be a significant challenge”. In China, for example, much of the remaining coal is more than 1000 metres below the surface, Chapman says, while in South Africa the geology is extremely complex. Elsewhere, flooding and subsidence may have “sterilised” significant reserves: the coal is there, but will almost certainly never be mined. As a result, Chapman agrees that true reserves are probably much lower than the official figure.

David Rutledge, chair of Engineering and Applied Science at the California Institute of Technology, shares this view. He became interested in coal after attending a presentation on climate change at which the levels of carbon emissions from fossil fuels were thought too uncertain to be specified. Although the issue was not strictly on his patch, Caltech has a healthy interdisciplinary tradition and early in 2007 Rutledge decided to have a go at solving the uncertainty. The results are even more dramatic than those of Energy Watch.

To forecast coal production Rutledge borrowed a statistical technique developed for oil forecasting known as Hubbert linearisation. M. King Hubbert, after whom the method is named, was a the Shell geologist who founded the peak oil school of thought. In 1956 Hubbert famously predicted that US oil production would peak within 15 years and go into terminal decline. He was vindicated in 1970.

Although accurate, Hubbert’s original forecast depended on the idea that oil peaks when half has been consumed, and half is still underground. So the date of the peak can only be predicted if you have a reasonably accurate estimate of the total oil that will ever be produced. Such estimates can be unreliable – and are worse in the case of coal. Hubbert linearisation, published in 1982, solves this problem by presenting the numbers in a different way.

Linearisation works by plotting annual production as a percentage of total production up to that point (on the vertical axis), against total production on the horizontal axis. This produces a graph showing how the percentage growth rate of total production changes as the resource is extracted (see graphs below). For oil, this percentage generally declines from almost the earliest days of production, even when annual output is still rising, and soon settles into a roughly straight downward-sloping line. By extending the line to the bottom of the graph, you can deduce the total amount that will ever be produced. “Once you have a straight line,” says Rutledge, “you’re off to the races.”

uk-coal-production.jpg

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Top: UK coal production since 1855. Bottom: Hubbert linearization of UK coal production since 1855. Source: Prof Dave Rutledge, Caltech

To test the linearisation technique for coal, Rutledge applied it to historical data for UK production, which peaked in 1913. He says it provides a better model of the decline since then than traditional economics, which tends to blame factors such as foreign competition and Winston Churchill’s decision to switch the navy to oil, and later the displacement of coal by natural gas. Because the straight-line decline in the growth rate of total production starts long before the peak and continues long after, for Rutledge this suggests the cause is fundamentally geological, reflecting the increasing difficulty of expanding production while exploiting resources of progressively poorer quality. “Had you known this method in the 1920s,” Rutledge says, “you could have predicted accurately where British coal output is today.”

He has also applied it to today’s major coal-producing countries, including the US, China, Russia, India, Australia and South Africa – with startling results. Hubbert linearisation suggests that future coal production will amount to around 450 billion tonnes – little more than half the current official reserves.

The idea of an imminent coal peak is very new and has so far made little impact on mainstream coal geology or economics, and it could be wrong. Most academics and officials reject the idea out of hand. Yet in doing so they tend to fall back on the traditional argument that higher coal prices will transform resources into reserves – something that is clearly not happening this time.

So what if coal does peak much sooner than most people expect? According to the International Energy Agency’s latest long-term forecast, economic growth will require global coal production to rise by more than 70 per cent by 2030, so if Rutledge is right, the world is heading for an energy crisis even worse than many already predict. Hopes that coal-derived liquid fuels will be able to step in as oil runs out will also be dashed.

The sliver lining to this gloomy scenario is its effect on climate. Forecasts by the Intergovernmental Panel on Climate Change assume more or less infinite replenishment of coal reserves, in line with traditional economic theory. Less coal means less carbon dioxide, so the impact on emissions could be enormous. Using one of the IPCC’s simpler climate models, Rutledge forecasts that total CO2 emissions from fossil fuel will be lower than any of the IPCC scenarios. He found that atmospheric concentration of CO2 will peak in 2070 at 460 parts per million, fractionally above what many scientists believe is the threshold for runaway climate change. “In some sense this is good news,” Rutledge says. “Production limits mean we are likely to hit the general target without any policy intervention.”

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C02 emissions and peak concentration are lower Rutledge’s producer-limited profile than all 40 IPCC SRES scenarios. Source: Professor Dave Rutledge, Caltech

Neither Energy Watch nor Rutledge could remotely be described as climate-change deniers – quite the opposite – but their findings worry many climate scientists, including Pushker Kharecha at the NASA Goddard Institute for Space Studies in New York. He agrees that coal reserves are probably overstated, but insists that curtailment of coal emissions is still essential to combat climate change. He gives a simple reason for this view: “What are the risks if the low-coal people are wrong?” To pin our hopes on low coal would be dangerously complacent, he argues, because if it is only marginally wrong the additional emissions could ensure catastrophe.

Whoever turns out right, the good news is that the imperatives of climate change and peak coal are identical. “In the long run, economies that rely on depletable resources are doomed to fail,” says Zittel. “The coal peak makes it even more urgent to switch to renewable energy without delay.”



26 Comments on “The great coal hole”

Dan Miller Says:
January 18th, 2008 at 7:21 pm

I thought your article on coal was excellent, and I agree with it entirely. However, the situation will probably be bleaker than the one you painted. As important as the amount of coal mined is the energy content of the coal. Not only will coal production hit a peak and then go into decline in terms of tonnage, but the coal that will be mined will be of poorer quality. Anthracite production has been on the decline for decades in the USA, and as the world goes from bituminous to subbituminous to lignite to heavily water-logged lignite, the energy yield will drop sharply.



Dale Griffith Says:
January 19th, 2008 at 5:25 pm

Excellent article. Another way to reinforce the need for better information on the future availability of coal is to follow the method that Dr. Albert Bartlett has long advocated should be taught to every school child.

Start by taking the currently accepted numbers as valid for the purposes of argument. So right now there are approximately 850 billion tonnes of proved coal reserves, and at the current rate of consumption they are sufficient to last about 150 years. The rate of increase in consumption has been running about 5 per cent annually for the last half decade.

By using a quite simple algorithm that Dr. Bartlett leads us to, we can find how long those 150 years of reserves will last if that 5 per cent annual increase continues into the future. The result is that all of the 850 billion tonnes will be gone in the space of about 43 years.

Since the useful life span of a coal fired electrical plant is on the order of 40 years, any prospective investor who expects to receive a long term return on capital for a new coal plant should already be looking elsewhere. It is reasonable to ask questions about alternative scenarios.

What if the growth rate is just 2 per cent annually? The coal then lasts about 70 years. What if it turns out there are really twice as much reserves; 1700 billion tonnes, a 300 year supply at current rate? Then the coal runs out in about 100 years. How high will the price of coal rise when it eventually becomes obvious that it too has reached a peak of production? This is a question the economists haven’t yet figured out how to answer for oil.

Even though arguments about coal continue to center on its environmental problems, coal’s advocates and detractors should come to the table understanding that there is limited space for coal to continue to be marketed to the public as ‘abundant and cheap’ as opposed to renewable alternatives. The sooner that more informed data on coal reserves can be developed, the better it will be for all parties.



Jef K Says:
January 19th, 2008 at 6:07 pm

Love the silver lining remark on Climate.

My first dig into Peak Coal, and my suspicions about actual reserves seem vindicated. One more resource we can’t rely on.

Let’s go collecting power from that good old sun. May last another coupla billion years !



Lucas Says:
January 19th, 2008 at 9:29 pm

About the price of oil and coal, I have the following theory.

First of all, you have to look to the energy source that is unlimited. Currently that is solar power and you might also take nuclear power.

That price is stable (although it might become a little bit more expensive, it will not rise sharply).

Assume that thermal solar power can be generated for 12 cents a kWh (it is probably lower if it will be done on large scale). This is the “solar anchor”.

Now, in previous days, we generated electricity by using fosil energy. So, electricity had a “premium” above fosile energy in its raw form.

When the energy price hits the solar anchor (which is not yet the case, because solar thermal power plants are not massively build yet), then you get the “premium inversion” on the fossil energies.

The fact that energy is in the form of gasoline, coal or something like, will be a premium. This premium inversion, is a rather quick raise in price of the energy form.

Currently, the oil price is in a premium inversion stage, but I don’t think it is yet finished. If you take a gallon of gasoline, the price per kWh (or Joule) is about the same as electricity. So, obtaining premium status, but not yet fully.

Suppose that the premium of gasoline is about 50% above electricity and you assume the solar anchor of 12 cents per kWh, then you get a oil price between 200 and 300 dollar. If the price (and premium) goes higher, then the pressure to switch from gasoline to electricity goes higher (because electricity will not become more expensive). The electric car will really outperform the gasoline car on energy price and the train will become much cheaper than the car.

Note, that involves a transition and a transition takes time. Price of oil might temporarely be higher, then going down when the transitional technology improves, making the premium lower and making oil cheaper (because there is less demand).

If coal production is limited, then the laws of economics say that coal has to compete with solar power. So, building a coal power plant in a sunny region is not a good investment (environment not taken into account). Building it in a region with little solar options, will be. However, don’t forget, electricity can be transported over long distances rather cheap.



Peter Segaar Says:
January 19th, 2008 at 10:05 pm

An ab-so-lu-te-ly astonishing article! Mind-boggling and very informative. I’ll link this superstory on my (solar) website. Thank you very much for the enlightenment…



admin Says:
January 20th, 2008 at 7:09 am

Lucas, this is an interesting argument, and I am a big fan of concentrating solar power, but I think you are wrong to suggest that ‘electricity will not become more expensive’ as the oil price rises. Gas prices are closely linked to the oil price – and the link will only tighten as oil peaks and gas is increasingly used as a substitute transport fuel – and gas prices drive electricity. So I think the premium inversion you talk of may be (largely?) self-defeating – at least for as long as natural gas is so significant in power generation. Energy prices will surely rise, but the differential you hope for may not transpire.



Lucas Says:
January 20th, 2008 at 2:16 pm

admin,

Electricity will become more expensive, but when it reaches the price of solar energy it will stabilize. This has not yet happened and so, more price hikes are to be expected.

If the electricity price has reached the ‘solar anchor’ (and only if), then a rise in oil price will not result in further price hike of electricity. Since, the solar anchor has not yet reached, a rise in oil price, will result in a rise in gas price, which results in higher electricty price.

Then fossil energy will continue to rise in price. With a stabilized electricity, this results in the premium inversion.

It is important to understand that with rising energy prices, people will act by using the energy more efficient. But if the relation between the energy remain more or less the same, no (or only marginal) transition will take place.

However, if the price relation between the different kind of energies changes (premium inversions), then transition will take place. Currently, only a premium inversion is taking place for oil.

Using a car on gasoline is an optimum engeneering solution. This optimum will not (or hardly) change, when all energy prices rise in the same way. However, if oil rises more quickly, then this optimum will shift eventually.

So, we will get some high energy hikes, but there are some stabilizing points (solar energy) and we are not very far from them.



Jill Weiner Says:
January 21st, 2008 at 10:05 pm

What a shock! Never could imagine peak coal before reading this. Very hard to believe.



Steve Kunz Says:
January 22nd, 2008 at 4:30 pm

It is so obvious to most of us that we cannot continue to rely on limited, fossil-based sources of energy like coal and oil. To do so is not only bad economics, and bad for the environment, but more and more it is leading to political instability. The sun is the ultimate source of almost all life as we know it, and as someone else pointed out, it is going to be around for a long, long time. Seems to make a lot of sense to tap into that source. But solar energy isn’t optimum everywhere. Wind may be better in some places (mountain ridges, etc.). Geothermal works in a lot of places. Along the coasts, tidal power could be a major player. The point is, there are a lot of renewable energy alternatives and we need to use what we have where we have it. And if that de-centralizes “the grid”, well that can only be a good thing from a safety and security standpoint.



admin Says:
January 23rd, 2008 at 5:46 am

Guest post from Chris Vernon of Oil Drum Europe:

Lucas, I like idea of a “solar anchor”, I really do. I’ve come across it a few times in comments but I’ve never seen a decent article on it. If one assumes sunlight and the infrastructure required to harness are, for all intents and purposes, unconstrained. But the cost comes in at say 3-fold “conventional” electricity, there should be no need to electricity to ever cost more than 3-fold today’s price.

This is fine in theory however the problem is the time dimension. Taking his figure of 12cents/kWh, gas/coal/oil prices could still jump such that conventional electricity cost 20cents, we’d be paying 20cents as it would take decades to deploy the gigawatts of solar to displace the “expensive” conventional fuels. The market simply can’t respond fast enough.

Lucas covers this issue with the following note:

“Note, “that involves a transition and a transition takes time. Price of oil might temporarely be higher, then going down when the transitional technology improves, making the premium lower and making oil cheaper (because there is less demand).”

I suspect however this is the dominant factor in any practical situation rather than a minor note.

The electricity price will only stabilise when it hits the solar anchor, if the solar capacity can grow to cover all conventional generation – which will take significant time.

Final thought – can the world afford its current energy consumption at the solar anchor price, even if the solar capacity could be built swiftly?



Mechanieker Says:
January 24th, 2008 at 2:00 pm

“Final thought – can the world afford its current energy consumption at the solar anchor price, even if the solar capacity could be built swiftly?”

Absolutely. There should be no doubt about that. http://www.theoildrum.com had an article exploring a kind of “breaking point” price for oil, that would criple industrial civilisation if it should be sustained. A price of between 250$ and 1500$ was estimated.

In other words: energy prices could easily double or perhaps rise 15-fold before we would actually see industrial civilisation grinding to a halt.

I expect that if energy prices hold or continue to rise in the coming decades, that we will see a massive shift to solar and wind, even though the “party might be over”.



Lucas Says:
January 25th, 2008 at 7:48 pm

Solar thermal energy can be ramped up very fast, because it consist mostly of low tech. It will not be difficult to start installing 10GW (coal equivalent) a year. It will cost the US about 30 billion dollar a year. That is not a real problem for the US. Even when you double or triple it. Bill Gates can pay for 2 years if he wants.

Ramping up solar PV is much more difficult, because it requires complex machines. 2007 world production was 4GWp, this is about 1GW coal plant equivalent. This is almost nothing on world scale. However, in 2011 production will be 21GWp. If growth continues (and there is no reason why not), production can be 500GWp in 2018. This means that the solar PV industry will be 1000 billion dollar a year. This is huge, but not ridicolous for an energy industry.

Furthermore, you have two stages:
– Stage 1, investing in fossil energy stops.
– Stage 2, fossil energy will be replaced by renewable energy.

Investors are totally stupid, so stage 1 will probably happen some years before the solar anchor has been reached. If I look to all the articles, I notice some decline in believe in fossil energy future. With 20% renewable target in EU, investors start to think, “my gas powered plant, might not be profitable in 5 years”, while the solar anchor is not yet reached.

Finally, the question is, is 100% renewable possible?

The answer is yes.

– Electricity can easily be produced by solar power.
– If you divert all waste processing and biomass for the use in industry and airplanes, this is probably enough.
– Cars should shift to electric, which is possible with current technology and batteryswapstations. Range will be limited, but, be serious, that is far from famine. Running cars on biomass, is not possible in a 100% scenario.

Finally, you can also run a car on ammonia. Ammonia doesn’t contain carbon and can be produces in solar plants from water and air. But this is rather poor man’s solution.



Jim Prall Says:
January 26th, 2008 at 1:21 pm

Great article and discussion. I’ve been following “peak oil” for some time, and the group have also asserted that “peak natural gas” and “peak coal” are indeed real threats as well. For “peak gas” there is the book “High Noon for Natural Gas” by Julian Darley. I have yet to see a book specific to the “peak coal” argument, though.

I’m delighted to see people reasoning out the future of energy prices with this fossil peak context. I’ve read a lot about all sorts of renewables: wind, solar PV, solar thermal, geo-exchange and geothermal, as well as biofuels like switchgrass, etc. Once I see the stark picture of fossil energy extraction facing peak and decline, as against WEO and IEA forecasts of decades more compound growth in demand (as population and GDP/cap. both keep growing), it all just doesn’t add up.

I then wonder how soon we can mobilize all these green, sustainable sources to fill some of that huge looming gap. Many other studies have asked a similar question, and they typically conclude that we can’t, or won’t, expand renewable electricity sources fast enough to avoid a plateau and fall in total supply. The Hirsch Report, Pacala and Socolow, and even wind and solar industry watchers all seem to lead to similar conclusions: we can look forward to rapid growth in all such renewables, compounding year on year, and still not see much of a dent in the ‘big gap’ for many years.

I guess this is where conservation and efficiency have to take up the slack, driven by rising prices. We are grossly inefficient with all forms of energy now, compared to what is possible if energy prices were high enough to make us care and change. The good news is that we can get the same services and benefits for much fewer gigajoules per service, and these changes should start happening quickly as the price per GJ starts to climb ever higher (at least up to the “solar anchor” price ;-) If the price rises faster than we can increase efficiency, due to high capital costs and sunk costs in buildings, big cars, coal plants, etc, then we will actually see a drop in consumption of the beneficial services themselves: people will make sacrifices to stay solvent, and will make changes like taking the train to work, carpooling, moving closer to work, into a smaller house, cutting back on vacation travel, etc. This is what the oil analysts call ‘demand destruction.’



Lucas Says:
January 26th, 2008 at 6:35 pm

About ‘demand destruction’.

This is a decrease in welfare, but not necessarily economically bad.

If you start to live closer to your work, you save money. This money will be spend on other things. This will probably trigger more economical activaty locally, instead of sending the money to oil producing countries.

The bad thing is, when people don’t cut back on their energy. Then they continue to send money abroad, not spending money for more local things.

Lucas



Peter Segaar Says:
January 30th, 2008 at 8:16 pm

@Jim Prall said:

“I then wonder how soon we can mobilize all these green, sustainable sources to fill some of that huge looming gap.”

Faster than you think. Bavaria (Germany) already was on 1,4% solar electricity in 2006 (which, considering the small, modular approach of photovoltaic (PV) electricity, should be something to think about…). The PV-branche organisation BSW in Germany just published record new installations of 1.100 MWp for 2007 (has to be confirmed as of yet, but staggering it is, even if it turns out to be hundreds of MWp’s less). Chinese rocket SunTech already is on the brink of 1 GWp production (a year), Q-Cells might even be bigger, together they took long-time market runner Sharp (Japan) by surprise, and you don’t know what is happening in China alone on this new frontier. The biggest company in the field, the Norse REC (which produces huge amounts of solar grade silicium because Norway has 98% (cheap) hydropower,) is going to build a 1,5 GWp solar production complex for app. 3 billion Euro in …. Singapore.

Etcetera…



2020Vision Says:
February 3rd, 2008 at 3:56 pm

Thank you for a fascinating insight into peak coal.

If you analysis is correct, coal consumption will increase for at least 3 reasons.

1. General economic and industrial growth, especially in India and China.
2. Coal increasingly used to replace liquid and gaseous petroleum fuels.
3. Reduction in the quality of the coal, with increased difficulty in mining and transportation costs.

I see also, a rather alarming trend emerging, and that is the increase in manufacturing output of solar pV, particularly in China.

Whilst not immediately quantifiable with any hard accuracy, a rough calculation suggests that there could be as much as 3.7 tonnes of coal used in the manufacture of 1kWp of photovoltaic panels.

As Lucas states above, the solar pV production could reach 500GWp per annum by 2018.

If this is to be mainly located in China, using electricity derived from coal fired power stations, then this could result in the consumption of a further 2 billion tonnes of coal per annum – just making pV panels.

This sets alarm bells ringing in that we use a significant proportion of our remaining fossil fuels to make solar panels, and this will further accelerate out path through peak coal and towards global coal depletion.

If this is the route that we are choosing to follow, it seems like a road to ruin.

We could get 40% better utilisation of our remaining coal reserves by moving towards supercritical and IGCC power plants. This would also produce a similar reduction in CO2 emissions.

There are also alternative solar technologies, such as solar thermal power generation, that should give better return on investment of fossil fuel energy, than solar pV.



Gijs Says:
February 6th, 2008 at 9:05 pm

To Lucas:
It might be useful in your calculations to do a proper life cycle analysis on Solar PV. if production is ramped up as quickly as you suggested, what will be the additional energy need for production? When you look at the total energy picture the solar thermal option is easily superior.

Add to this the option (or for economics: requirement) for Europe to place vast fields in a place like the sahara dessert, instead of inefficiently on northern german roofs.

Solar seems a good alternative to fossil fuels, but first we have to get smart about using it.



admin Says:
February 8th, 2008 at 4:56 pm

20/20 Vision, this is interesting, but can you explain a couple of points:
>
> 1. what is the source/method of your coal-to-pv calculation?
> 2. “We could get 40% better utilisation of our remaining coal reserves…”. Can you clarify – 40% better than at present, in which case what efficiency overall? 70-80%? This seems high to me. If correct, can you explain the
> source/basis of this?
> 3. I am extremely doubtful of Lucas’s 500GWp/year by 2020, and had been meaning to take him up on it. Do you have any evidence to support it?



admin Says:
February 8th, 2008 at 4:58 pm

Guest post from 20/20 Vision:

My rough calculation was based on some figures for the embodied energy in the various types of pV.

This early paper states that it could be as much as 1060 kWh of electricity to make 1m2 of pV. Approximately 7m2 of pV is needed for a 1kWp array so the embodied energy is 7420 kWh of electricity.

I found some better figures for more modern cells, that reduce this to 1863kWh/kWp and 5598kWhe/kWp for the “Sliver” cells and conventional respectively

http://solar.anu.edu.au/level_1/pubs/papers/2CV_3_35.pdf – see table 1.

I then looked at a current technology from Evergreen Solar, which uses just 5kg of polysilicon in a 1kWp array, compared to the industry norm of 10 – 12kg. This figure is set to drop to just 2.5kg in a few years.

http://www.evergreensolar.com/app/en/technology/item/48

However, Evergreen are buying their polysilicon from South Korea, who have about 38% mix of coal in their power generation, and its debatable whether their suppliers energy requirements have been fully factored in.

It is in China where the largest growth of solar cell manufacturing has occured in the last 2 years, with companies such as SunTech with a 1GW per year production facility.

This article shows the main players – increasingly in China and Taiwan

http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008

So looking at the typical coal fired power plant efficiency in China currently 28%, with about 8% further transmission losses, means that to produce 1kWh of electricity, takes 5kWh of coal. Good quality coal typically has a calorific value of about 9.4kWh/kg.

So, if the conventional pV cells were made in China, the 1kWp uses 5598kWhe or 27,990kWh of coal. This equates to 2977kg of coal.

The early paper that stated 7420kWhe/kWp equates to 3.946 tonnes per 1kWp array, and the “Sliver” pV equates to 990kg/kWp.

So even the best pV technology is using nearly a tonne of coal in its production

2. We could get 40% better utilisation of our coal reserves.

By this I meant 40% better utilisation than the present UK average from a
pulverised fuel plant, such as Cottam or West Burton.

A supercritical coal plant or one using integrated gasification combined
cycle will produce electricity at nearly 50% efficiency, compared to the UK
typical plant efficiency of about 38%. Taking off the near constant 8%
transmission losses, and the net efficiency of production is the difference
between 42% and 30%. 42/30 = 1.4.

So a net 40% increase in electricty production for a given fuel consumtion
using one of the new coal technologies.

Lucas’s figure of 500GW pa.

It does seem a bit high – but we have seen examples of this sort of
bandwaggon expansion – especially in the corn to ethanol industry

I just came across a Scientific American article suggesting that the US
could attempt to have an installed base of 3000GW by 2050.

http://www.sciam.com/article.cfm?id=a-solar-grand-plan&page=1

This would need about 72GW manufacturing capacity for the next 42 years.

A more realistic figure is the earlier reference which shows the
manufacturing doubling to about 22.6 GW in 2010.

http://seekingalpha.com/article/58786-pv-industry-in-oversupply-in-2008

If this were extrapolated to a doubling every 2 years, then this figure
could be theoretically exceeded – but I doubt that even China has the
resources to bring this about.

2010 22.6 GW
2012 45.2
2014 90.4
2016 180.8
2018 361.6
2020 723.2



Donald N Anderson Says:
February 10th, 2008 at 6:37 pm

A R/P ratio of 144 is so abnormally high that it suggests that coal is so pleniful that it requires very little serious exploration to find it. I suspect that most coal exploration looks only for very high grade deposits close to transportation corridors.

Normal R/P ratios are largely a reflection of the interest rate and so so spending exploration funds to discover additional reserves at a R/P of 144 makes sense only if you expect to find reseves that can be extracted at significantly lower cost than those you currently have.

I would hope for the health and safety of everyone we leave a lot of that coal in the ground and move rapidly to nuclear power generation.



Mike Spangler Says:
March 9th, 2008 at 4:39 pm

The reserves have not grown due to lack of exploration, more than anything. I used to work in mining, and the our exploration crew’s job was to replace each year’s production with new reserves. If reserves get too far ahead, they might get laid off :-). So each year they found another year’s worth of ore. So a mine would run with 5 years of reserves for 15 years, then they really did only have 5 years left.

Then after 20 years, they still ran for two more on the subeconomic ore, which is ore that was only worth running after the plant was fully paid for, and there was nothing better to feed in.

The price of coal has been so low for so long no one was looking for more. It also takes at least a decade to open a new mine. There is a gold mine north of here that has been in the permitting process for 17 years. The long time delay to bring on new production causes “short term inelasticity in price” from my old Econ 101 text.

If the price stays up for a decade or so, people will start looking again, whether it is for coal, uranium, or copper.



Charles Says:
March 17th, 2008 at 9:49 am

“If the price stays up for a decade or so, people will start looking again, whether it is for coal, uranium, or copper”

Traditional economics — as the price goes up, so does exploration, and so does the search for alternatives. There can be temporary problems as new sources are found and brought online, but eventually it works out.

Great idea, but it doesn’t work over the long term. It has serious limits into which we are running now.

The reality for petroleum in USA DISCOVERIES peaked in the 1930s — a bit less than 40 years before production started to decline. And what ho! WORLDWIDE discoveries peaked in the 1960s…. also around 40 years ago, so perhaps we should not be surprised that oil production worldwide plateaued in 2005 and is probably in decline now.

The simple reality is we find the easiest sources first. Mexico’s huge Cantarell field was discovered by a fisherman who noticed oil slicks in the Gulf of Mexico. The earliest metal ores exploited where very high quality — like in Minnesota, whole mountains that are very high quality iron.

When the easiest stuff is gone, you look harder, and eventually you find the rest — but the “rest” takes a lot more energy to obtain, and the process cannot go on forever. Eventually what’s left is too expensive and poor in quality to obtain.

Peak oil is near, and peak coal is nearby, and industrial civilization is at stake because idiot rat-like humanity keep lapping up the free food that poured out of the ground under its own pressure, and didn’t accept the inevitability that one day that nearly-free energy party would end.

northern spy@verizon.net (remove space)



Diana Korchien Says:
March 22nd, 2008 at 9:13 am

I do not see present-day humans as any more evil or idiotic than our dim and distant ancestors. When the end comes into view, it descends with a rapidity born of the exponential growth of all factors. We have been the victims of our own culture: ‘Mother Earth the bountiful’, dating back millennia. We never changed the ancient script (it sounded so reassuring) and automatically taught the concept to our children. That is the tragedy of it all.



Jenny Says:
May 5th, 2008 at 4:55 am

The ZENN car company is supposed to be coming out with a new electric car that goes 80 mph and has something like a 250mile range (due to new battery technology developed here in Texas, though I don’t know much about it specifically). So, if that’s true, I’m expecting to be driving one of those in a few years and putting up solar panels on the roof to power it (and the house A/C, etc). I think most people (even wealthy people) are just waiting though even if they can technically afford solar, since those alternatives are still more expensive than gas and electricity costs. Once the cost of gas and electricity gets high enough to justify it though, I think a lot more people will switch to solar. I am still curious to see though if governments (like U.S.) will introduce gas-rationing in attempt to hold down the gas-prices once they hit around $7-$10/gallon or something. Otherwise the price will go “through the roof” for awhile and only the wealthy will be able to afford driving without carpooling. I think government intervention is a bad idea, but I just bet they will do it anyway and I think the whole story will be interesting to watch unfold….so if you like having the freedom to drive a lot right now for leisure/vacation/etc, it might be wise to consider one of those new long-range electric cars before rationing hits (if it’s really true that those cars will be available soon – I hope they hurry and make a 4-seater though since we have kids!).



Neil Solarcell Says:
August 31st, 2010 at 3:00 pm

The switch to renewable energy must take place very shortly and companies and countries should be making the switch very swiftly as in the near future, coal/crude oil and other old methods of energy will be not viable any longer.



The Future of Energy « Around the Coast Mountains Says:
January 2nd, 2012 at 4:54 am

[…] over 100 years worth of coal left at current consumption rates. However, there seems to be some skepticism by other analysts towards these rosy estimates. In any event, the methodology for estimating the […]





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