King Coal's reign has years to run

By DON ELDER*

Coal may be the fuel that drove the industrial revolution, but it is also well placed to be a key part of New Zealand's 21st century economic growth.

It will take up to 30 years or more for renewables such as solar and wind power to become affordable and available in sufficient volumes to meet industry's increasing energy demands.

By 2015, if there is no significant new generation and demand continues to grow at its current rate, New Zealand's electricity demands will exceed supply by the equivalent of four Clyde dams, three Huntly power stations or 20,000 wind turbines.

New Zealand has 10 billion tonnes of economic coal reserves - equivalent to 50 Maui gasfields - which we are using at around 2 million tonnes a year.

Coal burned in open fires is expensive and achieves at best 20 per cent efficiency. Most of the heat disappears up the chimney, and the smoke contributes to air pollution.

But coal burned in enclosed domestic and industrial appliances meets stringent emissions standards. Efficiency above 60 per cent for domestic appliances and 80 per cent for industrial boilers can be achieved.

New Zealand has a choice. It can use a fuel which is available, is already the lowest-cost energy form for most industrial processing and offers one of the lowest-cost options for most new electricity generation.

Or it can face the prospect of escalating prices, increasing power shortages, "brown outs" in dry winters and seeing industries - and thousands of jobs - being forced to shift overseas.

Technology enabling the development of new energy sources - such as hydrogen-powered fuel cells - is also driving advances in the use of coal worldwide.

New "clean coal" technology substantially improves the efficiency of coal used in industry and in coal-fired power stations, reducing emissions of gases such as sulphur dioxide and nitrous oxides to near zero.

The United States, where up to 60 per cent of electricity is generated by coal-fired plants, is spending US$5 billion ($9.1 billion) on further developing clean coal technology to enhance the efficiency and environmental acceptability of coal use.

The efficiency of coal-fired power generation has increased from 5 per cent in 1900 to around 45 per cent for plants today.

New conventional plants are achieving 50 per cent efficiency. New processes and materials will enable more than 55 per cent efficiency.

Other research initiatives are looking at ways to capture and store, or use, the carbon dioxide produced from burning coal.

Solid Energy is working with international researchers to ensure that these new technologies will eventually be available in New Zealand.

It is also committed to being part of a transition to renewable forms of energy.

But while renewables offer wonderful long-term prospects, they are unlikely to have a major impact on energy supply in New Zealand in the short to medium term, without having a major effect on the price of energy.

Until that time comes, we need a range of cost-effective energy sources, including coal, which will ensure that we have sufficient supply to meet our increasing energy needs.

* Don Elder is chief executive of state coal-producer Solid Energy.