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How many gigabytes of data do you consume every month? In an era where accessing websites, downloading files and scrolling through social media feeds is second nature, we rarely consider how much data we are consuming, or its environmental cost. Researchers at Imperial College London, however, found that downloading just one gigabyte of data requires 200 litres of water. Water is needed to cool the massive data servers that search engines and websites, such as Amazon and Google, use to power their internet services. These facilities also consume electricity at an astonishing rate, with data centres accounting for 2% of the US’ annual power consumption. Meanwhile, data centres in China use as much electricity as Hungary and Greece combined

There are nearly 3 million data centres in the US alone, and a 2014 report from the US Department of Energy found that together, these data centres consume 165 billion gallons of water annually. To put this in context, the World Health Organization estimates that adults need roughly 5 gallons of water a day to meet basic health and hygiene standards. This means that the annual water usage by data centres in the US could support over 90 million people’s basic water requirements for one year. 

Data centres require significant amounts of water due to a process known as “evaporative cooling.” In this process, water is used to cool the air around the server’s processing units. In the past, data centres used air conditioners, but this approach was energy intensive and expensive to operate. Otto Van Geet, an engineer at the National Renewable Energy Laboratory, observed the trade off between water and electricity usage, commenting,  “if the water consumption goes down, energy consumption goes up and vice versa.”

Emma Weisbord, an officer at the International Water association, noted that the water required to support cryptocurrencies like Bitcoin also “cannot be ignored.” One estimate found that Bitcoin’s annual energy consumption exceeded that of countries like Switzerland and Kuwait. Cooling and powering cryptocurrency servers is a water-intensive process, with Bitcoin alone requiring up to 411 billion gallons of water per year. 

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Much of this water is diverted from water scarce communities, particularly in the American South-West. Research from the Illinois Institute of Technology found that data centres in the US are often established in small rural towns, many of which already suffer from water scarcity. These small towns have to make trade-offs between the economic development data centres generate and long-term water access. “With climate change, we are expected to have more prolonged droughts,” said Venki Uddameri, director of the water resources center at Texas Tech University. “These kinds of water-intensive operations add to the local stress.” 

In response to these concerns, some internet companies have tried to improve their water efficiency. For example, Google is experimenting with using reclaimed wastewater and recycling water through its cooling systems multiple times. In 2013, Facebook opened a data centre in the Arctic Circle in Sweden to attempt to make use of naturally cooler temperatures. Similarly, Microsoft has been testing underwater data centres since 2016 to reduce the cost of cooling, as well as reach large populations located in coastal cities. 

In 2021 annual spending on data centres is expected to top USD$200 billion globally, a 6.2% increase from 2020. The COVID-19 pandemic saw a 70% increase in internet usage, with Facebook alone recording a 27% increase in usage. Our internet consumption is accelerating at an unprecedented rate, and the number of internet servers required to support our online presence will grow in tandem. 

Just writing this article required around twenty litres of water, and for every hour that you browse the internet reading similar pieces, you use about five. If you want to decrease your online environmental impact, try unsubscribing from unnecessary emails, limiting online movie streaming, reducing the amount of information you store in cloud systems, and choosing green web hosts. To truly limit the internet’s environmental cost, however, consumers will need to continue to demand accountability and ingenuity from the digital giants that profit from our reliance on the internet. 

A rich and biodiverse Indian forest called Hasdeo Arand, home to indigenous communities, ancient trees, elephants and sloths, is under threat by the coal mining industry. Under a new ‘self-reliant India’ plan issued by the prime minister, Narendra Modi, that aims to boost the economy post COVID-19 and limit costly imports, 40 new coalfields in some of India’s most vulnerable forests will be opened to commercial mining. 

The plan marks a shift from state-owned coal to the creation of a privatised, commercial coal sector in India. Among those supporting the plan are India’s wealthy and influential industrial giants, including the US$14 billion Adani group run by the Indian billionaire Guatam Adani, who manages India’s largest coal power plants and is well acquainted with Modi. 

However, not all are on board with the new plan. The coal auction has sparked controversy at both the local and political level for its obvious environmental ramifications, namely the coalfields in India’s forest lands. More than seven coal blocks up for auction have been previously recognised as prohibited areas for mining due to their environmentally valuable status, and approximately 80% of the expected coalfields are home to indigenous communities in India who depend on the forests. 

Four state governments, namely West Bengal, Maharashtra, Jharkhand and Chhattisfarh, have written to Modi in opposition or raised legal objections to the plan. One coalfield that intersects India’s Tadoba tiger reserve in Maharashtra has already been removed. 

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Adivasi Objection 

Local Adivasi- a term used to describe India’s indigenous people- village leaders wrote to Modi demanding a stop to the auction in Hasdeo Arand.

These communities have witnessed first-hand the environmental obstruction caused by open-cast coal mines. In 2011, two vast open-cast mines were dug out on the outskirts of the forest, demolishing the fragile land and polluting the surroundings with smoke, heat, noise and poison.

With this, crime became more prevalent and elephants that lived in the forest became more aggressive, due to the hostile living conditions, leading to dozens of deaths. Locals say that the prospect of more blocks of the forest being handed over to private mining operations as coalfields will destroy five villages and displace more than 6 000 indigenous people in India. Thousands of hectares of trees will also be torn down to make room for mines and roads. 

Green Recovery Post COVID-19

With many governments across the world aiming for a ‘green recovery’ post COVID-19, there is “no good reason for any country to include coal” in recovery plans, as stated by the UN secretary general, António Guterres. 

By putting fossil fuel at the forefront of its recovery strategy, India is prioritising economic opportunity over environmental sustainability and longevity. 

Modi hopes for India to be the world’s largest exporter of coal, a concerning goal considering that local coal is made up of 45% ash content, making it some of the most polluting coal in the world. Additionally, as countries move away from coal, there may not be the demand for Indian coal. Besides, many major factories in India cannot run on such ‘dirty’ domestic coal, meaning that they will have to import coal from abroad. 

India is the world’s second largest consumer of coal, importing 247 million tons annually and costing more than US$20 billion. However, due to the lasting impacts of COVID-19, electricity demand is forecast to fall by up to 15% over the next five years. 

A report published last week by the Centre for Research on Energy and Clean Air found that the ‘current state-run coal mines of India already have capacity to produce 20% more coal than the expected demand in 2030’.

Environmental Activists 

Environmental and climate activists question why India does not rely on more environmentally sustainable energy sources and invest in domestic renewable energy such as solar instead.

In August, Modi inaugurated Asia’s largest solar farm in Madhya Pradesh, which makes sense given that India is the world’s cheapest producer of solar power and the cost of constructing a new solar plant is 14% less than that of building a new coal plant. In terms of investment and sustainability, the solar industry should trump the coal industry- especially in light of a global shift to a green economy. 

With correct investment, it has been estimated that the solar energy industry could generate as many as 1.6 million jobs in India by 2022- far greater than what would be generated by domestic coal. 

However, India’s secretary for coal, Maddirala Nagaraju, says that the demand for coal in the foreseeable future is bound to rise and therefore insists that increased domestic coal-mining is the ‘cheapest way of meeting the energy needs of the people’.

“We are the country with the fourth largest coal reserves in the world and we need to provide energy security for over a billion people: coal is the only way,” said Nagaraju.

He acknowledged that there would be ‘costly trade-offs’ in transforming protected forest areas into mining sites, but said this action had the support of local communities who ‘want the land to be acquired because they get high compensation packages’. 

He asks, “How else will we develop these Adivasi people in central India?”

Opponents to the Plan 

Former environment minister, Jairan Ramesh, is among the most vocal opponents of the plan and wrote a letter to Modi condemning coal auctions. 

During his time in office, in 2010, a survey was conducted on the biggest coalfields in India which found that 30% were “no-go areas” due to their biodiversity or resident tiger or elephant populations.

Since Modi’s win in 2014, that 30% of coalfields in India has been reduced to about 5%- demonstrating his lack of concern in investing in environmentally sustainable infrastructure.

Ramesh alleged this resulted from the pressure of the powerful corporate coal lobby, Adani: “Adani is behind this … He is one of the most influential forces on the government.”

“Modi poses as a great environmental champion globally but his track record is one of complete loosening of environmental laws and regulations,” Ramesh added. “The corporate lobbies are just too powerful and in the name of ease for businesses, the environment has become the biggest casualty.”

The Adani group rejected the allegations as baseless and politically motivated. A spokesperson said the company ‘has always strived to provide balanced and affordable energy supply to an energy-deprived population of 1.3 billion people whose per capita energy consumption is less than half the world’s average and almost one-tenth of many of the developed economies’. 

They add, “The Adani Group has been a leading contributor to India’s vision for a balanced energy mix and an enabler of India’s leadership in meeting its Paris agreement target.”

The company says it aims to become the world’s largest renewable energy company by 2025.

Featured image by: Adam Cohn

Calls from Australia for an investigation into China ’s role as the origin of the COVID-19 pandemic has triggered a coal trade war between the two countries, which will have harmful impacts on both countries. While Beijing has responded by blocking the import of Australian barley and beef from major processing plants, Australia continues to put pressure on China’s methods of handling the virus despite risk of further trade retaliation. 

China is Australia’s largest trading partner, with China receiving about AUS$123.3 billion (USD$85bn) worth of goods in 2019, equivalent to over 30% of Australia’s total exports. A trade war between these countries could have disastrous consequences for Australia, whose economy was losing about US$2.6bn per week at the height of COVID-related shutdowns. Following Australia’s demands for an investigation into the pandemic, China has blocked Australian imports of barley and beef, worth a total of AUS$9.9 billion in 2017 to 2018. 

Chinese investment in Australia had already fallen by 58% from AUS$8.2 billion to AUS$3.5 billion in 2019, as Australia changed its screening rules for foreign projects to stop Chinese buyers from purchasing strategic assets at low prices. Other countries, such as the US, Canada and members of the EU have also implemented tighter foreign investment screening measures. 

With support from powerful western Allies, including the US, Australia is confident that it can continue to put pressure on China to carry out investigations. However, this puts them at risk of further trade retaliation. 

Tensions have risen as reports suggest that China is now targeting Australian coal by clamping down on import quotas. Australia’s top export commodities to China include iron ores and concentrates, which take up an approximate 15.2% share and coal, with 15%. There was a -2.0% change in the share of iron ores but a 11.3% change in the share of coal from 2017 to 2018, showing the increasing importance of coal exports in Australian trade. In response to this news, Australian coal mining firms are looking to diversify and build their market into southeast Asia in case such quotas come into effect.

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In 2019, China’s global purchases of coal totalled US$18.9 billion, with almost 50% of this coming from Australia. Therefore, by applying strict trade barriers on coal coming from Australia, the amount of coal being imported would be cut down considerably. Since China actually imports more coal than it needs and has been pushing for better use of its own resources, this would affect Australia more than China.

The importance of coal exports to Australia allows China to use it as a trading threat, since China has alternative sources of supply from other exporting countries, such as Mongolia, Indonesia and Russia. Due to high amounts of imports during the first five months of the year, China has started to step up its custom checks for coal imports which has led to lengthy processing delays at ports. It appears as though China is looking to boost its domestic coal industry. 

However, doing so will go against China’s 13th Five-Year Plan, which places a heavy emphasis on long term sustainability. There are three key areas to the plan, including the promotion of new businesses and business models that support sustainability. This means that businesses must provide services that are resource-efficient enough for at least 10 billion people to use without negatively impacting the planet. 

While coal is widely used to generate electricity due to it being very energy dense, it releases more acidic and greenhouse gas pollutants than both oil and gas, making it an unsustainable and unclean form of energy. 

Furthermore, the coal industry in China is struggling financially, with profits falling since 2016 and turning into losses from 2017. There is significant overcapacity in the sector as China overinvested in the coal power sector; major companies are operating on losses as high as 50% and have debt ratios exceeding 200%, with some plants having to declare bankruptcy and shut down. A study from the University of Maryland projected that the average utilisation rate of the country’s coal plants could drop to 45% by 2025. 

In the last three years, China cancelled 103 projects that were planned or under construction, which eliminated 120 gigawatts of potential coal-fired capacity. However, coal still accounts for 57.7% of its total energy use as of 2019. 

Despite China cancelling a significant amount of coal-fired projects, the country is continuing to grant permits for coal-fired power plants at the highest rate since 2016, and has built nearly two-thirds of the world’s operating plants and is home to nearly 90% of generators under construction, according to a recent report by the Global Energy Monitor, a research and advocacy group. 

The International Energy Agency predicts that the world demand for coal is set for its biggest annual drop since World War II because of COVID-19. 

Nevertheless, efforts continue to be made to stimulate China’s domestic coal industry, according to a report published by the National Energy Administration in February. The report indicates a loosening in restrictions for new coal-plant approvals. Additionally, the development of major infrastructure programs and other stimulus to counteract the impact of the COVID-19 pandemic have been announced, with no mention of prioritising and promoting clean and renewable energy, indicating their continuing dependence on coal as a source of energy. 

Thankfully, China has made remarkable strides in the renewable energy sector and, according to a report published by the Global Commission on the Geopolitics of Energy Transformation, has become the world’s largest producer, exporter and installer of sustainable energy sources such as solar panels, wind turbines, batteries and electric vehicles.

It is difficult to say why China continues to prop up its coal industry despite it not having significant financial returns, but what is clear is that China has more than enough of its own coal, and so any attempt by Australia to weaken China’s reputation in the international community will unfortunately affect it more than China, unless Australia can find suitable trading partners. 

However, it is concerning that China continues to develop coal power plants at a time when the planet is trying to keep global warming under 2 degrees Celsius. It should continue to invest in renewable energy projects and divest from fossil fuels, especially since renewable energy has shown to be more profitable than fossil fuels. 

Featured image by: Rose Davies

Over the first half of the year, more coal power generation capacity has shut down than has started operation around the world for the first time on record, according to a US research and advocacy group. 

The Global Energy Monitor, which tracks fossil fuel development, found that the closure of coal generators across Europe and the US, exceeded stations being commissioned, largely in Asia. 

China, the world’s biggest greenhouse gas emitter, dominates coal power development, having built nearly two-thirds of the world’s operating plants and being home to nearly 90% of generators under construction. 

However, the amount of coal power commissioned in China to the end of June was more than 40% below the same period last year, at 11.4 gigawatts compared to 19.4 GWs, because of COVID-19.

Thankfully, India shut more capacity than it opened. New Delhi commissioned 0.9 GW of coal generation, while 1.2 GWs were closed and more than 27 GWs of proposals were cancelled. 

Christine Shearer, Global Energy Monitor’s coal program director, says that India had reduced the amount of coal it planned to build because it struggled to compete with cheaper alternatives, such as new solar and wind. 

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She adds that the global decline was due to COVID-19 and record retirements in the EU after the carbon price was increased and pollution regulations tightened. Coal-fired generation fell by an estimated 3% last year. 

China and India’s coal fleets were running at barely half capacity before the pandemic started, but China was continuing to grant permits for construction at the highest rate since 2016. 

There is already overcapacity in China’s coal industry. A study from the University of Maryland projected that the average utilisation rate of the country’s coal plants could drop to 45% by 2025. 

“The COVID pandemic has paused coal plant development around the world and offers a unique opportunity for countries to reassess their future energy plans and choose the cost-optimal path, which is to replace coal power with clean energy,” says Shearer.

Globally, 18.3 GWs of coal power was commissioned in the first half of the year, and 21.2 GWs shut. About 8.3 GW of this was in the EU, with Spain shutting half its fleet and Britain going coal-free for two months, and 5.4 GW in the US. 

Japan opened 1.8 GW but plans to retire 100 inefficient coal-fired units and Germany opened the 1.1 GW Datteln coal plant. About 72 GW of planned new coal was cancelled, but 190 GW remains under construction. 

IPCC scenarios suggest that coal power generation must fall 50% below current levels by 2030 to keep global warming under 2 degrees Celsius by 2100. 75% will need to shut over the decade to stay below 1.5 degrees Celsius. 

Despite this, world demand for coal is set for its biggest annual drop since World War II because of COVID-19, according to the International Energy Agency. Additionally, global investment in offshore wind power increased 319% in the first half of the year, with financing approved for 28 new projects totalling USD$35 billion, more than what was approved in all of 2019

Featured image by: Henk Verheyen

The COVID-19 crisis has led to severe economic disruptions, knocking energy markets off balance, especially the electricity sector. Up to now, the energy sector has seen the steady growth of renewables- both globally and within the US- while the power of coal is steadily waning. Faced with COVID-induced economic turbulence, how will renewable energy fare now as growth is forced downwards for the first time in 20 years?

The coal industry has been dealt a hard hit by the COVID-19 pandemic. It has been identified as one of the sectors most vulnerable to the pandemic-induced economic turmoil. As the world went into lockdown and encouraged social distancing, less electricity was needed to manage utilities. The US Energy Information Administration (EIA) predicts that electricity consumption in the country this year will be almost 6% less than last year. Coal has been the most impacted, given its higher cost compared to gas, wind and solar power. Consequently, the pressure for companies to shift away from fossil fuels has ramped up. 

Pre-COVID-19, the fossil fuel industry had been under siege from growing climate activism and divestment advocacy. For example, divestment campaigns are gaining momentum in US universities. The University of California recently announced its full divestment from fossil fuels, as did American University. While slow-going compared to the UK, where half of its public universities have embarked on divestment strategies, other universities in the US may eventually follow suit amidst mounting pressure from student bodies. For example, Georgetown University is progressing slowly but steadily, pledging to divest from public securities and private investments relating to fossil fuel companies. 

Globally, divestment strategies are gaining momentum. Barclays, the sixth largest fossil fuel investor globally, is facing greater demands from its investors to halt its fossil fuel lendings. Late last year, the European Investment Bank (EIB) announced its intention to stop funding fossil fuel projects by the end of 2021. Moving away from the West, the EY Global Corporate Divestment Study found that business sentiment to divest is at record high rates among the Southeast Asian companies surveyed. Investors are beginning to turn away from fossil fuels in response to the gloomy prospects of the industry- for the most part. Things are different in the US; to its fossil fuel industry, COVID-19 presents an opportunity for revival, with Trump providing financial aid for struggling oil companies, despite protests by Democrats and environmentalists.

Steady Decline of Coal in US Electricity Sector

The coal industry in the US has been steadily declining. Ten years ago, coal was the powerhouse of US electricity generation, accounting for half of the country’s electricity. Over the years, its share has dwindled, down to 24% in 2019. In the same year, coal energy consumption was outpaced by that of renewables, a first in the US in over 130 years. A June 2020 report by the EIA forecasted that renewable electricity generation would grow by 4% this year, while coal generation would be reduced by a quarter. This disparity comes from the leading role of renewable energy in expanding generation capacity, particularly wind and solar, as well as its low operating cost. In the face of the pandemic, industry analysts predict that the transition from coal to renewables is accelerating, and coal’s share may well diminish to a mere 10% in five years.

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coal renewables
Fig. 1: Declining share of coal in US electricity generation over the years.

Despite this steady decline in coal use, some players are clinging onto a shred of faith that the industry will rebound. Political support for coal is still going strong in some parts of the US, with some pushing for new policies to prevent coal-fired power plants from closing down, however economically unviable they may be. West Virginia recently introduced a bill providing a tax break for coal plants, in exchange for keeping operations running until 2025. In Wyoming, an important state for US coal production, a new legislation obligates electric public utilities to attempt to sell coal plants before they can be closed down, effectively making it harder to retire them. Another legislation serves to pump more research into alternative uses of coal beyond electricity generation. Unfortunately for coal supporters, these efforts may not prevail against the headwinds of market forces; even before COVID-19, Trump – as avid a supporter of coal as he is- could not stop the decline of coal. Since taking office in 2017, coal plants have been shutting down rapidly, with more planned this year. There have been more than four thousand job cuts in the industry, and more than ten coal companies have filed for bankruptcy, including Murray Energy, the US’s largest private coal producer. Peabody Energy, the world’s largest private coal company, reported a loss this year, as it has every year since 2015. It is apparent that Trump’s pledge of support for coal has been unfruitful.

The Rise of Renewables and the Fall of Coals

Conversely, the future of renewables appears promising. Technology has been a boon for the dramatic decrease in costs of electricity generation and storage. According to Lazard, a financial advisory that analyses energy costs on an annual basis, the unsubsidised levelised cost of energy (LCOE) of coal ranges from US$66 to $152 per megawatt hour, while wind prices range from $28 to $54 and solar prices $36 to $44. LCOE describes the average cost of electricity generation by a plant over its lifetime, allowing for comparisons between energy competitiveness. Another formidable competitor in the electricity sector is natural gas, cheap and bountiful from the fracking boom. Lazard’s figures show its unsubsidized LCOE to range from $44 to $68. While natural gas has been topping the US electricity mix since 2016, these numbers show that renewables are catching up in terms of cost competitiveness, which is especially welcome considering the methane emissions associated with natural gas. 

While natural gas releases up to 60% less carbon dioxide than coal when burnt efficiently, methane- its primary component– is a much more potent greenhouse gas. While relatively short-lived, methane is still capable of packing a punch over the 20 years it lingers in the atmosphere, having a global warming impact 90 times greater than that of carbon dioxide. Given these numbers, the EIA’s 2020 Annual Energy Outlook comes as a relief, as it projects that renewables will eventually surpass natural gas in US electricity generation, doubling from a share of 19% in 2019 to 38% in 2050. Natural gas provided 37% of electricity in 2019, a figure that is expected to remain largely unchanged, coming to 36% in 2050.

However, as with coal, renewables are not immune to the repercussions of COVID-19. As the economy stagnates, renewable installation projects will be temporarily shelved or halted due to supply chain disruptions, lockdown measures and expenditure reduction by companies. The growth of renewables- globally and in the US- is thus expected to take a nosedive. The pandemic is especially ill-timed for the renewable industry, as 2020 was meant to be a record year for capacity expansions. According to the International Energy Authority (IEA), renewable capacity expansions this year is set to be 13% less than that of last year, breaking its 20-year growth. 

Fortunately, this decline is not permanent, cushioned by the long-term trend towards carbon-free energy, which even the pandemic cannot undo. As public and economic pressure force more coal plants to shut down, the resulting vacuum in energy capacity will likely be filled by renewables. Furthermore, more states are ramping up their efforts to go carbon-free. Currently, seven states, such as New York and Washington, have set their clean energy targets to attain 100% clean electricity by 2050. Such policies mandate the installation of renewable plants, hence it is only a matter of time before the shelved projects are set back in motion. 

Post-pandemic, the renewables sector is expected to be well-poised to bounce back on track and continue growing, albeit less rapidly. Governments can play an important role in this comeback by incorporating investments in renewables in stimulus packages designed to help economies recover from the pandemic, with the UN chief urging governments to use taxpayer money to support businesses that cut greenhouse gas emissions and support the creation of green jobs as part of their economic recovery plans. 

Featured image by: Kym Farnik

A new survey from the US Energy Information Administration has found a decrease in both current and future expectations of coal power generation. The decline is a result of a diminishing number of new coal power plants and divestment of coal from insurers who wish to avoid the environmental and social ramifications of backing the dirty energy source.

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In 2018, while addressing supporters at a rally in West Virginia, President Trump assured them that he would put an end to Obama’s so-called ‘war on coal’ and ensure jobs for approximately 33 000 American coal miners who had lost work since Obama took office in 2009. The reality seems to have inadvertently been the opposite, escaping President Trump’s goals. 

Ironically, Trump’s administration has done more for the abolition of the US coal industry than Obama’s Clean Energy Act. According to the US Department of Energy, ‘over the first three years of the Trump administration, coal retirements have continued at an even faster rate than during the Obama years’. 

Records reveal that the average annual coal capacity retirements during Obama’s terms were 4.2 Gigawatts from 2009-12 and 9.2 Gigawatts from 2013-2016, respectively. Yet, President Trump’s first term saw a retirement of 11.7 Gigawatts, higher than either of Obama’s terms, while pledging to do the opposite. This shows no signs of faltering either, with a record breaking 14 Gigawatts of coal capacity expected to be retired in 2019.

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Between 2008 and 2016, 17% of US coal capacity retired. Yet what the Trump administration perhaps fails to realise is how the industry downfall is being driven by market economics rather than any previous President’s policy. 

Coal burning worldwide reached its peak production in 2013, and 2019 saw the biggest decline in global coal burning- 3%- a ‘trend unlikely to change’ according to author Fred Pearce. Further, the number of new coal plants that began construction worldwide fell by 84% between 2015 and 2018. 

In the US, 24% of electricity is now produced by coal; this was at 45% 12 years ago. Trump may assure his supporters in public that ‘the coal industry is back’ but in reality, no coal-burning power plants have been commissioned since he entered the White House. 

Coal is becoming a toxic commodity. This is due to a number of reasons, partly because there has been a surge in the growth of alternatives that are both cheaper and cleaner. 

Burning coal emits a mixture of mercury, sulfur dioxide and minute particulates that are known to cause a range of respiratory problems and cancer. Limits in coal production set by the Environmental Protection Agency have helped prevent some of these emissions, but many plants don’t have the necessary pollution controls installed

Pressure from non-governmental health organisations also has a part to play, with the coal capacity retirement between 2008 and 2016 resulting in 80% less sulfur dioxide and 34% less carbon dioxide.  

Market forces are also a contributing factor, with the US-China tariffs stifling much of the US’s safety valve in the face of shrinking domestic demand for coal. In such an instance, the coal would be exported abroad, yet the expense and rising tensions have put off foreign buyers of US coal. 

Insurers have been gradually turning their backs on coal production, starting in Europe, then the US. Once the European Investment Bank committed to phasing out the financing of fossil fuel projects by 2021, the potential demise of coal spread quickly among insurers. Pressured by organisations like UnfriendCoal, insurers were most likely dissuaded by the thought of facing public backlash by covering the construction of a coal plant. Insurance is vital in the construction of a coal-fired power plant to allow investors and share-holders to gain confidence in its construction with lower risk. Additionally, Axis, a large US insurer, has pledged not to ‘provide new insurance or facultative reinsurance for the construction of new thermal coal plants or mines and their dedicated infrastructure or oil sands extraction and pipeline projects and their dedicated infrastructure’. 

This decline in confidence for coal makes it all the more unlikely that any insurers will provide insurance for the construction of new coal power plants, as it would mean a reputational and financial risk in a turbulent, uncertain economic and political climate. Murray Energy in the US declared bankruptcy last month, one of eight coal companies in 2019 to do so. 

It seems as though earlier calls for companies to back out of coal have succeeded. Mark Carney, the governor of the Bank of England, warned that unless firms woke up to the climate crisis, many of their assets would become worthless

The COVID-19 pandemic has seen dramatic declines in coal consumption in China, with the coal throughput of Qinhuangdao, the main coal port, falling to the lowest level in four years in the four weeks to March 1. However, this will most likely return to normal levels once the virus abates. 

It looks as though coal may be completely phased out in the US and Europe, a vital part of reducing our pollutants. One of the most effective ways this is possible is by reducing the energy produced by the oil and gas industry, the largest emitter of greenhouse gas emissions (42%), to make way for cleaner energy production in an effort to decarbonise the future. 

In January, government and regional leaders in Germany agreed on a plan to phase out coal -fired power stations by 2038, a big achievement in the fight to lower carbon emissions. It seems to be a done deal- or is it?

Germany’s Coal Phase-Out

The government initially pledged last year to shut down all coal-fired power stations but battled to secure support from the four states which have lignite (brown coal- the dirtiest coal) mines and coal-fired power plants: Saxony-Anhalt, North Rhine-Westphalia and Brandenburg. There are also plans to open a new hard coal-fired power plant this year, muddying the government’s efforts to transition to a low- and eventually zero-carbon future.

The timetable for plant closures calls for the first 300MW unit to be taken out of service at the end of 2020, with another 900MW due to be shut down at the end of 2021. However, some of the biggest, most heavily polluting coal power stations will only be shut down in 2028 and 2029. 

For hard coal plant operators, the law stipulates auctions for taking capacity off the grid until 2026. Afterwards, there will be forced closures depending on the plants’ age and CO2 output. Operators can apply for compensation payments in auctions where the lowest bidders will be awarded. Hard coal plants in southern Germany will be exempt from the first round of auctions as they are considered to be more critical to supply security. Compensation payments for hard coal plants will be capped at 165 000 euros per megawatt in 2020 and then decline gradually.

The coal exit law also involves a compensation plan of 40 billion euros, which will target the coal states. Much of this money will go into new infrastructure projects for coal-dependent areas and retraining workers for new jobs there. Mines and utilities will also get compensation for lost production and there are plans to move government institutions and military installations to the affected regions to create jobs and revenue. 

Separate from this fund, operators of heavily polluting coal-fired power plants in western Germany will receive 2.6 billion euros, while 1.75 billion euros will go to those with plants in the east. The move shows how expensive it is to stop burning the dirty fossil fuel and how politically motivated it is. 

Germany’s Energy Consumption

Coal currently powers about one-third of Germany’s electricity, and more than half of that relies on burning lignite, of which Germany is the world’s largest producer. The end date for burning lignite could be brought forward to 2035, depending on progress made. 

The government will conduct reviews in 2022, 2026, 2029 and 2032 to determine whether Germany can end coal-fired electricity generation in 2035. 

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germany to phase out coal by 2038
Germany’s coal exit timeline (Source: Clean Energy Wire).

Germany aims to generate at least 65% of its electricity from renewables by 2030.

Wind energy overtook lignite for the first time in 2019, producing 118 TWh, which is also a new record in total electricity production. However, with the number of new turbines falling to unprecedently low levels, Germany has received the worst rating of any wind power market, according to a survey conducted by Wind Energy Hamburg.

Criticisms of the Law

The plan has been met with some criticism. Environmental campaigners criticised the decision, saying that the agreement will see a new coal-fired power plant, Datteln 4- which a report says will alone cause an additional 40 million tonnes of CO2 emissions- go into service later this year and allow for the expansion of the Garzweiler open-cast mine in western Germany. 

Germany’s largest coal state, North Rhine- Westphalia, says that it cannot accept the coal exit law without major amendments, with the state’s regional economic minister, Andreas Pinkwart, asserting that the law treats hard coal power plants unfairly compared to lignite plants. The coal exit law differentiates between lignite and hard coal because a lignite phase-out will have a greater impact on mining regions and workers than the hard coal phase-out (Germany’s last hard coal mine closed in 2018). 

Hard coal plant operators also object to the law, saying that the proposed compensation is insufficient and will result in thousands of job losses.

According to a report by the German Institute for Economic Research (DIW), Germany must abandon coal by 2030 instead of the proposed 2038 to comply with the Paris Agreement. It also calls for a speed-up of Germany’s renewable energy roll-out, and tightening the country’s current target to lower emissions by 65% by 2030.

Concerns from Germans

According to a survey conducted by EuPD Research, 85% of Germans believe that the country’s coal exit will lead to significantly higher electricity prices, while 75% said that they expect the coal exit to lead to an increase in energy imports from outside Germany.

However, a recent study by energy think tank Agora Energiewende, found that the coal phase-out would have ‘very little’ impact on electricity prices. The study suggested that household customers would pay 0.4 euro cents more per kilowatt-hour in 2030, while energy-intensive industries could see decreased power costs. 

How Difficult will the Transition to Renewables Be?

Andreas Schierenbeck, CEO of power company, Uniper, has warned that Germany faces potential power shortages in the next few years as it removes nuclear and coal-fired power plants from the grid. While the company plans to move away from coal (with the exception of the Datteln 4 plant) by shutting down all of its lignite and hard coal plants by 2025 and focus on its natural gas business, Schierenbeck argues that Germany faces blackouts if it does not plan for enough back-up generation from fossil-fuel fired plants even as it shifts to renewable energy, and he proposes that the German government should set up a system to fund and maintain fossil-fuel reserve capacity, similar to the UK. 

However, according to the country’s grid agency, BNetzA, this isn’t a concern. It says that power blackouts are increasingly caused by extreme weather events rather by the transition to renewable energies. In fact, a government report last year found that the German electricity supply would remain ‘extremely secure’ by international standards, even as the country simultaneously phases out coal and nuclear power.  

The parliament hearing on the coal exit law was scheduled for March 25, however it was postponed due to the COVID-19 pandemic. It is unknown when the hearing has been rescheduled to, but the government aims to pass final legislation on the coal exit in the first half of this year (2020).

Energy industry federation BEE says that parts of the 40 billion euros earmarked for the coal phase-out should be channelled into a green stimulus package to help energy companies during the coronavirus outbreak. The organisation’s head, Simone Peter, calls for ‘at least’ 4.3 billion euros to be put into investment premiums as well as to remove other existing hurdles for wind, solar and bioenergy to stabilise renewable energy companies. 

Update July 6 2020: The Bundestag and Bundesrat- Germany’s lower and upper houses of parliament- passed legislation on July 3 to phase out coal use in the country by 2038.

This article is part of an editorial partnership with Impakter.

South Asia is home to 24% of the world’s population despite having 11% of the world’s landmass. With problems such as greenhouse gas emissions as a result of intense industrialisation- which puts 800 million lives at risk in the region– water shortages and a growing population (predicted to jump to over 2.3 billion by 2050), South Asia is facing a future crisis. How valuable will renewable energy become in the region? 

Case studies in India, Pakistan and Sri Lanka will be explored to identify future issues this region will face and what is being done presently to prevent an energy deficit. 

India is growing fast and is on track to overtake Germany as the 4th largest economy by 2026. With this economic boom, 500 million people will move into the middle- and high-income bracket by 2030 and therefore the demand for goods and services will rise. However, the industrial expansion that India is undergoing is putting strain on the country’s power generation facilities, with demand outstripping supply by 7.5%. Coal represents the majority of India’s energy mix (44%), followed by oil (25%). 

Earth.Org Inside South Asia's Energy Crisis
Graph showing India’s total primary energy supply sources (Source: Enerdata 2019, Brown to Green: The G20 Transition Towards A Net-Zero Emissions Economy 2019 report).

While coal occupies the lion’s share of India’s power generation, renewable energy accounts for only 10%. Due to India’s unique geography- encompassing mountains, deserts and rainforests- India is able to implement renewable power with its windy coastlines, arid sun-soaked deserts and turbulent shorelines. Because some states receive more sunlight or wind than others, there are variations between states. 

In Gujarat, India’s largest coal producing state, the state government announced that it will not give permission to build new coal power plants, in part owing to the falling costs of renewable sources of energy, such as solar. The existing coal plants are under-utilised and public sector banks have been left with debts after providing cheap financing to build tens of coal power plants, expecting demand for electricity to grow. These projections did not materialise, and cheaper solar and wind power met much of the growing electricity consumption in the country. 

Meanwhile, Sri Lanka’s incumbent president, Gotabaya Rajapaksa, recently announced the country’s plan to produce as much as 80% of Sri Lanka’s power requirements from renewable sources by 2030. Sri Lanka’s installed electricity capacity is 4043 MW and total demand in 2017 was 2523 MW. The country currently produces 23% of its power requirements from hydropower and other renewable sources. However, because of concerns for the ecological impacts of hydropower, including destruction of habitats and the depletion of sediments that lead to coastal erosion, the country is seeking to diversify its renewable power mix with plans to build a 104MW wind plant on Mannar island in Northern Sri Lanka. The country wants to reach self-sufficiency in electricity by 2027, limiting the amount of fossil fuels that it imports. 

Together with Iran, Sri Lanka is building a US$16 billion hydroelectric power plant near the Uma Oya river. The location of the project, called the ‘Uma Oya Multipurpose Project’, has prompted criticism; there have been landslides and minor slips in the area as a result of the project. 

However, the new government has also announced plans for new coal plants and upgrades to existing plants to cope with demand which is growing by 6% yearly, marring Sri Lanka’s efforts to phase out coal. The capability of the coal-powered plants are dubious, as the Norochcholai coal plant has broken down several times. The Uma Oya project, as well as the plans for the future coal plant, presents a problem for Sri Lanka amid its targets of becoming a country powered by mostly renewable energy. 

South Asian countries have ratified the Paris Agreement and the Kyoto Protocol. However, problems with regional cooperation persist, with the 19th SAARC summit being cancelled due to terror attacks in India. Regardless, competing interests often stall the summits anyway, rendering these regional meetings useless.

The future of South Asia’s energy can be summarised with Al Gore’s documentary, ‘An Inconvenient Sequel’ in which Gore speaks to Indian ministers about reducing their dependence on coal as the world looks to reduce its carbon emissions. While this is easily said, the reality is different. A problem persists as the Western world has had at least 150 years of limitless economic growth. Now that the importance of environmental sustainability is being stressed, these concerns have been placed on developing nations such as India. This presents many problems for the South Asian region as there is a lack of incentives for the private sector to invest in renewable energy, high initial costs of starting such projects such as construction costs, lack of government support and sustained economic development, meaning that the South Asia region will have to plan carefully if the region wants to avoid a future energy crisis.

While the region’s population is growing, as is the middle class, the region is struggling to lift 40 million people out of poverty. As a result, countries in South Asia face a difficult path of balancing both development and environmental concerns. If the region is to increase its share of renewables in the respective country’s energy mix, it must work to create long-term policies and robust legislation to prioritise renewable energy. 

Featured image: Kym Farnik

 

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