By JR on Thursday, February 11, 2016
Australia's coal-fired power stations at risk of 'death-spiral' - report
This is mostly nonsense. The idea that "renewables" compete with thermal coal is a laugh. They are just an unreliable luxury of very little actual use. They CANNOT supply predictable power.
Competition from gas may be a problem but gas prices are in flux so we will have to wait and see on that one. Gas prices differ widely in different parts of the world so arbitrage must come into play eventually.
The cheapest electricity in Australia has always come from Victoria's brown coal generators in the Latrobe vallety, but they are hated by Warmists -- and a proposed new one was made unviable by environmental requirements in the Gillard years. Germany is however building a heap of brown coal generators so a return to brown coal in Australia seems likely. It is undoubtedly the cheapest option
Brown coal deposits are frequently close to the surface so big digging machines just scrape it up and feed it onto a conveyer belt to the power station next door, which is very efficient. No miners and no trucks needed
Australia's power sector is at risk of a "utility death spiral" due to its reliance on coal, along with utilities in the US, Japan and Germany, according to a report highlighting the environmental-related risk of coal producers.
Additional pressures on the coal industry is coming from the shift by countries such as China and India to rely on domestic sources for coal, rather than imports, to feed their surging demand for electricity generation.
The report, by the University of Oxford's Smith School of Enterprise, pointed to the emergence of renewable sources of energy such as solar and wind, along with competition from gas as additional pressures for the sector.
Other issues include water stress, concerns over air pollution, changes to government policies and the challenge of carbon capture and storage technology, the report noted.
A 'death spiral' occurs as new energy sources take market share from coal-fired power stations, forcing stations to close while also undermining the economics of the centralised electricity grid by forcing higher distribution charges, according to the report.
The use of so-called 'sub-critical' coal-fired power stations which are poor converters of energy from coal into electricity, use high volums of water for cooling and release high levels of carbon emissions puts the utilities and coal companies at particular risk in countries such as Australia, according to work by the group.
That risk declines with the use of new generation technology, so-called "super-critical" power stations, which are more expensive to build.
The report comes after US energy giant ExxonMobil this week predicted that global demand for coal would peak in about 2025 and then fall into terminal decline.
In contrast to coal's decline, demand for natural gas would increase by 50 per cent over the next 26 years, ExxonMobil predicted in its 2016 Outlook for Energy report.