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7.23.2010 The World's Ever-Increasing Hunger for Coal

By Frank Dohmen, Alexander Jung and Wieland Wagner

Coal-fired power stations are a major producer of the greenhouse gas CO2, but there is no alternative to the fuel in the near future. Energy companies are hoping that carbon capture and storage technologies may be the answer, but many local residents don't want CO2 stored under their backyards.

When Rolf Martin Schmitz, a manager with the German energy giant RWE, drove to the North Sea resort island of Sylt last summer, he immediately noticed the signs. Along the side of roads throughout the northern German state of Schleswig-Holstein, he was greeted by images of skulls. Residents had installed the billboards to protest against underground storage sites for carbon dioxide that may be built in the region.

Citizens fear dangerous leaks of the gas, which can be hazardous at high concentrations, and other health risks. Schmitz, on the other hand, is worried about the future of his company.

Schmitz is the head of the domestic operations of RWE, Germany's second-largest electricity producer, whose most important energy source is coal. Burning the material creates large amounts of the greenhouse gas CO2. Energy companies are working at full speed to develop so-called carbon capture and storage (CCS) technology, which involves capturing CO2 and storing it underground. Schmitz believes that the technology provides a way to solve the emissions problem associated with coal-fired power plants.

Fierce Resistance

For Schmitz, it is incomprehensible that the planned gas storage facilities are encountering so much resistance, particularly as there have been underground natural gas storage facilities in northern Germany for decades, which have never been viewed as a hazard. "Suddenly it's the work of the devil," he says in astonishment.

As of last Wednesday, Schmitz could feel somewhat relieved. That was when German Economics Minister Rainer Brüderle, a member of the pro-business FDP, and Environment Minister Norbert Röttgen, who belongs to the conservative CDU, unveiled, in a moment of rare harmony, a bill to regulate the construction of CO2 storage facilities. Under the new legislation, utilities will be able to try out the new technology, at least in a few pilot facilities. Röttgen called it an "important contribution to enhancing climate protection," while Brüderle promised that the technology "couldn't be safer."

The energy companies also see Berlin's green light for CCS technology as a signal that coal-generated electricity has a future in Germany once again. Almost half of all electricity generated in Germany comes from coal, and the percentage is even higher in other countries. In China, for example, it's more than 80 percent, and demand there is only expected to grow.

Increasing Demand

Coal is currently experiencing a phenomenal comeback everywhere. Demand has grown considerably, making coal the second-most important energy source worldwide, after oil. Billions of people depend on coal for their electricity supply.

Experts at the International Energy Agency (IEA) in Paris estimate that demand for coal will increase in the next two decades by more than for any other energy source except wind and solar power, from the current level of about 6.7 billion tons per year to almost 10 billion tons in 2030. China and India are mainly responsible for the coal boom, with the two countries already accounting for more than half of global demand. According to the IEA, they will have more than doubled their coal consumption by 2030. Coal provides them with electricity, and electricity is the elixir for progress and prosperity. In China, a new coal power plant is placed into service about once a week.

Coal drives machines, illuminates apartments and houses, heats stoves and moves high-speed trains. The raw material that made industrialization possible in the 19th century remains an essential element of modern life in the 21st century.

Politicians around the world, especially in Germany, can enthuse as much as they want about the potential benefits of renewable energy sources, but when the German government unveils its new energy strategy in the coming months, it too will include coal as part of the energy mix. The dirty truth is that the future of the world's energy supply is black. Given the alternatives, what else can it be?

Plentiful and Cheap

Many people feel that nuclear power is too dangerous. Crude oil is getting more and more difficult and expensive to produce. Natural gas creates a dependency on temperamental suppliers. And solar, wind and water are not sufficiently developed yet to provide a large share of the energy supply. Which leaves tried-and-tested coal.

No other fossil fuel is available in such large quantities; current coal reserves will last for generations. No fossil fuel is as comparatively cheap. It costs only about 5 euro cents (around 6 US cents) to generate a kilowatt-hour of electricity from coal, compared with about 40 cents for solar power. And no fossil fuel is as widely distributed. Every continent has adequate reserves and, unlike oil, most of those reserves are found in regions which are relatively stable in geopolitical terms, such as North America, Europe and Australia.

But no other raw material is as devastating to the environment when used. Coal is the worst climate killer in the history of humanity.

Coal comes with a high environmental price. Almost one kilogram (2.2 pounds) of carbon dioxide is emitted to generate one kilowatt-hour of electricity from black coal, and emissions from lignite are even higher. By comparison, a modern gas power plant emits about 350 grams of CO2 per kilowatt-hour generated, while nuclear power is responsible for only about 30 grams.

In other words, it isn't geology that defines the limits of growth. Instead, environmental concerns raise doubts as to the future viability of the fuel. "Coal is the environmental problem of the 21st century," says Ottmar Edenhofer, chief economist at the Potsdam Institute for Climate Impact Research. Unless, of course, we can find a way to use this energy source without it destroying the environment. Is something like clean coal even conceivable?

Part 2: Brutal Interventions in Nature

The idea of clean coal seems absurd to anyone who has ever peered over the edge of the Garzweiler open-pit lignite mine into the crater below. The mine, which is located near the city of Cologne in the German state of North Rhine-Westphalia, is five kilometers (3.1 miles) wide and more than 200 meters (656 feet) deep. It was dug by the world's largest excavators, and every day they chew up another piece of the moonscape. There are few places on Earth where man has intervened quite so brutally in nature.

The oldest machine in use at the mine, excavator 258, stems from the 1950s, an archaic monster that weighs almost 7,000 tons. The steel girders are still riveted together, and some of the switches are still made of Bakelite, but the giant machine is now controlled with state-of-the-art technology. Using a monitor, the driver can watch the blade wheel digging the coal out of the seam on the edge of the pit, in a constant downward movement. "Look, there's a water pipe," he says, pointing to a flashing red dot approaching the excavator. He tilts the joystick and the blade wheel, which has a diameter of about 18 meters, bypasses the concrete pipe by a hair.

Available in Abundance

Every second, excavator 258 digs more than a ton of lignite out of the ground. Lignite, also known as brown coal, is a moist, crumbly material, created millions of years ago out of the remains of plants in which energy derived from photosynthesis was stored. Today human beings utilize this former solar energy. Although the energy value of lignite is only moderate, because more than half of the material consists of water, it is available in abundance in the coal-mining area between the western German cities of Aachen and Cologne.

Conveyor belts several kilometers long transport the coal to be loaded onto railcars or directly to one of the power plants in the vicinity. There, it is dried and ground to the consistency of ground coffee, then blown into a combustion chamber and fired at more than 1,100 degrees Celsius (2,012 degrees Fahrenheit).

The high temperature causes the water to evaporate, and the resulting steam flows at high pressure against the blades of a turbine, setting it into motion at exactly 3,000 revolutions per minute. A generator converts the rotational force into electrical energy, and finally the electricity is fed into the grid.

RWE controls the entire process, from the large excavators in Garzweiler to the high-voltage power line. And RWE executive Rolf Martin Schmitz oversees it all.

'An Energy Source with a Future'

Schmitz grew up with lignite. Originally from Mönchengladbach, a city in Germany's industrial Ruhr region, he studied engineering in Aachen and then embarked on an illustrious career in the world of utilities, with stints at Steag, Veba, Thüga and E.on before he started working for RWE.

"Coal is an energy source with a future," Schmitz once said, and he still thinks so today. "We will need more and more electricity in the world," he says.

RWE meets almost one-third of the total electricity demand in Germany. The bulk of this electricity comes from the 100 million tons of lignite that are mined and burned each year. The Essen-based company is even investing in the expansion of some of its production facilities. In other words, in the future too, lignite will continue to ensure RWE's place as Germany's largest electricity producer.

It also makes the energy giant Europe's biggest air polluter. No other company emits as much CO2. And nowhere else does it enter the atmosphere in quite as concentrated a form as in the neighborhood of the Garzweiler open-pit mine.

Three power plants -- Niederaussem, Neurath and Frimmersdorf -- are located there within a radius of just 3,300 meters. The water vapor from the cooling towers often darkens the sky, and a film of ochre-colored dust coats the landscape. And then there is the carbon dioxide. Together, the three power plants emit roughly 65 million tons of CO2 a year, or about as much as 25 million cars. Many residents of the area are tired of the dust, the darkened skies and the gas emissions.

They are fighting against overexploitation on the ground and pollution in the air. After 50 years of lignite mining, they say, enough is enough. The region they call home is being literally burned up. An opposition movement is beginning to take shape, and not only in the Ruhr region.

Part 3: The Impending Energy Gap

In many places, energy companies want to modernize old lignite power plants or build new black coal power plants. Opponents of such schemes are protesting everywhere, and they have been surprisingly successful. The utilities have already abandoned or postponed a dozen projects, sometimes because of questions surrounding profitability, but often as a result of local residents' objections.

The industry is already warning of a potential power supply gap if further projects are torpedoed. The German Energy Agency estimates that by 2020 the country will lack about 13,000 megawatts in power generation capacity, which corresponds to about 10 large coal-fired power plants. "Things are getting tight," says Schmitz, who warns that it is becoming more and more difficult to guarantee the country's electricity supply.

Coal critics counter that the supposed power supply gap is an invention of the energy industry. The anti-coal movement is led by the so-called Climate Alliance, a group of about 100 organizations, including BUND (the German branch of Friends of the Earth) to the major Christian aid charity Brot für die Welt. The Climate Alliance has two staff members who do nothing else but provide assistance to local citizens' initiatives which are trying to stop energy projects. Any time there is a hearing on the construction of a power plant somewhere in Germany, a member of the Climate Alliance is there, for example at a recent hearing in the northern town of Brunsbüttel, at the mouth of the Elbe River.

Health Concerns

There are plans to build Germany's largest power plant complex for black coal in Brunbüttel, just a few steps away from the old nuclear power plant. Südweststrom (SWS), an alliance of more than 50 municipal utilities, plans to build the first two units. Bettina Morlok, the CEO of SWS, arrived at the hearing with a large entourage.

The hearing was being held to address the issue of expected concentrations of pollutants in the air. Morlok had brought along an expert on environmental medicine from Giessen in central Germany to testify. The professor assured his audience that everything would be fine, and that nothing would really change for local residents. Many audience members shook their heads in disbelief.

"It sounds as if it's whipped cream that will be coming out of the plant's chimneys," one citizen said derisively. An apple farmer expressed his concern that fine dust would rain down on his fruit in the future. One mother explained how her daughter suffered from respiratory infections. "What will happen to her when we have the coal-fired power plants?"

Local residents are uneasy. Some have had past experiences in protests against the energy industry, such as those directed against nuclear power plants in Brunsbüttel and nearby Brokdorf three decades ago. At that time, the hearings were accompanied by police officers with dogs, says Karsten Hinrichsen, a retired meteorologist from Brokdorf. The resistance movement, he says, was more radical, more passionate and more leftist. "Today we take a more matter-of-fact, bourgeois approach," says the veteran activist. Perhaps this is because today's anti-coal movement cuts across all social classes, from doctors to farmers and church ministers to scientists.

More Cooperative

But their adversaries also behave differently today. They are smarter, more open and more cooperative. "We take this very seriously," says SWS CEO Morlok. After all, the SWS alliance of municipal utilities also includes Tübingen, a city with a Green Party mayor.

Morlok listens attentively as one local, who suffer from asthma, talks about her fears. "I can understand people's concerns very well," Morlok insists. Naturally that won't stop her from building the power plant the minute the authorities have issued the necessary permits.

Brunsbüttel is seen as an ideal location for a coal-fired power plant. Thanks to the Elbe River, the plants don't even need their own cooling tower, because the tide simply carries the heated water out to sea. And even the largest coal ships from abroad can unload their cargoes there, which would comprise between four and five million tons a year.

Unlike lignite, domestic black coal only plays a secondary role for German utilities today. They are buying more and more of the material abroad, mainly in Russia, but also in Colombia, which is already the world's fourth-largest coal exporter, and Australia.

Mining companies like BHP Billiton, Rio Tinto, Xstrata and Peabody Energy are outbidding one another for licenses to extract coal in the best production areas. They are scattered around the entire globe, for example, in Australia's Hunter Valley, in the Powder River Basin in the US state of Wyoming, and on the eastern coast of Kalimantan, one of Indonesia's two main islands. In places like these, the coal seams are readily accessible, mining is cheap and labor costs are usually low.

Nevertheless, only one in seven tons of coal enters the global trade. The biggest coal-producing countries need most of the fuel themselves. In China, in particular, the coal industry is in full swing.

Part 4: The Harsh Reality of Coal Mining

In Shanxi province in northern China, one coal train after another winds through the loess landscape, heading for the port of Qinhuangdao on the country's east coast. A seemingly endless string of trucks, their beds inadequately covered with tarps, thunder along the highway running alongside the railroad line. The drivers take risks with their overloaded vehicles, as evidenced by the occasional truck lying overturned next to curves in the road.

The Shanxi region is one of the country's most important coalfields. During the day it resembles a smoke-filled back room in a bar. About 1,500 mines are in operation there, manned by thousands of miners working in shifts, except when a fire shuts down production yet again.

In December, 12 miners were killed in a mine near the city of Jiexiu. Authorities have kept it closed since then. Liang, 57, one of the survivors, speculates that large amounts of coal dust developed underground and triggered the explosion.

Liang has been working in the mine, at a depth of about 800 meters, since he was 22. The tunnels are so low, he says, that the workers can only move in a crouched or crawling position. They break the coal out of the seams with hammers and shovels, and sometimes even with their bare hands. They earn the equivalent of €130 ($169) a month for their backbreaking work.

Billions in Damage

When he turned 55, an age at which miners are no longer considered agile and flexible, his boss assigned him to different tasks. After that, Liang's job consisted of dragging around iron girders and wooden beams, which are used to reinforce the underground tunnels. "This job," he says with a groan, "is almost more difficult."

Accidents are commonplace in Chinese mines. Some 3,215 workers died in accidents in 2008 alone. Rarely are the rescue attempts as successful as one spectacular operation in early April, when rescue crews managed to pull 115 miners out of the Wangjialing mine alive after they had been trapped there for eight days. But it's not only in China that coal mining is a dangerous and dirty affair, as Greenpeace describes in a 2008 report entitled "The True Cost of Coal."

In the US state of Kentucky, for instance, mining companies blast away entire mountaintops to reach the coal more easily. In South Africa, the acidic pit water from abandoned mines is contaminating rivers. And in Colombia, mining companies are displacing families to expand the Cerrejón mine, the world's largest open-pit mine for black coal. Cerrejón is an important source of coal for German energy suppliers, and SWS is also thinking about importing its hard coal for Brunsbüttel from there.

According to Greenpeace's calculations, the coal business causes €360 billion worth of damage each year. Environmentalists warn that if mankind continues along its current path, CO2 emissions from coal will increase by another 60 percent by 2030. Given these consequences, can the world even afford to continue its reliance on power from coal?

The Future of Coal

Part of the answer can be found in Spremberg in southern Brandenburg. For the past year, energy producer Vattenfall has operated a small pilot plant at its Schwarze Pumpe power station in Spremberg that separates CO2 from coal and then captures it. "The technology is working," says Tuomo Hatakka, head of Vattenfall Europe. In a few years, the Swedish company plans to build a demonstration power plant and test it to see how it performs on a large scale. "There is a future for coal," says Hatakka. "Coal without CO2 emissions."

Another part of the answer lies in the town of Ketzin in northwestern Brandenburg. There, scientists from the Potsdam-based Geo Research Center are compressing CO2 into porous underground layers. So far, they have injected 36,000 tons at a depth of 650 meters. The results so far are promising, says coordinator Hilke Würdemann. "The conditions are just as we expected."

The energy industry is pinning its hopes on a combination of the Spremberg and Ketzin projects. The hope is that CCS technology could even turn into a significant source of exports, as it opens up new business areas for German companies like Linde, Siemens and BASF. The United States and China want to try out the first of the new generation of coal-fired power plants in the next few years.

It is clear that this will come at an enormous cost. Retrofitting power plants, transporting the CO2 through pipelines and compressing it underground -- all of these things bring up costs considerably, which will affect electricity prices accordingly. Experts estimate that it will take at least 10 years before the new technology is used on a large scale worldwide.

High Stakes

Much is at stake for the German utilities. Their power plants are old and urgently in need of renovation. The companies have to make decisions that will be valid for at least 40 years, the length of a generation of power plants. The problem is that no one knows whether the use of CCS technology will be worthwhile. It all depends on what happens to the price of CO2 emissions rights from 2013 onward, when utilities will be required to acquire the certificates at auction.

If prices remain low, it will be cheaper to buy emissions rights than to invest in CCS. Experts believe the threshold lies at €50 per ton of CO2, compared with the current price of about €15 a ton. But if certificate prices rise considerably, as some observers expect, the use of the technology will be worthwhile -- which would make it disastrous if the power companies were to take no action today.

There are also other problems yet to be solved. When CCS is used, power plants lose about 10 percent of their efficiency, because the capture of carbon dioxide consumes an immense amount of energy. In other words, more coal has to be burned to produce the same amount of electricity, which essentially means that raw materials are being wasted.

But no matter how sophisticated the technology, the biggest obstacle remains nearly impossible to overcome: the lack of acceptance by citizens who live near the planned CO2 storage sites. Representatives of local communities in eastern Brandenburg expressed their reservations when they visited the pilot plant in Ketzin last Wednesday. The site should not be allowed to turn into another Asse, they warned, referring to a controversial permanent repository for nuclear waste in the state of Lower Saxony.

An Enormous Gamble

But not everyone shares these concerns. Even the environmental movement is divided over the CCS issue. Greenpeace and BUND flatly reject the process. Greenpeace argues that the technology constitutes "an enormous gamble," while BUND describes it as nothing but a "fig leaf" for the power companies. Germany's Nature and Biodiversity Conservation Union (NABU) and the conservation organization WWF, on the other hand, believe that it is at least worth trying out. Their pragmatic argument is that it would be foolish to rule out this option from the outset. But does the world even have a choice?

Lord Nicholas Stern, at any rate, sees no alternative to clean coal technology in the foreseeable future. The economist, who caused a stir four years ago with his report on the costs of climate change, recently devised a scenario on what the global energy mix could look like in the future. Under his scenario, coal plays a key role in the mix, for many years to come -- because there is no other choice.

Even if the most optimistic forecasts came true and the world could satisfy half of its energy needs from renewable sources, massive amounts of fossil fuels would still be needed, Stern explains. He believes that industry, if it hopes to achieve the world's climate goals, must do everything possible to reduce CO2 emissions -- and that the use of CCS technology will be an unavoidable part of the equation. "We need several thousand facilities," Stern said recently, speaking at a conference in Berlin.

In other words, the age of coal is far from over. Until water, wind and the sun can provide enough energy, "clean" coal could at least play a role as part of a transition to renewable technologies. Of course, Stern has no illusions about the amount of time it will take before a low-carbon future can be reached. "It will be a long bridge," he said.