Coal will 'dominate global power sector for decades'
ANNABEL HEPWORTH | The Australian| January 30, 201412:00AM
COAL will dominate the power sector globally for decades to come, according to a paper that miners say undermines campaigns by green activists to "demonise" coal.
The paper - written by an International Energy Agency consultant and to be sent to Industry Minister Ian Macfarlane - says coal will remain the dominant power-sector fuel for at least the next quarter of a century despite efforts to diversify power sources and concerns about slower economic growth.
It says the development of carbon capture and storage technology will be essential to "reconcile the ongoing importance of coal-fired power with the global environmental objectives", with two projects coming on line soon in North America that could help secure the continuation of coal.
It also says that while coal use is declining in OECD countries, there will be a strong growth in power output in China, then later in India and Association of Southeast Asian Nations countries, and coal will be the biggest driver of this.
Miners have seized on the paper to declare that coal will remain the backbone of affordable global energy for decades, and that attempts to undermine Australia's coal industry are "simply a reckless attack on Australian jobs and the economy".
Minerals Council of Australia chief executive Brendan Pearson said: "It will not stop the world using coal. Activist campaigns seeking to demonise Australian coal fail to acknowledge that it will be the principal global energy source for decades - transforming economies and helping eliminate poverty."
Green groups have been pushing the government to reject Clive Palmer's Galilee Basin mine and the Abbot Point coal terminal expansion in the Great Barrier Reef because of doubts about coal demand. Last month, the Greens seized on an Oxford University study finding that coal projects in Australia could become stranded because of sagging demand from China to insist there was a "global freefall" in coal demand.
The new paper was commissioned by the Energy Policy Institute of Australia, which wants to use it to shape the energy white paper being formulated by Mr Macfarlane.
The paper was produced by Ian Cronshaw, a consultant to the office of the chief economist in the International Energy Agency, who was last year responsible for the coal chapters of the IEA's World Energy Outlook publication.
The paper draws heavily on IEA research and closely reiterates previously published comments from the office of IEA chief economist Fatih Birol, including about the role of coal-fuelled electricity in lifting hundreds of millions of people out of poverty and allowing them to use refrigerators, do homework and run small businesses.
Mr Cronshaw was part of a team working in Mr Birol's unit that last year drafted a paper published by Mr Birol, which formed an extensive basis for the work he did for the Energy Policy Institute. The IEA's views are likely to carry weight with Mr Macfarlane as he has previously chaired IEA ministerial-level meetings, while the white paper team is also familiar with IEA work.
Mr Cronshaw's paper was based on the most recent figures from the IEA and other sources.
Anglo American Australian advisory board chairman Graham Bradley said the findings should be welcomed as coal "will remain one of our largest export earners for decades to come provided that government policies continue to support the industry".
"Much of the green polemic is not grounded in the fundamental reality that the world needs the lowest-cost energy and at the end of the day the economics will prevail and investment will follow," Mr Bradley said.
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