Using coal vs. going cold and hungry

A very interesting post is available over at The Oil Drum:

In electricity generation coal, like nuclear power, is more commonly used for baseload generation, while natural gas is more for times of high demand, since it can be more easily brought on line and, later, turned off. However, as natural gas supply becomes more in question, then something will have to replace those generators.

It is a debate that is facing an increasing number of communities around the country as increasing electricity demand begins to strain existing resources.

It is up in response to ant-coal thinking, generally, but solution-less anti-coal thinking, specifically. It follows editorials/articles in the New York Times and the Washington Post, and known energy prices, such as given in this article:

Solar costs about 25 cents a kilowatt hour. That’s compared to about 9 cents a kilowatt hour for natural gas and 5 cents a kilowatt hour for modern coal-burning plants, as well as 6 cents a kilowatt hour for wind energy if tax considerations are included. The good news is that the cost of solar power is falling all the time. It once stood at $1 a kilowatt hour and advocates say that it could soon cost 12-16 cents a kilowatt hour.

I’m known to be biased in favour of the Oil Drum, but the argument presented here makes a lot of sense: energy demand is increasing; energy supply is not, and coal is the cheap source that can be brought online while we deal with declining natural gas and oil.

Consider, for example, oil (via the IEA):

OECD graph

This does not include, for example, declining oil exports, either. Nor declining gas reserves. That gap isn’t going away, and it will become more and more expensive (particularly as more gas is needed to pump out the remaining oil).

The EIA’s short-range forecasts follow a similar argument, in re declining gas reserves and increase coal utilisation.

Essentially the narratives remain. Of the sources of energy, coal is the cheapest – even once environmental impact amelioration (carbon sequestration, etc.) is factored in. Moreover, it is the one that is at the market already. The gap between supply and demand is one thing, but the gap between current technology/supply and the ability of renewables to take their place is another. We can’t wish away the time difference between the death of oil and gas, and the new life of wind, solar and so forth (should there be one).

The flip-side of this, of course, is proper management of demand. These arguments pre-suppose that energy demand is what it is – high, increasing, and increasingly spiking. Even load-shedding, the focus of the NY Times piece, is not something that can address that problem comprehensively (amongst other things, it stops working effectively as more people respond to the idea).

In terms of personal beliefs, this goes in with building more highways to deal with more cars – it’s like loosening your belt to deal with obesity. The constraints are not the problem. If anything, higher prices would prompt (painful) demand restraint, and a big part of me welcomes it, if not for the distributional implications, which are quite serious.

At the moment, policy is a little bit pregnant, which we know one cannot properly be. Public pressure is already having an effect on local government up-take of coal energy, but very little of worth is coming out of government, policy-wise, at any level, whether related to supply or demand. Having intervention in only part of the market, allowing the other to exacerbate a problem freely, is in no way sustainable: the only endgame of the current approach is rolling power failures every Summer.

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