Experts predict COVID-19 will spell the demise of coal burning power plants

CREDIT: Adapted from the article Coal Industry will never recover after coronavirus pandemic, say experts, by Jonathan Watts and Jillian Ambrose

Crisis has proved renewable energy is now a safer investment, and accelerated the shift

The global coal industry will “never recover” from the Covid-19 pandemic, industry observers predict, because the crisis has proved renewable energy is cheaper for consumers and a safer bet for investors.

A long-term shift away from dirty fossil fuels has accelerated during the lockdown, bringing forward power plant closures in several countries and providing new evidence that humanity’s coal use may finally have peaked after more than 200 years.

That makes the worst-case climate scenarios less likely, because they are based on a continued expansion of coal for the rest of the century.

Even before the pandemic, the industry was under pressure due to heightened climate activism, divestment campaigns and cheap alternatives. The lockdown has exposed its frailties even further, wiping billions from the market valuations of the world’s biggest coal miners.

Coronavirus will wipe out the demand for fossil fuels, says IEA

As demand for electricity has fallen, many utilities have cut back on coal first, because it is more expensive than gas, wind and solar. In the EU imports of coal for thermal power plants plunged by almost two-thirds in recent months to reach lows not seen in 30 years. The consequences have been felt around the world as well.

A cleaner future? The pandemic has shifted focus from hydrocarbons to distributed energy resources (DER), and it’s looking increasingly likely to remain that way.

This week, a new report by the US Energy Information Administration projected the US would produce more electricity this year from renewables than from coal for the first time. Industry analysts predict coal’s share of US electricity generation could fall to just 10% in five years, down from 50% a decade ago. Despite Donald Trump’s campaign pledge to “dig coal”, there are now more job losses and closures in the industry than at any time since Eisenhower’s presidency 60 years ago. Among the latest has been Great River Energy’s plan to shut down a 1.1-gigawatt thermal plant in North Dakota and replace it with wind and gas.

Rob Jackson, the chair of Global Carbon Project, said the pandemic was likely to confirm that coal will never again reach the global peak seen in 2013: “Covid-19 will slash coal emissions so much this year that the industry will never recover, even with a continued build-out in India and elsewhere. The crash in natural gas prices, record-cheap solar and wind power, and climate and health concerns have undercut the industry permanently.”

Records are falling thick and fast. By Friday, the UK national grid had not burned a single lump of coal for 35 days, the longest uninterrupted period since the start of the industrial revolution more than 230 years ago. In Portugal, the record coal-free run has extended almost two months, the campaign group Europe Beyond Coal recently reported.

Powerlink’s study will look at addressing system strength challenges by exploring the merits of several technical solutions. Business and regulatory models will also be considered to facilitate lower-cost solutions and remove commercial barriers.

Last month Sweden closed its last coal-fired power plant, KVV6 in Hjorthagen, eastern Stockholm, two years early because the mild winter meant it was not used even before the pandemic. Austria followed suit with the shutdown of its only remaining coal plant at Mellach. The Netherlands said it would reduce the capacity of its thermal plants by 75% to comply with a court order to reduce climate risks.

More importantly, in India – the world’s second-biggest coal consumer – the government has prioritised cheap solar energy rather than coal in response to a slump in electricity demand caused by Covid-19 and a weak economy. This has led to the first year-on-year fall in carbon emissions in four decades, exceptional air quality, and a growing public clamour for more renewables.

Elsewhere in Asia, the picture is mixed. A few years ago, Indonesia, Vietnam and the Philippines were expected to be the industry’s biggest growth areas, but the pandemic, falling renewable prices and a growing divestment campaign have put several major coal projects on hold. South Korean president Moon Jae-in has been re-elected on a pledge to phase out domestic coal use, and many in his ruling coalition are pushing to end financing of overseas projects. In Japan, the big three commercial lenders and the governor of the Japan Bank of International Cooperation have recently said they will no longer accept proposals for coal generation.

Other money taps are also being turned off, as investors and finance houses respond to scientific advice and campaigns by divestment activists and school strikers such as Greta Thunberg.

“The economics of coal were already under structural pressure before the pandemic. And coming out of it these pressures will still be there – but now compounded by the impact of the pandemic.”

Michael Lewis, head of climate change investment research at French bank BNP Paribas.

BNP Paribas is one of a growing list of financial institutions which have chosen to sever ties with coal. The bank said last week that it would accelerate its planned exit from coal financing to 2030 to bring its portfolio in line with the Paris climate goals sooner.

An unexpected win for climate activists – coronavirus has transformed energy generation in a way the world wasn’t expecting – image credit: Grist

In the same week, the Norwegian sovereign wealth fund – the world’s biggest – ditched a host of coal mining and energy companies, including Glencore, Anglo-American, Vale and AGL over climate concerns. This follows coal blacklisting announcements by BlackRock, Standard Chartered and JPMorgan Chase.

The fossil fuel has fallen from favour in the eyes of many investors due to rising climate concerns, cheaper renewable energy alternatives and a public backlash against air pollution.

“The public health benefits of cleaner air will be front and centre after weeks of lockdown that have prompted blue skies and clean air in Asia’s megalopolises,” Lewis said. “This pressure from the finance sector will only accelerate going forward, pushing the cost of capital for coal projects even higher.”

Even before the pandemic, Australian coal companies said they were finding it hard to find financing for mines and port facilities due to the international divestment campaign. This is not the only economic squeeze. A near-30% fall in the price of thermal coal has made more than half of production unprofitable, prompting several firms to warn of pit closures and layoffs.

The elephant in the room is China, which burns half of the world’s coal and is the biggest financier of mines and power plants in Asia and Africa – largely to provide an export market for its domestic manufacturing and engineering firms. A few years ago, domestic coal consumption fell, prompting hopes that president Xi Jinping was committed to a shift away from dirty, high-emitting power production. But after the lockdown, the political priority is to jumpstart the economy. Provincial governments are now working on a slew of new thermal plants. But they are running at less than half of capacity because demand for coal has not returned to its previous level.

“Covid-19 has made clear that China and India have built more than they need. Even before the crisis, they had overcapacity. Now with lower demand, you can see everything is a mess,” said Carlos Fernández Alvarez, lead coal analyst at the International Energy Agency.

Alvarez said coal had been hit hardest by the pandemic, but he cautioned the decline could be temporary unless governments invest in renewables to pull economies out of the lockdown. “We have to look at this structurally. If there is high energy demand again in the future, it will probably be coal that picks up the slack because it is the marginal supplier,” he said.

While nobody is expecting coal to disappear any time soon, Ted Nace, director of Global Energy Monitor, believes the balance has shifted for good. “Coal is definitely on the downturn and this pandemic is going to accelerate that. Demand should come back to some degree next year. But there is a very strong argument that it is not going to just bounce back.”

Thinking forward: renewables are looking increasingly like the future of energy generation, but with it comes a host of new challenges.

End of the original article Coal Industry will never recover after coronavirus pandemic, say experts, by Jonathan Watts and Jillian Ambrose

Variable energy sources like wind and solar bring a host of challenges to power grid management that aren’t a factor with traditional hydrocarbon generation. The dependence on the weather is one. Forecasting the weather has got increasingly accurate as technology has advanced, but unpredictable shifts do still occur and this can play havoc on power supply management.

The rise of 5G in telecommunications management is a significant threat to meteorology’s ability to predict the weather as it interferes with ambient water molecules, adding noise to data and potentially setting weather prediction back two decades.

Perhaps more of a risk is the significant drop off in demand as the coronavirus pandemic has put a halt to heavy industry and the normal operation of the economy. With tens of thousands of rooftop solar units feeding power into the grid without the ability for grid managers to stop it, the lack of demand threatens to overwhelm grids and cause rolling blackouts.

Grid managers say greater visibility and real time management of networks is needed to avert disaster.

Introducing VECTO System – enterprise-wide, real-time and centralised control of the power grid.

Developed in Cape Town, South Africa, VECTO System is an innovative grid management system designed to meet Africa’s steep energy challenges. VECTO System takes an innovative approach to handling the challenges of grid resilience in a market where cost and aging infrastructure are an ongoing issue. VECTO System aims to deliver real time, dynamic visibility of the entire power grid by installing an edge computing device at each node along the network from power generator to mini-substation.

Each VECTO System device has a built-in GPS clock that is time synchronised to within ±100ns from absolute time, which means that the fleet of devices on the network work in harmony to provide a real time view of the grid. The device’s edge computing capabilities analyse the data locally and then stream the data to a centralised data store. For the user, VECTO System’s data is visualised on a software platform that allows engineers to see the entire grid at once, or to zoom in on any location to manage the grid remotely. When network events occur, VECTO System delivers real-time notifications the moment network performance moves out of accepted safety thresholds. 

This centralised, synchronised, real-time, and historical power grid data allows engineers to ‘see’ the power grid as never before.

The VECTO 3 edge-computing measurement device records and reports on a comprehensive set of RMS, phasor, harmonic, environmental & synchrophasor data, encompassing over 9,000 parameters.

VECTO System’s visualisation platform reports and interprets the data for the end-user. Available for all smart devices, VECTO Grid OS will notify the appropriate team members at the moment anomalies occur on the network. If storm clouds suddenly begin to form over the city and solar supply drops rapidly, VECTO Grid OS will send emergency push notifications and emails in real-time to the people who matter.  

Beyond emergency notifications, VECTO System’s unique capabilities also unlock:

  • Remote grid management and protection mechanisms
  • Wildfire detection and prevention
  • Safe transition to the distributed energy grid
  • Proactive power quality compliance monitoring

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VECTO System is set to change the way the power grid is managed. If you’d like to see more of what the system is capable of, provide your details below and we’ll get back to you.

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