Is Coal Still the King?

nMéitàn .Faham. kolen. charbon. Koyala. Kohle. Sekitan. aran batu. Carbon. Kull.

Do the above words make any meaning to you? Well they all mean the same and that is COAL.

Yes COAL. The fossil fuel, the backbone of industrial revolution, the black diamond…………..

Environmental issues are constantly in news since for some time and even a bit more after the COP 21 Summit. Reducing greenhouse emissions has become a top priority of one and all (seems so).

Fossil fuels (especially Coal) are being highlighted as the main cause of polluting the environment and we hear multiple views on reducing /eliminating their use. “Coal Bashing” has become a sort of fashion in seminars and CXO speeches.

But how feasible is to implement the idea of “COAL ELIMINATION” from our system? Let us have a look into some aspects mentioned below:

  1. Generation of Electricity – Electricity is one of the major pillars of our lives, our economy. Currently Coal contributes to more than 30 % electricity generation worldwide.



Also coal is an important constituent of the fuel sources used by the world’s top electricity producing nations.

2. Huge number of plants (existing as well as planned) – As per Global Energy Observatory there are about 1500 coal fired power plants worldwide. These numbers are quite large and operationally challenging to shut down in a short timeframe.

Additionally there are more than 2000 plants planned worldwide


3. Cheap – The cost to electricity generated by coal is still cheaper than most of the other sources.


4.Huge Consumption and Abundant Resource – Coal is still used widely across the world in abundant quantities and the resource base is also quite large. Coal Mining is spread across 6 continents and more than 50 countries involving more than 300 companies.


5.Industrial Usage – Coal is used across many industries. A notable example is Steel manufacturing which uses coal as a major input. Globally steel consumption is projected to rise and hence the usage of coal.


6.Money-Spinner – Substantial revenues are earned by various countries who export coal. The coal industry is an important contributor to their GDP.


Indonesia and Australia are prime examples where revenues worth billions of dollars from Coal Exports contributes to their GDP.


7. Employment – Coal Industry is one of the largest employers in the world. It provides livelihood to millions across the globe. In USA only, there are more than 70,000 workers employed in the coal sector.

8.Carbon Capture and Storage (CCS) – Carbon Capture and Storage (CCS) will play the role of White Knight for this coal industry and rescue it from its Achilles’ heel – the emissions. There has been a fall in coal consumption since past year due to reasons like slow economic growth and emission norms. Renewables and Natural Gas are eating into coal’s share of the energy pie. Emission related issues are the main reasons for the same. CCS can play an important role towards mitigating this issue for coal fired power plants. CCS can help reduce emissions from coal fired power plants which will help them to meet the required norms and thus prevent them from being closed. CCS enhances the efficiency of the power plants as depicted in below chart


To save plants from being shut down prematurely has an economic benefit. Also the captured CO2 can be sold for a monetary value which adds to the income of the asset. The overall economic benefits of CCS is to the tune of millions of dollars. There are many CCS Projects being are various stages of planning and implementation worldwide

9. Supplementary – Other benefits like extraction of Rare Earths Elements (REEs) from coal and byproducts adds to the aura of Coal. As per latest research coal and its byproducts is helping this REEs industry which impacts more than $300 billion of US economy.

As per IEA, The amount of proven recoverable coal reserves exceeds one trillion tonnes. Coal is distributed across every continent and every region of the world. The United States has close to 30% of the world’s coal reserves, followed by Russia at about 20% and China at about 15% each. Totaling 275 billion tons of coal in the U.S., current domestic demand in USA would amount to about 250 years of consumption.

Coal Industry is related to mankind since longtime. The bottom line is Coal has been and it will continue to be part of our daily lives for quite some time in the upcoming years.

So the question to be asked “Is Coal still the King”?

If Yes, then for How Long? If No, then who is the King?


Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily represent those of the company (Markets and Markets).

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