Given the decline of coal recently in the U.S. and Europe, it may be surprising to see demand for coal growing in En-ROADS. Keeping coal in the ground is one of the highest leverage actions in addressing climate change. Coal is the most harmful fossil fuel in terms of carbon emissions, as well as in air pollutants that cause severe health impacts. It is a dominant source of energy globally, however, because it is relatively inexpensive to mine and transport.
Here we explore three main ideas to help you understand the dynamics of coal in En-ROADS:
The En-ROADS Business as Usual scenario for coal is consistent with other models.
Several dynamics drive the persistence and growth of coal.
You can explore different strategies that reduce coal more directly in En-ROADS, in line with reducing temperature.
1. The En-ROADS Business as Usual scenario for coal is consistent with other models.
The En-ROADS Business as Usual (baseline) scenario for coal primary energy demand is consistent with the results of other simulations in the academic and business literature.
The graph below compares the En-ROADS Business as Usual scenario to baseline scenarios from nine different models, including the International Energy Agency’s (IEA) Current Policies Scenario in its World Energy Outlook (WEO) report in 2018, Shell’s Mountains scenario, and the MIT Economic Projection and Policy Analysis Model (EPPA), as well as six major Integrated Assessment Models (Riahi et al., 2017; Rogelj et al., 2018; Gidden et al., 2019). The En-ROADS Business as Usual scenario (the blue line below) for primary energy demand from coal aligns with or is slightly higher than these other models. It is slightly above the IEA’s 2040 forecast, it falls in the middle of the 2050 forecasts, and it falls at the higher end of the spread of the 2100 forecasts.
2. Several dynamics drive the persistence and growth of coal:
There is a lot of coal in the ground. Estimates suggest that there is enough coal in proven reserves to last over 130 years at the current rate of production. However, some analysts have questioned the assumptions regarding the amount of coal resources available and reached different conclusions, and there is some debate about the economics of coal versus renewable energy.
If you want to explore a world with more or less coal resources, you can alter the assumptions built into En-ROADS. Click the Simulation drop-down menu at the top of the En-ROADS simulator and select Assumptions. Under “Initial resource remaining” you can alter the total initial amount of coal, oil, and gas resources available at the beginning of the simulation.
Coal is still relatively inexpensive, and the energy economy is not “winner take all.” Alternatives to coal, such as wind and solar, are getting even more inexpensive. However, coal still remains inexpensive.
A massive amount of new coal infrastructure is planned or under development. Coal use has declined in the U.S. and European Union, in part due to the availability of cheap natural gas from shale, but demand is increasing in many developing economies, particularly China, India, Turkey, Vietnam, and Indonesia. Coal use increased in 2017 and 2018 and worldwide provided 38% of energy for electricity in 2018. Global coal demand increased by 75% from 2000 to 2013.
Planned coal infrastructure, particularly in Asia, will lock in substantial long-term emissions. As of January 2020, 538 GW of new coal infrastructure was under development worldwide. To put that in perspective, 538 GW is approximately twice the current coal power capacity in the U.S.
However, groups like the Sierra Club have been successful in preventing the construction of planned coal infrastructure or causing companies to shut down operating coal power plants. U.S power infrastructure from coal fell by a record 18% in 2019, in part due to the efforts of community activists. The U.S. retired 106 GW of coal plants between 2006 and 2019 and cancelled 28 GW of planned coal plants.
Current coal infrastructure is relatively young. Capital goods and infrastructure are “locked into” the current fossil fuel infrastructure until it is retired, and changing to alternative energy sources would have a high cost even if the price of electricity from those sources is lower. 60% of the global coal infrastructure is 20 years old or younger. The average lifetime of a coal-fired power plant is approximately 46 years, though it can be 50-60. Countries with an increasing demand for electricity cannot afford to retire coal plants. In Europe, in contrast, demand is leveling off or falling, which means that renewable energy can be more easily added to the energy mix, replacing existing capacity.
Non-economic reasons. Coal secures some investments for non-price-related reasons, such as nations’ goals for energy independence and the significant political power of the coal industry.
3. You can explore different strategies that reduce coal more directly in En-ROADS, in line with reducing temperature. Here are some suggestions:
For further reading: