Patrick%20Carragher

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Patrick Carragher

• Coal Supplies and Clean Coal Technology

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Global Coal Demand (Thermal)

• Billion Tonnes
• 1980 3.0
• 2002 4.8
• 2030 (est) 6-7

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UK Coal Production (Underground)

• Million Tonnes
• 1955 211
• 1983 105
• 1993 43
• 2005 10

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UK Coal Production (Opencast)

• Million Tonnes
• 1983 14
• 1990 15.7
• 1996 16.6
• 2003 13.1
• 2005 10.2
• Decline due to presumption against

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Global Trade

• Most coal production consumed locally
• International coal traded in 2003 - 720 mt
• Two main trading areas Asia and Europe
• Two trading types thermal and coking
• Main suppliers to international market
• Australia
• Indonesia
• South Africa

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• Russia/Poland
• Columbia/Venezuela

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Principal Suppliers to Europe

• Russia
• Australia
• Poland
• South Africa
• Incremental production in Columbia will be taken
  by USA
• Incremental production in Indonesia (and some
  extent Australia) will be taken by China/Pacific
  Rim

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UK Market

• 2001 2002 2003 2004 2005
• Electricity Generation 50.9 47.7 52.5 50.5 52.2
• Domestic 2.9 2.2 1.6 1.7 1.3
• Industry 1.5 2.2 1.6 2.1 2.0
• Coking 7.9 6.5 6.6 6.4 6.6
• Total 64.2 58.7 62.3 60.7 62.1

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UK steam imports since 1999 mt
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Imports by supplier ()
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Can deep-mined coal compete?

• Costs 1.41/GJ now, have been as low as the
  1.20s and as high as the 1.50s
• Delivered prices are 1.80-ish and UKCs received
  price is 1.39/GJ
• Quality is poor compared to imports (Sulphur)
• A 2.00 Pound, or an import price collapse will
  spell trouble for the UK production
• Would the generators stay with the indigenous for
  security?

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Is there room at the ports?
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Imports vs UK output mt
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Imports Conclusions

• International market likely to remain tight
• Russia to remain main UK supplier provided high
  price
• No guarantee for indigenous UK coal production
• But indigenous important bulwark against
  international supplied/price volatility
• Opencast particularly vulnerable

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Clean Coal

• Existing fleet 40 years old
• Pulverised fuel (pf technology)
• Environmental concerns of 1980s early 1990s acid
  rain
• Hence Large Ccombustion Plant Directive

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Late 90s Environmental Focus on Carbon

• EU Emissions Trading Scheme
• National allocation plan
• Current fleet 29 GW (opted in) 20.5 GW

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• Opted in plant can run to 2016 possibly 2020
• Opted out plant must close by 2015

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New Technologies

• IGCC and Advanced Supercritical (ASC)
• Increase thermal efficiency
• Prospect of further development

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Clean Coal Task Group

• Reported in June and recommended retention of
  current generating capacity with new Clean Coal
  Technologies
• However, Government assistance necessary on
  number of levels
• Price of carbon critical
• Market certainty for investment critical

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Current Projects

• IGCC and ASC
• Power Fuel Hatfield - 800 MW
• Killingholme E.ON - 1000 MW
• Progressive Energy - Teeside (EOR?) - 800MW
• Progressive Energy - Valleys Project 450 MW

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Supercritical

• RWE Tilbury - 1000 MW
• E.ON Kings North - 2X800 MW
• Scottish and Southern - Ferrybridge - 500 MW

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Carbon Capture and Storage

• All the above projects are CCS adaptable
• Peterhead (gas) EOR project
• Infrastructure essential for CCS
• New financial instruments

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Conclusions

• Much progress made
• More to be done
• Government and EU support essential