coal – energy for sustainable development · coal – energy for sustainable development 8 the...

Coal – Energy for Sustainable Development

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Coal – Energy for Sustainable Development 2

Contents

3 Keymessages

4 Part1:Theglobalenergychallenge

10 Part2:Coalandcleanenergy

18 Part3:Coalandsustainabledevelopment

32 Part4:Timeforaction

34 Annex

36 Glossary

37 Furtherreading

38 WorldCoalAssociation

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Coalisthemostwidelyavailablefossilfuelresource.Itformsthebackboneoftheworld’selectricitysupply,providingmorethan40%ofourelectricityneeds.Itisalsoakeycomponentintheproductionofsteelandconcrete;vitalmaterialsinbuildingsustainablesocieties.

Energyiscriticaltosustainabledevelopment-tobuildingstrongercommunitieswithhospitalsandschools.Itsupportsbusinessandindustrysothattheycandeliversustainableemploymentandeconomicgrowth.

Acrosstheworldthereare1.3billionpeoplewithoutaccesstoelectricity.Internationalactionisneededtochangethis.Itispredictedthatby2035,unlessactionistaken,aroundonebillionpeoplewillstillbelivingwithoutelectricity.

Theworldneedsanenergyaccesstargettoprovideenergytothosewhoneeditmost.

Coalwillbethebedrockonwhichenergyaccessisbuilt.InternationalEnergyAgencyprojectionsshowthatitwillprovidemorethanhalfofthe‘on-grid’electricityneededtodeliverenergyforall.

Cleancoaltechnologies,suchasadvancedcoal-firedpowergenerationandcarboncaptureandstorage,canenabletheworld’scoalresourcetobeusedinlinewithenvironmentalandclimateobjectives.

Coalminingprovidesmorethansevenmillionjobsworldwideandin2010theindustryinvestedmorethanUS$7billionincapitalexpenditureindevelopingcountries.

Key messages

Forfurtherexplanationoftechnicaltermsusedinthisreport,seetheglossaryonpage36.


In1992thefirstRioConferencetookplace.Butaftertwentyyearsofactiontoaddressthechallengesofsustainabledevelopment,billionsofpeopleacrosstheworldstillliveinpoverty.Forsomany,livinginpovertymeanslivingwithunfulfilledpotential.Itisbroughtaboutbyalackofopportunity,ofeconomicandeducationaladvantagesandalackofaccesstoenergy.Povertyleadstopoorhealthoutcomesandprematuredeathbecausepeopleareunabletoaccesscleanwater,nutrition,healthcare,education,clothingandshelter.

Accesstoenergyisessentialtoaddressingtheproblemsthatcausepoverty.Afterfoodandshelter,energyisoneofthefundamentalsofmodernsociety.Withoutenergy,peoplecannotaccesstheopportunitiesprovidedbythemodernworld.

Alifelivedwithoutenergy,isalifelivedinpoverty.

Theworldmusttakeaction.Beforewecanmeetthemyriaddevelopmentchallengesfacedbythosemostinneed,weneedtoprovideaccesstoenergy.Growing,dynamiceconomiesareessentialprerequisitestoaddressingtheenvironmentalchallengesthatconfrontusthiscentury.

Global energy poverty and its impactTodaythereare1.3billionpeopleacrosstheglobewithoutaccesstoelectricityand2.7billionpeoplewhodon’thavecleancookingfacilities.Theproblemisspreadacrossthedevelopingworld,butitisparticularlysevereinsub-SaharanAfricaanddevelopingAsia,whichtogetheraccountfor95%ofpeopleinenergypoverty.

At89%,theDemocraticRepublicofCongohasthehighestpercentageofpopulationlackingaccesstoelectricity.

Withouttargetedglobalaction,theInternationalEnergyAgency(IEA)estimatesthatin2035therewillstillbeonebillionpeoplewithoutaccesstoelectricityand2.7billionwithoutaccesstocleancookingfuels.

Withoutacommitmenttoachieveuniversalenergyaccessithasbeenestimatedthatby2030,therewillbeanadditional1.5millionprematuredeathsperyearcausedbyhouseholdpollutionfromburningwoodanddungandthroughalackofbasicsanitationandhealthcare.Modernenergysourcesareessentialtomeetingthesechallenges.

Thereareexamplesthatshowtheimpactthatdedicatedactioncanhave.Chinadoubleditsenergyoutputfrom1990to2005andelectrificationincreasedtojustover99%.ThelevelofelectrificationinSouthAfricarosefrom36%in1994to75%attheendof2009.

Whiletherearemanypointsofcomparisonandcontrastbetweentheseexamples,itcannotbeignoredthatbothhavebenefitedfromeaseofaccesstolargereservesofcoal(seefigure2).

Part 1Theglobalenergychallenge

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However,thechallengeremainsimmense.Thelatentdemandforelectricityishuge.Anestimated400millionpeopleinIndiastilllackaccesstoelectricity.By2030thisisonlyexpectedtofallto300million.

Beyondhouseholdsandindividuals,energyaccessisalsocriticaltothebroadereconomyandsociety.

Businessesandindustriesaremajorconsumersofelectricity.Globally,industrialuseofelectricityaccountedforaround42%ofconsumptionin2008.Economicgrowththroughtheexpansionofbusinessandindustrywillbetheonlywaythatpovertycanbeeradicatedindevelopingcountries.Businessandindustryneedsreliablebaseloadelectricityinordertoexpand.Inthedevelopingworld,economic

expansionwillprovidesecureemployment.Withoutthis,hundredsofmillionsofpeoplewillremaininpoverty,particularlyinurbanareas.

Otheressentialsocialservicesarealsoheavilyreliantonamodern,reliableelectricitysupply.Hospitalsandschoolscannotfunctioneffectivelywithoutaccesstoelectricityandinmanydevelopingcountriesthelackofelectricitycompoundstheproblemsofdiseaseandpooreducation.

Thisiswhyimprovingaccesstomodernenergyinthedevelopingworldissoimportant.Theworldneedstoadopttargetsforenergyaccessthatwillsupportresidential,industrialandsocialaccesstoelectricalservices.

Without targeted global action, the IEA estimates that in 2035 there will still be one billion people without access to electricity and 2.7 billion without access to clean cooking fuels.

Figure 2. Electrification and coal reserves

Country Electrification Coal reserves % coal from rate (2009) (million tonnes) electricity (2008)

China 99.4% 114,500 79%SouthAfrica 75% 30,156 93%

Figure 1. Global energy poverty

Source: International Energy Agency, World Energy Outlook 2011


Energy access targetsTheworldcurrentlylacksaninternationallyagreedglobaltargettoimproveaccesstoelectricity.Thetargetsthatdoexistlackambition.

TheIEA’sWorldEnergyOutlook2011providesadefinitionofwhatitsownenergyaccesstargetswoulddeliverintermsofelectricityfordomesticuse.Inruralareastheirtargetswouldsupport“useofafloorfan,amobilephone,andtwocompactfluorescentlightbulbsforaboutfivehoursaday.Inurbanareas,consumptionmightalsoincludeanefficientrefrigerator,asecondmobilephoneperhouseholdandanotherappliance,suchasasmalltelevisionoracomputer.”Critically,thedefinitionalsostates“someothercategoriesareexcluded,suchaselectricityaccesstobusiness.”Otherinternationalagenciesusesimilardefinitions.

Thetargetsalsofocusontheneedtoprovidecleancookingfuels.Thisisvitallyimportantbecausetheburningofwoodanddungreducesairqualityinthehome.Itisalsoamajorcauseofrespiratorydisease.Thedailyforageforfuelsofthistypecanleavepeoplephysicallyandemotionallydepletedandwithlittlesparetimetodevotetotheireconomicandsocialadvancement.Alongsideprovidingsmall-scale,off-gridrenewablepowersources,providingcleancookingfuelswillbeimportantintheshorttomediumterminaddressingthehealthchallengescausedbyenergypoverty.However,targetsbasedsolelyonprovidingfortheseminimalrequirementsignorethetruescaleofeffortneededtoeradicatepoverty–andtheenergyneededtomatchthatambition.

Arecentstudy1consideredthecurrentsituationinsub-SaharanAfrica.Itlookedattheexpansionofelectricitythatwouldbeneededonaneconomy-widebasistocomprehensivelyaddressenergyaccess.Toreachwhatthestudydescribedas“moderateaccess”toenergy,whereelectricitygenerationcapacityisaround200-400MWpermillionofpopulation,theregionwouldneedatotalofaround374GWofinstalledcapacity.That’sabout12timesthecapacitythatexistsinsub-SaharanAfricatoday.

Toachievethatlevelofcapacity,thestudyestimatedthatanannualgrowthrateinelectricityofaround13%wouldbeneededforthenext20years.Inthepast20yearstheaveragehasbeenonly1.7%.Thisdemonstratesthesignificantchallengefacedinprovidingagenuinelevelofenergyaccess.

Toconsiderthisissueincontext,SouthAfricacurrentlyhasaround800MWofinstalledcapacitypermillionpeople,andyetthiscountrystillfacesitsownsignificantchallengesinprovidingenergytoitspopulation.Indiacurrentlyhasaninstalledcapacityofaround130MWpermillionpeoplewhileintheUnitedStatesandEuropethefiguresarearound2826MWand1733MWrespectively.

ThescaleofthatchallengeisshowninFigure3.Currentdebatesaboutprovidinguniversalenergyaccessoftenassumethataccessbringspeopleindevelopingcountriestoalevelatleastbroadlycomparabletothatwhichexistsinthedevelopedworld.Butinreality,eventoprovidebasicenergyaccess,inlinewithamiddleincomecountry,wouldrequireadramatictransformationoftheelectricitysupplyinthesecountries.

Achieving energy accessDespitethemanychallenges,thereisnothingpreventingtheprovisionofenergytothosewhocurrentlylackit.Withambitiousactionthesechallengescanbeovercome.Thetechnologyalreadyexists.Nationalelectricitygridsareinplaceandcanbefurtherdevelopedtoensureelectricityisdispersedacrosscountries.However,significantinvestmentinelectricitygridsisrequiredinmanyoftheleastdevelopedcountries.Stronggridstructuresareessentialtoevenoutpeaksandtroughsinthegenerationofrenewableelectricityandtheycanveryeffectivelydistributecentralisedbaseloadelectricity.

Allenergysourceshavesomeroletoplayinfeedingthosegrids,includingnuclear,hydroandtheprovisionofrenewableenergy.However,baseloadpowergenerationthroughtheuseoffossilfuels,andespeciallywithcoal,istheonlywaytoprovideaffordable,safeandreliableelectricityatthescale

1Bazilian,etal,“Energyaccessscenariosto2030forthepowersectorinsub-SaharanAfrica”

The world currently lacks an agreed global target to improve access to electricity. The targets that do exist lack ambition.

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thatisneededtoachievegenuineaccesstomodernelectricityservices.Coalis,andwillcontinuetobe,thebackboneofglobalelectricitygeneration.Itwillbefundamentaltoexpandinggeneratingcapacityinmanydevelopingcountries.

Alongwiththeambitiontoachieverealenergyaccessinthedevelopingworld,threeelementsarenecessarytohelprealisethisvision:

1 Theright policy frameworksmustbeputinplace,bothonanationalandinternationalbasis,tosupporteffectiveenergyinstitutionsandbusinessmodelsthatsupportthedeploymentofacomprehensiveenergyinfrastructurewhereitisneededmost.

2 Theseframeworkswillencourage access tofinancefromallsources,publicandprivate,domesticandinternational.Thiswillprovidetherightlevelofinvestmenttobuildtheenergyinfrastructurethatissobadlyneeded.

3 Itmustberecognisedthat all sources of energy are necessarytomeetthevastpotentialdemandforelectricity.Itisimportanttounderstandthatdifferentsourcesofenergywillsuitdifferentcountriesanddifferentenvironments.Toensurethatenergyreachesthosewhoneeditmost,therecannotbeapoliticalpreferenceforonetechnologyoveranother.Thedecisionmustbebasedonwhatismosteffectiveinmeetingtheenergyneed.

Figure 3. Scenarios and projections for installed power capacity in sub-Saharan Africa (excluding the Republic of South Africa) 2010-2030

Source: Bazilian, et al, “Energy access scenarios to 2030 for the power sector in sub-Saharan Africa”


The role of coal in providing energy accessCoalresourcesexistinmanydevelopingcountries,includingthosewithsignificantenergychallenges.Coalwillthereforeplayamajorroleinsupportingthedevelopmentofbase-loadelectricitywhereitismostneeded.Coal-firedelectricitywillbefedintonationalgridsanditwillbringenergyaccesstomillionsandsupporteconomicgrowthinthedevelopingworld.

TheWorldEnergyOutlook2011highlightsthat“coalaloneaccountsformorethan50%ofthetotalon-gridadditions”requiredtoachievetheIEA’sEnergyforAllcase.Thisclearlydemonstratescoal’sfundamentalroleinsupportingmodernbaseloadelectricity.Manycountrieswithelectricitychallengesarealsoabletoaccesscoalresourcesinanaffordableandsecurewaytofuelthegrowthintheirelectricitysupply.Asnationsdevelop,theyseeksecure,reliableandaffordablesourcesofenergytostrengthenandbuildtheireconomies–coalisalogicalchoiceinmanyofthesecountriesbecauseitiswidelyavailable,safe,reliableandrelativelylowcost.ThishasbeendemonstratedinVietnam,inChina,inSouthAfrica,andmanyothercountries.Manydevelopingcountrieshavesignificant,untappedcoalreserves.

Thefactthatcoalisexpectedtoaccountformorethan50%oftotalon-gridadditionsdemonstratescoal’scontinuingroleasthebackboneofourglobalelectricitysupply.Coalmetaroundhalfoftheincrementalgrowthinglobalprimaryenergydemandinthedecade2000-2010.Thesefiguresdemonstratecoal’scentralroleinsupportingincreasingelectricitydemandinthefuture,particularlyinaworldwheremorethanabillionpeopleliveinenergypoverty.Iftheworldistobeambitiousbeyondcurrentenergyaccesstargets,thencoalwillbeneededtomeetasignificantproportionofthatlatentdemand.

Thereisahugeopportunitytoensurethatmodernandcleancoaltechnologiescanbepart

ofaddressingthechallengeofenergypoverty.Nationalandinternationalpolicyframeworksandfinancingmechanismsmustsupportthedeploymentofthemostefficientandcleanestcoaltechnology.Iftheseframeworksarenotinplace,thenlessefficienttechnologieswithgreaterenvironmentalconsequencesarelikelytoprovemoreattractiveonacostbasisthanmoreexpensivebutalsomoreefficientandcleanertechnologies.

Energy and climate changeInthefaceofglobalactiontoaddressclimatechange,ithasbeenarguedthattheexpansionofenergyaccesscouldthreateninternationalclimateambitionswhichaimtocapatmosphericCO2at450partspermillionandkeepglobalwarminglessthantwodegreesabovepre-industriallevels.Developingcountrieshavebeenconcernedthatrequiringthemtoreduceemissionswillthreatenachievementoftheirlegitimatedevelopmentpriorities.

However,aneffectiveandsustainableclimateresponsemustintegrateenvironmentalaimswithenergysecurityandeconomicdevelopment.Theworld’sleastdevelopedcountriesneedaccesstolowcostenergy,buttheyarealsothemostvulnerabletotheimpactsofpoliciesaimedatreducinggreenhousegasemissions.

Asdemandforenergyincreases,affordableandsustainablesourcesofenergyareessentialtoaddressingthechallengeofreducinggreenhousegasemissionswhilstachievingaccesstoenergy.Withoutfirstaddressingthechallengeofpoverty,developingeconomieswillnothavethecapacitytofocustheirattentiononreducingtheirgreenhousegasemissions.

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Whileaddressingclimateandenergychallengestogetherseemscontradictorytosome,therealityisthattheymustbeconsideredasintegratedpriorities.

Importantly,energyneedscanbemetwithoutimpactingclimateambitions.TheWorldEnergyOutlook2011highlightsthatachievingtheEnergyforAllcasewouldonlyincreaseCO2emissionsby0.8%whileavoidingtheprematuredeathsof1.5millionpeople.Ashasbeennotedabove,achievingtheEnergyforAllcaseincludessignificantcoal-firedadditionstonationalelectricitygrids.Sothechoiceofenergysourcesforbringingelectricitytothosewhoneeditwillmakealmostnoimpactonclimateaction.Thismeansthatinrealitythereisnoclimate-basedreasontolimitthefuelsfromwhichenergycanbesourced.Renewablesourceshavealargeroletoplaybutthereisnoclimate-basedreasontoweighenergyaccesseffortsstronglytowardsrenewableenergysources.

Thefocusneedstobeonensuringthatenergyisdeliveredtothosewhoneedit.Ratherthanfocussingonparticularlow-carbonsourcesofenergy,theyshouldallbemadeavailable,leavingnationalgovernmentstochoosewhatismostsuitablefortheircircumstances.


Coalisthebackboneofmodernelectricity.Coalcurrentlysuppliesaround30%ofprimaryenergyand41%ofglobalelectricitygeneration.Coaluseisforecasttoriseover50%to2030,withdevelopingcountriesresponsiblefor97%ofthisincrease,primarilytomeetimprovedelectrificationrates.

Between2000and2010itisestimatedthatcoalmetaroundhalfofglobalincrementalenergydemand(seefigure4).Despitetherapiddeploymentofrenewableenergytechnologies,particularlyinthecontextofdebatesaboutclimatechange,ithasbeencoalthathasaccountedforthelargestincreaseinenergydemandamongtherangeofenergysources.Thegrowthincoalusage,inbothvolumeandpercentageterms,wasgreaterthananyotherfuel.

Coalhasmetthissignificantgrowthinenergydemandbecauseofitsstatusasareliable,widelydistributedandaffordablefuel.Coalisalsotheleastsubsidisedofallfuelsources.AccordingtotheIEA,“…consumptionsubsidiestocoalworldwidearesmallanddiminishing,comparedwiththosetooilproducts,naturalgasandelectricity,accountingforonly0.7%ofthesesubsidies”.

Coalwillalsoplayamajorroleasacomplementtorenewableenergysources.Itwillbeoneofthekeysourcesofenergytoaddressgapsinwindandsolarpoweredelectricity,bothofwhichincluderisksofintermittentsupply.

TheWorldBankrecognisesthesignificantrolethatcoalenergyplaysinsecuringenergysupplies,especiallyindevelopingeconomies.Thiswasdemonstratedbythedecisionin2010toprovidefundingforthedevelopmentoftheMedupipowerstationinSouthAfricawherethePresidentoftheWorldBankstatedthat,“Coalisstilltheleast-cost,mostviable,andtechnicallyfeasibleoptionformeetingthebaseloadpowerneedsrequiredbyAfrica’slargesteconomy”.

ThisisalsorecognisedbytheIEA.InitsWorldEnergyOutlook2011,ithighlightedthatcoalwillplayanimportantroleinunderpinningtheincreaseinpowergenerationthatisneededtoprovideelectricitytothe1.3billionpeoplethatcurrentlydonothaveit,stating,“morethanhalfofthe…increaseinon-gridelectricitygenerationcapacityisexpectedtobecoal-fired.”

Part 2Coalandcleanenergy

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The coal resourceCoalisthemostwidelyavailablefossilfuelenergyresource.Unlikegasandoilitiswidelydistributed,bothgeographicallyandintermsofresourceownership.Itsabundanceprovidesenergysecuritytomanycountriesbecauseitssupplywilllastsignificantlylongerthangasoroil.Itispredictedthatcoalwillcontinuetoplayaverysignificantroleinworldprimaryenergydemandwellintothefuture.

Ithasbeenestimatedthatthereareover860billiontonnesofprovencoalreservesworldwide.Thismeansthatthereisenoughcoaltolastusatleast118yearsatcurrentratesofconsumption.Incontrast,provenoilandgasreservesareequivalenttoaround46and57yearsatcurrentconsumptionlevels.However,reserveestimatesvary.Worldwide,potentialcoalresourcesdwarfprovenreservesandmanyanalystsbelievethatcoalcouldlastconsiderablylonger.Somedeposits

areestimatedtohaveasmuchas400yearsofproductionremainingandnewtechnologiesforutilisingcoalresources,suchasundergroundcoalgasification,arelikelytoboostcoal’sfutureroleinenergysupplyevenfurther.

Coalreservesareavailableinalmosteverycountryworldwide,withrecoverablereservesinaround70countries.ThelargestreservesareintheUSA,Russia,ChinaandIndia.

Importantly,manycountrieswithsignificantenergypovertychallengesalsohavesignificantcoalreserves.Theabilitytoutilisedomesticcoalreservestoaddressproblemsofenergyaccessreducesrelianceonimportedenergy,particularlyoilandgaswhichareoftensourcedfromunreliableandunstablemarkets.Utilisationofcoaltocomplementrenewableenergysources,particularlywind,reducestheriskofanintermittentsupply.

Figure 4. Incremental world primary energy demand by fuel, 2000-2010

Source: IEA, WEO 2011


ManyAfricancountrieshavecoalreserves;however,SouthAfricahasbyfarthemostabundantreservesandhasalreadydevelopedasignificantcoalindustry.Furthermore,anumberofsouthernAfricanstatesbelievetheyhavesignificantcoalreservesthathavenotyetbeenproperlyassessed.ThiscouldsignificantlyincreasethepotentialroleforcoalintheAfricanregion.

Figure 5. Proved recoverable reserves of coal in sub-Saharan Africa at end-2008 (million tonnes)

Country Total reservesBotswana 40CentralAfricanRepublic 3Congo(DemocraticRepublic) 88Malawi 2Mozambique 212Niger 70Nigeria 190SouthAfrica 30,156Swaziland 144Tanzania 200Zambia 10Zimbabwe 502

Source: World Energy Council, Survey of Energy Resources 2010

Whilethereservesinothersub-SaharancountriesaredwarfedbythoseofSouthAfrica,manyhavesizeabledepositsthatcouldsupplysecureandreliableenergytohelpgrowtheirdomesticeconomies.

SouthAfricaobtainsover90%ofitselectricityfromcoalandhasdevelopedextensivecoalconversionprojects,especiallycoal-to-liquids(CTL).Currentlyaround30%ofSouthAfrica’sgasolineanddieselneedsareproducedfromindigenouscoal.

SouthAfrica’sconsiderablecoalreservesalsomakeitakeymemberoftheSouthernAfricanPowerPool,whichestablishesacommonpowergridandacommonpowermarketacrosscountriesintheSouthernAfricanDevelopmentCommunity.

TheseresourcesallowSouthAfricatoexportelectricitytoanumberofcountriesinthearea–includingBotswanaandNamibia–bothcountrieswhereoverhalfthepopulationhasnoelectricity.ThismeansSouthAfricancoalcouldplayasignificantroleinexpandingenergyaccessintheregion.

InAsia,coalreservesaremorewidelydispersed.China,IndiaandKazakhstanallhavereservesgreaterthanSouthAfricaandafurtherfivecountrieshavewelloverabilliontonnesofavailablereserves.

Figure 6. Proved recoverable reserves of coal in Asia at end-2008 (million tonnes)

Country Total reservesAfghanistan 66Armenia 163Bangladesh 293China 114,500Georgia 201India 60,600Indonesia 5529Japan 350Kazakhstan 33,600Korea(Democratic 600People’sRepublic)Korea(Republic) 126Kyrgyzstan 812Laos 503Malaysia 4Mongolia 2520Myanmar(Burma) 2Nepal 1Pakistan 2070Philippines 316Taiwan,China/ChineseTaipei 1Tajikistan 375Thailand 1239Turkey 2343Uzbekistan 1900Vietnam 150

Source: World Energy Council, Survey of Energy Resources 2010

South African coal could play a significant role in expanding energy access in the region.

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Theimportanceofcoaltoelectricityworldwideissettocontinue.IntheIEA’scentralNewPoliciesScenario,coalisstillexpectedtoprovidearound33%ofglobalelectricitygenerationin2030.However,thatscenariorequiresimplementationofallpoliciescurrentlyplannedbygovernmentsandthereforecomeswithconsiderableuncertainty.ItalsodoesnotincludetheverysignificantincreasesinelectricityneededtoreachtargetsbeyondtheIEA’sEnergyforAllscenariotoprovideevengreaterelectricityinthedevelopingworld–whichwilllikelyseeanevengreaterroleforcoalinsecuringthoseenergysupplies.Itisthoughtthatthisscenariowouldbringcoal’sshareinfutureelectricitygenerationmoreinlinewiththeIEA’sCurrentPoliciesScenarioforecastfor2035ofaround43%.

Tomeetthehugeglobaldemandforenergy,allenergysourceswillbeneeded.Differentsourcesofenergywillsuitdifferentcountriesanddifferentenvironments.Dependingontheavailabilityofnaturalresources,adecisionmaybetakenbetweencoalandgasasthemostviablemeansofpoweringbaseloadelectricity.Inmanycasesbothwillhavearoletoplay.Nucleartechnologymaybeavailableinsomecountriesandnotothers.Renewableenergywillhaveaparticularroletoplayinprovidingoff-gridelectricityandinmeetingpeakdemand.Incountrieswherethereisasignificantcoalresource,itislikelytobethepreferredfuelforsupplyingbaseloadelectricity.Inmanycasesthiswillbeamatterofaffordabilityandsecurity.

Energy efficiencyEfficiencyincoal-firedpowergenerationwillplayanimportantroleinthefutureproductionofelectricity.ThisisparticularlythecasewiththepotentialforhighefficiencypowergenerationtoreduceCO2emissions.

Manyofthecountrieswithsignificantcoalreservesalsohavesubstantialcoalproduction.However,thereareanumberofcountrieswhosecoalreservesareyettobeutilisedatalargescale.ThisprovidesbotheconomicopportunityforcountriessuchasIndonesia,MongoliaandPakistan,amongstmanyothers,tofurtherdeveloptheircoalextractionindustryandagreatpotentialforasecureandaffordabledomesticenergysupplyusingtheirindigenouscoalresource.

Coalminingplaysasignificantroleinmanynationaleconomies.Developingeconomiesrankhighlyamongtheworld’smajorcoalproducingnations.InthecasesofChina,India,SouthAfricaandKazakhstanmuchofthisisutilisedfordomesticelectricitygeneration.However,thesecountriesalsohavelargecoalexportmarketswhichcreatevaluableforeigninvestment.ColombiaandIndonesiabothearnconsiderableexportrevenuesfromcoalproductionindustriesthatareheavilyexport-focused.

Figure 7. Top Ten Hard Coal Producers (2010e)PRChina 3162Mt Russia 248MtUSA 932Mt Indonesia 173MtIndia 538Mt Kazakhstan 105MtAustralia 353Mt Poland 77MtSouthAfrica 255Mt Colombia 74Mt

Source: IEA 2011

Coalplaysavitalroleinelectricitygenerationworldwide.Coal-firedpowerplantscurrentlyfuel41%ofglobalelectricity.Insomecountries,coalfuelsanevenhigherpercentageofelectricity.

Figure 8. Coal in electricity generationSouthAfrica 93% Israel 63%Poland 92% CzechRep 60%PRChina 79% Morocco 55%Australia 77% Greece 52%Kazakhstan 70% USA 49%India 69% Germany 46%

Source: IEA 2010


Improvingefficiencylevelsincreasestheamountofenergythatcanbeextractedfromasingleunitofcoal.Increasesintheefficiencyofelectricitygenerationareessentialintacklingclimatechange.Asinglepercentagepointimprovementintheefficiencyofaconventionalpulverisedcoalcombustionplantresultsina2-3%reductioninCO2emissions.Highlyefficientmodernsupercriticalandultra-supercriticalcoalplantsemitalmost40%lessCO2thansubcriticalplants.

Efficiencyimprovementsincludethemostcost-effectiveandshortestleadtimeactionsforreducingemissionsfromcoal-firedelectricity.Thisisparticularlythecaseindevelopingcountriesandeconomiesintransitionwhereexistingplantefficienciesaregenerallylowerandcoaluseinelectricitygenerationisincreasing.

Theaverageglobalefficiencyofcoal-firedplantsiscurrently28%comparedto45%forthemostefficientplants(seefigure9).Aprogrammeofrepoweringexistingcoal-firedplantstoimprovetheirefficiency,coupledwiththenewerandmoreefficientplantsbeingbuilt,willgeneratesignificantCO2reductionsofaround1.8gigatonnesannually.Althoughthedeploymentofnew,highlyefficientplantsissubjecttolocalconstraints,suchasambientenvironmentalconditionsandcoalquality,deployingthemostefficientplantpossibleiscriticaltoenabletheseplantstoberetrofittedwithCCS(carboncaptureandstorage)inthefuture.

Improvingtheefficiencyoftheoldestandmostinefficientcoal-firedplantswouldreduceCO2emissionsfromcoalusebyalmost25%,representinga6%reductioninglobalCO2emissions.Bywayofcomparison,undertheKyotoProtocol,partieshavecommittedtoreducetheiremissionsby“atleast5%”.Theseemissionreductionscanbeachievedbythereplacementofplantsthatare<300MWcapacityandolderthan25years,withlargerandmarkedlymoreefficientplantsand,wheretechnicallyandeconomicallyappropriate,thereplacementorrepoweringoflargerinefficientplantswithhigh-efficiencyplantsof>40%.

TheroleofincreasedefficiencyasameanstoCO2mitigationisoftenoverlookedindiscussionsaboutclimateandenergy.AsisnotedinWorldEnergyOutlook2011(WEO),“Iftheaverageefficiencyofallcoal-firedpowerplantsweretobefivepercentagepointshigherthanintheNewPoliciesScenarioin2035,suchanacceleratedmoveawayfromtheleastefficientcombustiontechnologieswouldlowerCO2emissionsfromthepowersectorby8%andreducelocalairpollution”.Itisalsoimportanttonotethatthecostofavoidedemissionsfrommoreefficientcoal-basedgenerationcanbeverylow,requiringrelativelysmalladditionalinvestments.Thisisespeciallythecasewhencomparedtothecostofavoidedemissionsthroughdeploymentofrenewablesandnuclear.

Carbon capture and storageCarboncaptureandstoragetechnologywillbeakeytechnologytoreduceCO2emissions,notonlyfromcoal,butalsonaturalgasandindustrialsources.FiguresintheIEA’sWEO2011reportestimatethepotentialforCCStocontribute22%ofglobalCO2mitigationthroughto2035.Further

Figure 9. Reducing emissions through efficiency improvements

Source: IEA “Focus on Clean Coal” (2006)

Note: 1% increase in efficiency = 2-3% decrease in emissions

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analysisbytheIEAintheirEnergyTechnologyPerspectives2010reportalsoshowsthatclimatechangeactionwillcostanadditionalUS$4.7trillionwithoutCCS.

Likeallnewlowemissionenergytechnologies,CCSwillcostsignificantlymorethanconventionaltechnologyandrequiresextendeddevelopmenttime.Whileavailableonacomponent-by-componentbasis,CCShasnotyetbeencommerciallyprovenonanintegratedbasisoratthescalerequiredtomeetglobalgreenhousegasconcentrationtargets.Oncedemonstrated,CCSwillenablecountriestorelyonsecureandaffordableenergysourcessuchascoalwithoutcompromisingtheirenvironmentalambitions.

Furtherinvestmentisneededtofast-trackCCSdemonstrationandallowforthenecessarycostreductionsthatwillsupportthefuturelargescaledeploymentofCCS.AlongwiththesignificantinvestmentsalreadybeingmadebygovernmentsindevelopedeconomiesandChina,animportantaspectofCCSdeploymentindevelopingcountries

willbetherecentinclusionofCCSintheCleanDevelopmentMechanism;animportantstepforitsinclusioninotherfutureclimatefinancinginstruments,suchastheGreenClimateFund.

Utilising captured CO2 to secure energy suppliesAnothertechnologyofgrowingimportanceinsecuringnationalenergysuppliesiscarboncapture,utilisationandstorage(CCUS).Itprovidesapathwaytotwoimportantenergygoalsofmanycountries–producingreliableandaffordableelectricityfromcoalpowerplantswhilereducinggreenhousegasemissionsandproducingmoreoiltomeetgrowingdemandandenhancenationalsecurity.UtilisingtheCO2fromtheconsumptionoffossilfuelsisacrucialstepineconomicallyreducinggreenhousegasemissions.

Abouttwo-thirdsofareservoir’soriginal-oil-in-placeremainsuntappedafterprimaryandsecondaryoperationsbecauseitistoodifficultorexpensivetoextract.Withevolvingtechnology,however,significantlymoreofthereservoir’sremainingoilcanbeproduced.InjectingCO2

Figure 10. Key technologies for reducing CO2 emissions

Source: IEA Energy Technology Perspectives 2010


undergroundtoproducesuch‘stranded’oilisknownasenhancedoilrecovery(EOR).Over110projectsusingthisestablishedtechnologyarecurrentlyproducingabout280,000barrelsofoilperdayintheUnitedStatesaloneandthetechnologyisalsobeingdevelopedinmanyotheroil-producingnations.

EORwouldsupportthedeploymentofCCSandcreatearevenuestreamforCCSprojectsastheCO2capturedbecomesaneconomicresource.Deploymentofthistechnologyatagloballevelrequiresfurtherinvestigation.However,earlystudiesdemonstratethatthereissignificantcapacityforstorageofCO2inunder-utilisedoilfields.

TheprocessofEORwillstimulateeconomicgrowthandcreatejobsnotonlyinlocalareas,butregionallyandnationallyaswell.Thecaptureofformer“waste”CO2willcreateavaluableresourcethatcanbeusedforEORwheresuppliesofCO2arenowinadequate.Further,asUniversityofTexasresearchershavepointedout,utilisationofgreateramountsofCO2forEORwillprovideacommodityvaluethatcanbeusedtoreducethecostofcaptureandthefinancialburdenonpowerconsumerssuchasfamiliesandbusinesses.

Withhigheroilpricespredictedforthefuture,securingandenhancingoilsuppliesshouldbeamajorinternationalpriority.TheIEAhasindicatedthattheworldneedstoinvestoverUS$10trillioninoilinfrastructureoverthenexttwodecades,EORshouldbeoneofthetechnologiesutilisedtoimproveglobaloilsupplies.

Clean fuels from coalInadditiontoimprovementsintheefficiencyofcoal-firedpowerstationsandthedeploymentofCCSforelectricitygeneration,theworld’ssignificantcoalresourcescanalsobedeployedtosupportotherenergyneeds.

Coal to liquidsConvertingcoaltoaliquidfuel–aprocessreferredtoascoalliquefaction–allowscoaltobeutilisedasanalternativetooil.

CTLisparticularlysuitedtocountriesthatrelyheavilyonoilimportsandhavelargedomesticreservesofcoal.

SouthAfricahasbeenproducingcoal-derivedfuelssince1955andhastheonlycommercialcoaltoliquidsindustryinoperationtoday.NotonlyareCTLfuelsusedincarsandothervehicles,butSouthAfricanenergycompanySasol’sCTLfuelsalsohaveapprovaltobeusedincommercialjets.Currentlyaround30%ofthecountry’sgasolineanddieselneedsareproducedfromindigenouscoal.ThetotalcapacityoftheSouthAfricanCTLoperationsstandsinexcessof160,000bbl/d.

Fuelsproducedfromcoalcanalsobeusedoutsidethetransportationsector.Inmanydevelopingcountries,healthimpactsandlocalairqualityconcernshavedrivencallsfortheuseofcleancookingfuels.Replacingtraditionalbiomassorsolidfuelswithliquefiedpetroleumgas(LPG)hasbeenthefocusofinternationalaidprogrammes.LPG,however,isanoilderivative–andisthusaffectedbytheexpenseandpricevolatilityofcrudeoil.Coal-deriveddimethylether(DME)isreceivingparticularattentiontodayasitisaproductthatholdsoutgreatpromiseasadomesticfuel.DMEisnon-carcinogenicandnon-toxictohandleandgenerateslesscarbonmonoxideandhydrocarbonairpollutionthanLPG.

Underground coal gasificationUndergroundcoalgasification(UCG)isamethodofconvertingunworkedcoal-coalstillintheground-intoacombustiblegaswhichcanbeusedforindustrialheating,powergenerationorthemanufactureofhydrogen,syntheticnaturalgasordieselfuel.

Coal-derived dimethyl ether (DME) is receiving particular attention today as it is a product that holds out great promise as a domestic fuel.

17

InthelastfewyearstherehasbeensignificantrenewedinterestinUCGasthetechnologyhasmovedforwardconsiderably.Chinahasabout30projectsusingundergroundcoalgasificationindifferentphasesofpreparation.Indiaplanstouseundergroundgasificationtoaccessanestimated350billiontonnesofcoal.

SouthAfricancompaniesSasolandEskombothhaveUCGpilotfacilitiesthathavebeenoperatingforsometime,givingvaluableinformationanddata.InAustralia,LincEnergyhastheChinchillasite,whichfirststartedoperatingin2000.Demonstrationprojectsandstudiesarealsocurrentlyunderwayinanumberofcountries,includingtheUSA,WesternandEasternEurope,Japan,Indonesia,Vietnam,India,AustraliaandChina,withworkbeingcarriedoutbybothindustryandresearchestablishments.

Figure 11. How underground coal gasification works

Source: UCG Association


Inadditiontoitsdirectroleasanenergyresource,coalplaysasignificantglobalroleinsustainabledevelopment.

Coalminingisacriticalcontributortomanyeconomies.Fromprovidingemployment,exportandroyaltyrevenuesthroughtolocalservicesandthedevelopmentofinfrastructure,coalminingmakesasubstantialcontributiontoimprovingthelivelihoodsofmany.Thisisespeciallytrueindevelopingcountrieswherecoalminingmakesamajorcontributiontonationaleconomiesallowingthemtogrowstrongerandaddressthechallengesofpovertyanddevelopment.

Coalisalsoakeycomponentofimportantindustrialprocessessuchassteelandcementmanufacturing–bothofwhicharecentraltobuildingtheessentialinfrastructureofgrowingeconomies.

Economic benefits of miningCoaldirectlyprovidesmorethansevenmillionjobsworldwideandsupportsmanymoremillions.Coalproductionisthekeyeconomicactivityinmanycommunities.In2010thecoalindustryinvestedmorethanUS$7billionincapitalexpendituresindevelopingcountries.

Thepresenceofcoalminingsupportseconomiesinmanyways.Atthemostbasiclevelcoalminingprovidesemploymentforlocalcommunities.Theseemployersofteninvestinimprovingtheskillsoftheirworkforce–skillsthatcanbetransferredtootheremployersandotherindustries.Employmentprovidedbycoalminingdoesnotonlybenefitthemenandwomenemployedatthemineandtheirfamilies.Thesejobssupportthewidercommunitywhentheemployees’incomeisspentongoodsandservices.

Coalminingoftenoccursinruralandremoteareasrequiringsignificantinfrastructuredevelopment-particularlythedevelopmentoftransportationlinkssuchasroadandrail.Miningoftenbringsincreasesinotherinfrastructureservicessuchaselectricity.Improvedinfrastructureduetominingactivitycanalsosupportbroadereconomicdevelopmentwithintheregion.

Miningoperationsalsobringrevenuestogovernments.Companiespaytaxesatboththelocalandnationallevelsandcancontributeroyaltieswhichhelpgovernmentsfundotherservices,suchashealth,education,welfareandsecurity.Incaseswherecoalissurplustodomesticenergyneeds,coalproducedisexportedtoothercountries,earningvaluableexportincomeandsupportingnationalforeignexchangereserves.Thesebenefitscanbecriticaltooftenfragiledevelopingeconomies.

Manycompaniesalsolooktoinvestinthecommunitieswithinwhichtheyoperate-wellbeyondtheneedsoftheirminingoperations.Therearemanyexamplesofcoalminingcompaniesmakingsizeableinvestmentsinhealthandeducationservicesintheirlocalcommunities.Someoftheseareconsideredonpages20–27.

South AfricaCoalisakeycontributortoSouthAfrica’seconomy.Whiletherestofsub-SaharanAfricalaboursunderanelectrificationrateofonlyabout10%,

Part 3Coalandsustainabledevelopment

19

SouthAfricahasmanagedtomorethandoubleitselectrificationrateinjustoveradecadeto75%onthebackofapowersectorfuelledmorethan90%bycoal.TheeconomicandsocialcontrastsbetweenSouthAfricaandmanyofitsneighboursareobvious.WhilecoaladdressesthedomesticelectrificationchallengesinSouthAfrica,morethanaquarterofcoalminedinthecountryisexported,mostlythroughtheRichardsBayCoalTerminal.Afterplatinumandgold,coalisSouthAfrica’sthirdlargestsourceofforeignexchange.

EmploymentintheSouthAfricancoalminingindustrytotalsmorethan12%oftheminingworkforceinSouthAfrica–thatismorethan65,000workers.IthasbeenestimatedthatthecoalindustryinSouthAfricapaysmorethanUS$1billioninwagestoitsworkforceeachyear.Workersinthecoalminingindustryarerequiredtobeskilledtoahigherlevelthantheotherminingsectorsmainlyduetotheneedforspecifictraininginthetechnical,mechanical,healthandsafety-andrelatedfieldsofoperationandengineering.Muchofthistrainingisprovidedthroughemploymentwithintheindustry.

Theimpactthattheseemploymentbenefitshaveisspreadwidelyacrossthecommunitiesatlarge.Thetypicalruralorlow-skilledAfricanfamilystructureisoftencomplexandmulti-faceted.Theimpactofoneemployees’salaryintheminingindustryhasbeenestimatedtofeedandclothetheequivalentoftenpeople,includingchildrenandtheelderly.

ColombiaIthasbeenestimatedthatin2009ColombiaearnedmorethanUS$5billioninexportrevenuefromcoal–roughlytwo-thirdsoftotalminingexportrevenues.ExportsofcoalhaveplayedanincreasinglysignificantroleinColombia’seconomy,asdemonstratedinfigure12.

MiningplaysakeyroleintheColombianeconomy,whichhasledtobillionsofdollarsinforeigninvestmentinrecentyears.

Thecoalminingsectorplaysanimportantroleincontributingtogovernmentrevenuesbothatnationalandregionallevels.RoyaltiesreceivedbyregionalgovernmentsinColombiaforcoalminingin2008wereaboutUS$597million,providingkeyrevenuetosupportessentialsocialservices

suchasschoolsandhospitalsandassistingthedevelopmentofkeyeconomicinfrastructure.

Responsible miningCoalisfoundin70countriesandactivelyminedinaround50countriesbycompaniesofvaryingsizes.Manycompaniesareverysmalloperations,insomecasesevenfamily-owned.Othercompaniesoperateinmanycountriesandsomealsooperateinothercommoditysectors.

Allcompanieshaveanobligationtoactresponsiblywhenminingfornaturalresources.Companiesmustconsidertheirimpactontheenvironment,thehealthandsafetyoftheirworkforcesandthecommunitieswithinwhichtheyoperate.Differentlocationshaveotherissuesthatneedtobeaddressedindifferentways.

Manycompaniesalsolearnfromtheexperienceofothersandtherearemanypositivestoriestotellaboutthecontributionthatcoalminingmakesacrosstheglobe.

WorldCoalAssociationmembersplaceahighpriorityonresponsibleminingandcommit,aspartoftheirmembership,toencourageimprovementsinminehealthandsafetyandpracticecorporatesocialresponsibility.

Figure 12. Colombian mining export revenues

Source: National Association of Employers of Columbia – Mining Chamber


Colombian mining complex Cerrejón has developed a comprehensive land rehabilitation programme that is now being held up by environmental authorities in Latin America as a model of best practice.

Theresultofover20years’observation,innovationandresearch,Cerrejón’saward-winningprogrammehashelpeditrehabilitateover2800hectaresoflandtodate.

Apriorityforallcoalminingcompaniesshouldbetoprotectthelocalenvironmentandcommunityaroundtheirmines.Thesoiliskey,aswithinitisheldthelocalbiodiversityofthelandalongsidenaturalresourcessuchaswaterandair.Throughcarefulplanningandlandmanagement,beforeandafterminingtakesplace,theindustrycanhelpensureasustainableandresponsiblefutureformining.

Restoring the natural balanceOverthelasttwodecades,ColombianminingandtransportationcomplexCerrejón-jointlyownedbyBHPBilliton,AngloAmericanandXstrata-hasdevelopedauniqueandaward-winninglandrehabilitationprogramme.Partofamuchwiderfocusonsustainabilityandenvironmentalmanagement,theprogrammehasalreadyrestoredmorethan2800hectaresofland-withoverhalfofthatcoveredbyforestscontainingmorethan140nativeplant,shrubandtreespecies.ItisrecognisedacrossColombiaandLatinAmericaasanexampleofbestpracticeinlandrehabilitation,winninganEnvironmentalResponsibilityawardfromtheSiembraColombiaFoundationandtheBritishEmbassyin2009.

HeadoftheProgramme,RamónGualdrón,explainshowthemethodologyhasdeveloped:“Wecreatedanactionplanbasedonsoundprinciplesandcriteria,andwecontinuallytestittoproveourassumptionsandapplythelessonswelearn”.

“Wemonitorprogressbycarefullytrackinghowthetreatedsoilevolves,andcomparingthiswithhowtheuntouchedlandsdevelopoverthesameperiod.”

A six-part journeyLandrehabilitationbeginsbeforetheminingstage,withtheremovalandpreservationofsoilbanks.Thisnaturalresourceisirreplaceableandessentialtotheprocess.Faunaisanothervitalcomponentofthelandbeingrehabilitated.It’simportantasatransformationagentinthevegetationcycle,helpingtocreatefavourablegrowingconditionswithoutexternalassistance.Protectingfauna,andtheCerrejónfaunacentre,arebothintegralpartsofthecycle,eventhoughtheyarenotconsideredapartofthelandrehabilitationprogramme.

Stage 1: Reshaping the mining depositsThefirststageintheprocessistoevenout,tillandreshapethedepositsofwasterock(tailings)fromoldpits,dumpareasandabandonedsupportareas,andaddalayerofloosesoilwhichhasbeenstoredinsoilbanksandwhichwillberestoredthroughanacceleratedrehabilitationprocess.

Stage 2: Merging the deposits and the new soilMildrainfallthenbindstheolddepositsandtheloosesoiltogether,andthisistilledagain-flatterlandbyplough,slopesbyoxen-beforetheonsetofthe

Case Study

CerrejónlandrehabilitationprogrammeColombia

21

heavierrainyperiodinthesecondhalfoftheyear.

Stage 3: Sowing the seedsBuffelgrassseedsarethenhand-sownandmixedwithfreshsoil-whichensuresanevendistributionandincorporatesmicroorganismsintheearthforwhenthefirstplantsgerminate.

Stage 4: The first plants arriveThefirstgenerationofgreenplantsstartgrowing,alongwithother,youngeronesfromtheseedsinthesoil,andtheserapidlyproducevegetationthatprotectsthesoilagainsterosion.Carbonisaddedtothesoiltohelpitretainrainwaterandnutrients.Thiscreatesbetterconditionsforthetreeswhichwilllatergrowthere.

Stage 5: Bringing nitrogen into the soilWhenthegrasseshaveusedupthesoil’snitrogenreserves,theybecomelesscompetitiveandallowtreesandfoliagefromtheleguminousplantspeciestogrow.Essentialtotherehabilitationprocess,theseproducemorenitrogenandconvertittoammonia-aprocessknownas‘fixing’-whichcreatesanenvironmentwhereotherspeciescangrow.

Stage 6: New growth and new species arriveGradually,thevegetationgrowsandstabilises,generatesnewresourcesandcreatesahostenvironmentformorecomplexanddemandingspeciesofplants.Asthishappens,animalsstarttoinhabittheland,andthehumaninterventionbecomeslessandless-untiltherehabilitationprocessiscomplete.

A model for sustainable miningLandrehabilitationistheprocessthatclosestheminingcycle,sominingcompaniesmusthaveexpertiseinthisarea.Cerrejón’smethodologyisnowacceptedasaneffectivewaytorehabilitatelandaftermining-andthesitehasbecomeastopforvisitingacademicswithinagriculture,biologyandenvironmentalsciences.

CerrejónEnvironmentalManager,GabrielBustos,explainswhyithasbeensuchasuccess:“TheCerrejónprogramme’sbiggestimpacthasbeentoreducethecostandimprovetheefficiencyoftherehabilitationprocess.Ithasdonethisbyoptimisingthewaysoilisusedintheprocess”.

Theteamalreadysharesbestpractices,andtheirpersonalexperiences,withotherlocalinitiativesthatCerrejónpromotesinruralcommunities.Theirambitionistohelpimprovelandrehabilitationpracticeswithinthewiderindustry,andhelpmakecoalminingamoresustainableprocessforthefuture.Nooneisbetterequippedtodothisthanateamwhocanfullyrelatetotheneedsofmining,notonlyconsciousofthesectorsneeds,butalsoofitslocal,regionalandintergenerationalobligations.

hectares of land restored. Over half of thatcovered by forests containing more than140 native plant, shrub and tree species.

2800


Coal mining companies in Santa Catarina State (Brazil) established the Santa Catarina Philanthropic Association (SATC) in 1959. The state had been experiencing difficulties in recruiting qualified labour to work in coal mines and established SATC to assist in raising awareness of coal mining and encouraging and training people to work in the industry.

In1963,SATCinauguratedthe‘MaleIndustrialSchool’andin1969,‘GeneralOswaldoPintodaVeigaTechnicalSchool’starteditsfirsttechnicalcourses.Sincethistime,SATChascontinuedtogrowandcreatefurtheropportunitiesforlearning.

TheSATCcampusislocatedinthe‘Universitário’suburb,inCriciúma,coveringanareaof550m2.Thecampusincludesclassrooms,laboratorieswithadvancedtechnicalequipment,alibrary,anecologicalhikingsite,andsportscomplexwithtwocoveredgymnasiums,twosoccerfieldsandarunningtrack.TheworkofSATCcontinuestofocusoneducationandtechnologytohelppeoplefromlessfortunatecommunitieshaveabetterlife.SATCoffers2000scholarshipsand700studentshavefreeeducation.

EducationSATCEducationalTechnicalSchoolhasmorethan5000students,coveringprimaryschooltohighschoollevelstudents,aswellasofferingprofessionalqualificationcoursesforhighschoolandundergraduatelevelstudents.Everyyear,around700studentsfromtheschoolgraduate.

SATCCollegeoffersgraduateandpost-graduatecoursesfocusedontechnology.Thereareabout1200studentsenrolledinSATC’shighereducationcoursesintheareasoftechnology,engineering,designandcommunication.

SATCextensioncourses(SATCTEC)coverexecutiveeducation,businessskills,distancelearningandthefurtherdevelopmentofsocialskills,servingthecommunityandassistingcompanieswiththequalificationsandskillbaseoftheirworkforce.SATCextensioncoursescoveranumberofareas,includingmechanics,electricsandcomputing.It

hasalanguagecentre,withEnglishasthemainlanguage,andaninternshipprogrammethathelpstoplacestudentsinwork.SATCalsorunsa‘SATCforEverybody’programme,whosegoalistohelpdevelopnewprofessionalsfromlessfortunatecommunities,creatingjobopportunitiesandofferingfreecoursestoobtainprofessionalqualifications.

SATCalsoprovidesdentalhealthcaretostudentsandpsychologyassistancetostudentsandfamilies,aswellasatraineeapprenticeprogramme.

TechnologyTheSATCTEChasthreecertifiedlaboratories(NBRISO9001:2000)whichoffertechnicalsupporttocompaniesandinstitutionsthroughworkonmetrology,coalanalysisandtestingandalsochemicalandenvironmentanalysis.In2009,theworkofSATCinthetechnicalfieldincluded:

• TheCleanCoalResearchCenter(CTCL)thatworksintheareasofmining,geologyandtheenvironment.Themainfocusofthecentreisthedevelopmentofproductiontechnologiesandthetechnologiestoimprovetheenvironmentalimpactoftheuseofcoal,whichisvitalforthedevelopmentofthecoalsectorinBrazil.

• Technology-basedPre-incubator(PRINTEC)whichwillprovideinstitutionalsupporttoolstobusinessproposalsandideaswhichhavemarketfeasibility.

Case Study

CommunityEngagementBrazil

23

ThroughPRINTEC,entrepreneursinvarioussectorswillbeabletoaccesstrainingandsupporttoputtheirbusinessplansintoaction.

Environment & Social WorkSATChasmadeimprovementsinitsenvironmentalmanagementsystem,whichin2008ledittobecomecertifiedwithIS014001,makingSATCthefirsteducationalinstitutioninSantaCatarinatobecertifiedandonlythefourthinBrazil.


The eMalahleni Water Reclamation Plant – situated in the Witbank coalfields of South Africa’s Mpumalanga province – has turned a major liability into a valuable asset that has created far-reaching benefits for the environment, the local community, and its feeder collieries.

Theaward-winningprojectisapublic-privatepartnershipthatwasjointlyundertakenbyAngloCoalSouthAfrica,BHPBillitonEnergyCoalSouthAfrica(BECSA)andtheeMalahleniLocalMunicipality,andhasbeendescribedasa“worldclassinitiativeandanexemplarymodelfordevelopment”.

Approximately130millionm3ofwaterisstoredinAngloCoal’sundergroundworkings,afigurethatisrisingbyover20megalitresperday.Awiderangeofoptionstomanagethiswaterhasbeenmaximisedandexhaustedoveraconsiderableperiod;thecompanythereforeundertookextensiveresearchintovarioustreatmentsolutions,withdesalinationbeingoneofthem.

Followingoveradecadeofresearchanddevelopment,AngloCoalenteredintoaR300millionjointinitiativewithBECSAandabulksupplyagreementwiththewaterstressedeMalahleniLocalMunicipality.Theresultwastwocompetingglobalresourcecompaniescomingtogethertosolveacommonproblemandprovideasustainablesolutionthatbenefitsthecommunitiesthatresidearoundtheirminingoperations.

Commissionedin2007,theplantdesalinatesrisingundergroundwaterfromAngloCoal’sLandau,GreensideandKleinkopjecollieries,aswellasfromBECSA’sdefunctSouthWitbankMine.Bydoingso,itpreventspollutedminewaterfromdecantingintotheenvironmentandthelocalriversystem,whilealsoalleviatingseriousoperationalandsafetychallenges.

Usingthelatestinwaterpurificationtechnology,itiscurrentlydesalinatingrecordproductionvolumesof23megalitresofwatertopotablequalityperday,18megalitresofwhichispumpeddirectlyinto

themunicipality’sreservoirs,meetingsome20%ofitsdailywaterrequirements.

Theplant’sall-timerecordof25.8megalitresinonedaywasachievedinSeptember2008,whileaweeklyrecordof169megalitresandanall-timebestoutputof632megalitresinonemonthwereaccomplishedinAugustofthatyear.

AdditionalwaterispipedtoGreenside,KleinkopjeandLandaucollieriesaswellasvariousnearbyAngloCoalservicedepartmentsfordomesticuseandforminingactivities,suchasdustsuppression.Theseoperationsarenowself-sufficientintermsoftheirwaterrequirements,whicheasestheserioussupplyproblemsofthelocalmunicipality.

TheplantwillalsosupplyeightmegalitresofpotablewaterperdaytoZondagsfontein,anAngloInyosiCoalgreenfieldproject,BECSA’sKlipspruitmineandthePholacoalwashingplant,ajointventurebetweenthetwomininghouses.

Critical need for waterTheeMalahleniLocalMunicipalityhaslonggrappledwithsupplyanddemandproblemstocaterforthewaterneedsofanareaexperiencingconsiderableindustrial,commercialandresidentialgrowth.TheplantisalsoaidingtheprovincialgovernmentinmeetingitsMillenniumDevelopmenttargettoensurethatnohouseholdgoeswithoutapotable,reliableandpredictablewatersupplybytheendof2008.

Case Study

EmalahleniWaterReclamationPlantSouth Africa

25

Apartfrombenefitingthelocalcommunitybysupplementingthelowdomesticwatersupply,ithascreatedanumberofjobopportunities.Duringtheconstructionphase,between650and700temporaryjobswerecreated,while40permanentpositionswerecreatedfortherunningoftheplant.Eighty-sixpercentoftheworkforcecomprisesHistoricallyDisadvantagedSouthAfricans,while91%havebeensourcedfromsurroundingcommunitiesinanareaofhighunemployment.

Enterprise developmentDuring2007,AngloZimele,AngloAmerican’senterprisedevelopmentandempowermentarm,createdablackempoweredenterprisethatutilisessomeoftheplant’swaterfortheretailbottlingindustry.KnownastheWhiteRiverBeverageCompany,thebusinessmarketsabrandknownas4LifetotheSouthAfricanbottledwatermarket,whichisgrowingbyapproximately15%perannumandenjoysaturnoverofinexcessofR850millionperyear.Sofar,theenterprisehascreatedjobsforsevenpeople.Onlyaverysmallpercentage(<0.01%)ofthewaterproducedattheplantiscurrentlybottled.

Zero waste facilityTheplantoperatesata99%waterrecoveryrateandtheultimategoalisforittobeazerowastefacilitythroughthe100%utilisationofitsby-product.The100tonnesofgypsumitproducesdailyisnotonlycostlytodisposeof,butisanenvironmentalandpost-closureliability.

AngloCoalhaslaunchedtwoR16millionresearchanddevelopmentprojectsthatmayoffsetthecostofthewatertreatmentfacilityandreapfurtherfinancialandenvironmentalbenefits.

Thefirststudy,whichisbeingco-fundedbytheNationalResearchFoundation’sTechnologyandHumanResourcesforIndustryProgramme,islookingintotheconversionofwastegypsumintosulphur,limestoneandmagnesite.

Thesecondisinvestigatingtheby-product’suseintheproductionofusableminingandbuilding

products.Thelocalbankingsectorhasbeenmandatedbygovernmenttoprovideassistanceineliminatingthecountry’smassivebackloginhousing,whichhasspurredthemintoseekingalternativebuildingmaterials.

Theboomintheconstructionindustryhascausedconventionalresourcessuchasbricksandcementtobeinshortsupply,andhasdrivenupthecostofhousing.Aspartofthisstudy,thecompanyhasbuiltathree-bedroomhouseconstructedalmostentirelyoutofgypsum-basedbuildingproducts.

Itiscurrentlyundergoingarangeofteststoproveitsqualityandsocialacceptance,andshouldtheprojectbesuccessfulitisenvisagedthatablackempoweredentitywillbecreatedtomanufactureandmarketgypsumbuildingproductsonamassscale.

Future developmentsPhasetwooftheplantmeansthefacilitycandesalinate50megalitres(withamaximumcapacityof60megalitres)ofwaterperday.

Theprojecthasbeendesignedtotakeintoaccounttheremaining20-25-yearlifeofcontributingmines,andtocaterforpostclosureliabilitieswhichwillrequirethedesalinationofminewaterinexcessof30megalitresperday.Theplantwillcontinuetorunpostmineclosure.


By taking responsibility for the health of its workforce, multinational mining company Anglo American showed that providing healthcare isn’t just the right thing to do – it’s also a good investment.

Between1990and1998,theprevalenceofHIVinSouthAfricarocketedfromlessthan1%tomorethan22%.InAugust2002,AngloAmericanannouncedthatitwasmakingantiretroviraltherapy(ART)availabletoitsentiresouthernAfrica-basedworkforce.Eventhearchitectofthescheme,ChiefMedicalOfficerDrBrianBrink,describeditas“aleapoffaith”.

However,byJuly2010,itwasclearthatthebenefitsoftheARTprogrammefaroutweighedthecosts.ProvidingARTtooneworkerforonemonthcostAnglo$126butresultedinsavingsof$219.

Testing and treatmentAngloAmerican’sHIV/AIDSprogrammeisbasedonanambitioustargetofthreezeroes:zeronewinfections;zeroemployeesfallingsickordyingfromAIDS;andzerobabiesbornHIVpositiveinemployees’families.UNAIDS,theJointUnitedNationsProgrammeonHIV/AIDS,hasnowadoptedthesesametargets.

AcornerstoneoftheprogrammeisvoluntarycounsellingandHIVtesting(VCT).In2003,lessthan10%ofsouthernAfrica-basedAngloAmericanstafftookadvantageofVCT,butby2010,94%ofemployeeswerecheckingtheirstatuseveryyear.ThismeansAnglocancalculatetheprevalenceofHIVandtheincidenceofnewinfectionsmoreaccuratelythaneverbefore.

AssoonasanemployeetestsHIVpositivetheycanenrolintheHIVWellnessProgramme,whichprovidesongoingcounsellingandimmune-systemmonitoring.Whenthemonitoringindicatesthetimeisright,theycanstartreceivingART.

In2010,about12,000employeeswereHIVpositiveandabout4000ofthosewerereceivingART.

Theprogrammeisalsoavailabletoworkers’dependents–acomplexexercise,giventhatmanyarescatteredaroundsouthernAfrica,ofteninremotevillageswithlittleaccesstohealthcare.About400dependentsarecurrentlyenrolledintheHIVWellnessProgramme,and75%ofthemarereceivingART–thoughestimatesindicatethattherearestillmanymoreinneed.

PeopledodropoutofART,butAngloisworkingtoimprovelong-termadherencetotreatment.Fewerthan20%ofthoseenrolleddroppedoutin2010,comparedtomorethan40%in2004.

TheprevalenceofHIVinsouthernAfricaislinkedtoarisingincidenceoftuberculosis(TB).PeopleenrolledintheHIVWellnessProgrammearealsoofferedTBpreventiontherapy,whichhasreducedAIDSmortalityby50%,andAngloAmericanalsoadministersaTBcontrolprogrammebasedonsimilarprinciplestotheHIV/AIDSprogramme.

Healthier communitiesForDrBrink,theprogrammehasdemonstratedthatHIVcanbecontainedandAIDScanbemanaged.Yetheisstillconcernedwiththebiggerpicture.

“ItisincreasinglyevidentthatastandaloneresponsetoHIV/AIDSwillneversucceedunlessitissupportedbyabroad-basedstrengtheningofthehealthsystem”.

Case Study

AngloAmericanHIV/AIDSprogrammeSouth Africa

27

In2003thecompanylaunchedtheAngloAmericanCommunityHIV/AIDSPartnershipProgramme,whichsupportsyouthprogrammes,clinicsandotherinitiatives,andengagesinpublic/privatepartnerships.TheseincludethebuildingofacommunityhealthcentreatLillydaleintheBushbuckridgemunicipality,Mpumalangaprovince,andaclinicinKathutownship,NorthernCapeprovince–bothofwhichprovideaccesstolife-savingART.

Angloisalsosponsoringthewritingofabusinessplantorevitaliseprimaryhealthcareinfoursub-districtsoftheEasternCape,anareathatmanyofitsworkersandtheirdependentscallhome.Theplanwillsetcleartargetsforimprovingthebasicindicatorsofhealth,includingHIV/AIDS,TBandmaternalandchildhealth.

Thebroad-basedstrengtheningDrBrinkenvisageswillrequirebetterhealthinformationsystems,usingmoderntechnologytomakedataaccessibleeveninremoteareas.AngloAmerican’sThermalCoalbusinesshasdevelopedsuchasystem,theHealthSource,whichiscurrentlybeingpilotedintwoimpoverishedareas.TheEasternCapeDepartmentofHealthhasalsoshownaninterest.

Setting an example to industryAngloAmerican’snexttargetistoencourageothercompaniestofollowinitsfootsteps.DrBrinkwantstheprivatesectortobecomeoneofthetoptendonorstotheGlobalFundtoFightAIDS,TBandMalaria.

AttheG20BusinessSummitinSeoul,ChiefExecutiveofAngloAmericanCynthiaCarrollpledged£1millionayeartotheFundforthenextthreeyears.

Thecompanyhasdemonstratedaclearbusinesscaseforthissortofinvestment.“Allthatisrequired,”saysDrBrink,“istheleadershipandthewilltogetthejobdone.”

Effects of Anti-Retroviral Therapy (ART) at anindividual level – the Anglo American experience

Cost savings (US$ per month)

Cost of ART Decline inabsenteeism

Note: The overall impact of HIV/AIDSis equivalent to 3.4% of payroll

Reduction ofhealthcareutilisation

Decrease instaff turnover

and benefitpayments –126 96

87

3693

33%

1%

Percentage of the world’s populationthat is currently infected with thetuberculosis bacillus – it can liedormant for years, with people onlybecoming sick when their immunesystem is weakened

Percentage of tuberculosisinfectionsamong AngloAmerican’s South Africa-basedemployees in 2010

Effects of Anti-Retroviral Therapy (ART) at anindividual level – the Anglo American experience

Cost savings (US$ per month)

Cost of ART Decline inabsenteeism

Note: The overall impact of HIV/AIDSis equivalent to 3.4% of payroll

Reduction ofhealthcareutilisation

Decrease instaff turnover

and benefitpayments –126 96

87

3693

33%

1%

Percentage of the world’s populationthat is currently infected with thetuberculosis bacillus – it can liedormant for years, with people onlybecoming sick when their immunesystem is weakened

Percentage of tuberculosisinfectionsamong AngloAmerican’s South Africa-basedemployees in 2010


Steel productionCoalisanimportantcomponentofglobalsteelproduction.AccordingtorecentstatisticsissuedbytheWorldSteelAssociation,therewasanincreaseinglobalsteelproductionin2010upto1413.5milliontonnesfrom1230.9milliontonnesin2009.Cokingcoalisanessentialelementinblastfurnacesteelproduction,makingup70%oftotalsteelproduction(theremainderisproducedfromelectricarcfurnacesusingscrapsteel).Worldcrudesteelproductionwas1.4billiontonnesin2010,involving721milliontonnesofcokingcoalinitsproduction.

Steelisanessentialmaterialformodernlife.Manufacturingsteeldeliversthegoodsandservicesthatoursocietiesneed–healthcare,telecommunications,improvedagriculturalpractices,bettertransportnetworks,cleanwaterandaccesstoreliableandaffordableenergy.Itisfundamentaltoamoresustainableworld,helpingtobuildlighter,moreefficientvehicles,newhighlyefficientpowerstationsandintheconstructionofsmartelectricalgrids.Steelisacriticalcomponentintheconstructionoftransportinfrastructureandhighenergyefficiencyresidentialhousingandcommercialbuildings.

Figure 13. Coal’s role in sustainable energy

Source: www.vestas.com. Key: t = metric tonnes

150tof coal required for materials for onshore turbines

250tof coal required for materials for offshore turbines

Coal Used in a 3 MW Wind TurbineCoal’s Role in Sustainable Energy

Source: www.vestas.com/en/about-vestas/sustainability/wind-turbines-and-the-environment/life-cycle-assessment-(lca)

Key: t = metric tonnes

Raw materials& resources

ManufacturingSuppliers

Transport

Transport& erection Raw materials

& resources

Suppliers Manufacuring

Transport

Transport& erection

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Steelalsohasasignificantroleindeliveringrenewableenergy;eachwindturbinerequires260tonnesofsteelmadefrom170tonnesofcokingcoaland300tonnesofironore.Chinaisbyfartheworld’slargeststeelproducerfollowedbyJapan,theUnitedStates,IndiaandRussia.TherehasbeenasignificantshifttowardsChinainglobalsteelmarketsoverthepast10years.China’sshareofglobalproductionincreasedfromjustover15%in2000tomorethan44%in2010,duringaperiodwhereglobalsteelproductiongrewbytwo-thirds.LikewiseChina’sshareofsteeluse(measuredbyfinishedsteelproducts)increasedfrommorethan16%tojustunder45%ofglobaluse.

However,otherdevelopingeconomiesinLatinAmerica,Asia,AfricaandtheIndiansub-continent,wheresteelwillbevitalinimprovingeconomicandsocialconditions,arealsoexpectedtoseesignificantincreasesinsteelproduction.Intheseregions,accordingtotheWorldSteelAssociation,morethan60%ofsteelconsumptionwillbeusedtocreatenewinfrastructure.

Withworldsteelproductionexpectedtocontinuetogrow,theoutlookforthecokingcoalsectorwillalsobestrong.Withaverageannualgrowthofmorethan5%perannumduring2000–2010andwiththecontinuingincreaseddemandfromChina,indicationsarethatthemarkedgrowthinsteelproductionislikelytocontinuewellintothefuture.

Cement productionCement,likesteel,playsamajorroleintheconstructionindustry.Cementisusedtocombineaggregatestoformconcrete.Fewconstructionprojectstakeplacewithoutusingcement.Togethercementandsteelplayasignificantroleinbuildingemergingeconomiesandsupportingsocio-economicdevelopment.

Concretehasanessentialroleinmodernsociety.Itisusedtobuildschools,hospitals,homes,andkeypublicinfrastructuresuchasbridges,tunnels,dams,seweragesystems,pavements,runways,roadsandmore.

Figure 14 . Global steel production

Source: World Steel Association, World Steel in Figures 2011


Coalcombustionproducts,suchasflyash,alsoplayanimportantroleincementmanufactureandmoregenerallyintheconstructionindustry.Coalcombustionproducts(CCPs)canplayanimportantroleinconcreteproduction.CCPsaretheby-productsgeneratedfromburningcoalincoal-firedpowerplants.

Coal and waterInadditiontoenergysecurity,watersecurityisexpectedtobeamajorchallengeinthecomingdecades.AccordingtotheOECD2.8billionpeople,oralmosthalfoftheworld’spopulation,liveinareasofhighwaterstress.Thisnumberisexpectedtoincreaseby39%withinthenexttwodecades.By2030,theglobaldemandforwatercouldoutstripsupplyby40%ifcurrentconsumptiontrendsarenotchanged.

Water in energy generationEnergygenerationisusuallyassociatedwithhighwaterconsumption.Coolingsystemsrepresentthehighestproportionofwaterconsumptioninenergygeneration.Thismakeswateranessentialelementoftheenergygenerationprocess.Infact,thehighertherelianceonwaterforcoolingpurposes,thehighertheriskthatpowergenerationoutputmightbeaffectedduringhotsummersordroughts.ReportsbytheIEAandtheWorldPolicyInstitute(WPI)showthathydro,geothermal,nuclearandconcentratedsolarpowerarethemostwaterintenseamongtheexistingelectricitygenerationtechnologies.Generatingelectricityincoal-firedpowerplantsalsorequiresasignificantamountofwaterforcoolingpurposes.

Usingintegratedgasificationcombinedcycle(IGCC)technologyatcoal-firedpowerplantscanreducewaterconsumptionbyhalf.IGCCplantsconsumearoundthesameamountofwaterasnaturalgasplants;thatisfourtimeslessthansolarthermalandseventimeslessthangeothermalenergy.

Concreteisinfactthemostusedman-madematerialintheworldandisintegraltotheconstructionoflonger-lastingenergy-efficientbuildings.AccordingtotheWorldBusinessCouncilforSustainableDevelopment,threetonnesofconcreteareusedannuallyforeveryindividualontheplanet.

Coalisusedasanenergysourceincementproduction.Largeamountsofenergyarerequiredtoproducecement.Kilnsusuallyburncoalintheformofpowderandconsumearound450gofcoalforabout900gofcementproduced.

Figure 15. World cement production (in thousand metric tons)

Country 2009 2010UnitedStates 64,900 63,500Brazil 51,700 59,000China 1,629,000 1,800,000Egypt 46,500 48,000Germany 30,400 31,000India 205,000 220,000Indonesia 40,000 42,000Iran 50,000 55,000Italy 36,300 35,000Japan 54,800 56,000Korea,Republicof 50,100 46,000Mexico 35,200 34,000Pakistan 32,000 30,000Russia 44,300 49,000SaudiArabia 40,000 45,000Spain 50,000 50,000Thailand 31,200 31,000Turkey 54,000 60,000Vietnam 47,900 50,000Othercountries 466,000 520,000(rounded)

Source: US Geological Survey

Steel delivers the goods and services that our societies need – healthcare, telecommunications, improved agricultural practices, better transport networks, clean water and access to reliable and affordable energy. It is fundamental to a more sustainable world.

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Water in miningMiningcoalisresponsibleforaroundatenthofwaterconsumptionacrossthechainofenergyproductionandelectricitygeneration.

Waterreclamationandcarefulmanagementtechniquesarecriticaltomanagingwaterresources.Thecoalindustryhasalreadymadesignificantcontributionstothiseffort.Self-sufficiencyinwaterconsumptionplaysakeyroleinreducingtheimpactofcoalminingonlocalcommunitiesandreclamationcanalsoallowforincreasedwatersupplyinareaswithlimitedresources.

Mineoperationsworktoimprovetheirwatermanagement,aimingtoreducedemandthroughefficiency,technologyandtheuseoflowerqualityandrecycledwater.Waterpollutioniscontrolledbycarefullyseparatingthewaterrunofffromundisturbedareas,fromwaterwhichcontainssedimentsorsaltfrommineworkings.Cleanrunoffcanbedischargedintosurroundingwatercourses,whileotherwateristreatedandcanbereusedinactivitiessuchasdustsuppressionandincoalpreparationplants.

Figure 16. History of world steel production

Source: World Steel Association, World Steel in Figures 2011


Deliveringsustainabledevelopmentisasignificantglobalchallenge.Thereisamultiplicityofissues,whichmustbeaddressedasintegratedchallenges,notasisolatedproblems.Ensuringaccesstoelectricityandsupportingeconomicgrowthisessentialtoglobaleffortstoeradicatepovertyandsupporthumandevelopment.AddressingglobalCO2emissionsisessentialtomitigatingtheimpactsofclimatechange.Managingourenvironmentisessentialtoconservebiodiversity.

Thesechallengesrequirecoordinatedandintegratedinternationalaction.

Energy and the Millennium Development GoalsAttheMillenniumDevelopmentSummitin2000worldleadersadoptedeightgoalstobeachievedby2015.Thesewereaimedateradicatingextremepoverty,improvingaccesstoeducation,improvinghealthoutcomes,suchasreducingchildmortality,andfightingepidemicssuchasHIV/AIDS.

Asoneofthefundamentalsofmodernsociety,accesstoenergyisakeycomponenttoachievingthesegoals(seetableonpages34-35).Withoutaccesstomodernenergy,hospitalsandschoolscannotfunctioneffectively.Womenandchildrensufferdisproportionatelytheeffectsofburningwoodanddunginthehome.

YetthereisnoenergyaccesstargetintheMillenniumDevelopmentGoals.

Ifthereistobeeffectiveglobalactiontoaddresspoverty,thenaddressingenergypovertymustbeamajorpriority.Anambitiousenergyaccessgoalwouldnotjustalleviateextremepovertybutwouldalsosupportmoreambitiousdevelopmentobjectives.Thiswouldenableglobaleconomicandsocialdevelopmenttobeaccelerated.Arecentstudyindicatedthata“moderateaccess”scenario(seeFigure3ofthisreport)thatwouldsupporttheneedsofbusinessandindustryrequiresanelectricitycapacityofaround200-400MWpermillionpopulation.Electricityscenariosatthislevel,whileambitious,woulddelivergenuineeconomicandsocialdevelopment.

Our recommendationAn ambitious target for global energy access must be adopted. This target needs to be one that will

support the eradication of poverty, the growth of businesses and industries and true economic and social development. National governments and global institutions should work towards an energy target of at least 400MW of installed electrical generation capacity per million of population.

Part 4Timeforaction

Action for

Energy

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Advanced coal technologiesAllenergysourcesandallenergytechnologieswillbeneededtomeettheglobalchallengeofprovidingenergyaccessforall.Renewableenergies,gas,nuclear,coalandcleanercoaltechnologiesallhavearoletoplayinmeetingglobalenergyneeds.Therearearangeofmoderncoaltechnologiesthatwillsupportthedeploymentofenergywhilealsosupportingclimateandgreenhousegasmitigationobjectives.

Therearetwomajortechnologiesthatmustbebackedbytheinternationalcommunityfordeploymenttosupportinternationalenergyandclimateobjectives:

• Advancedpowergeneration–supercriticalandultra-supercriticaltechnologies–eachpercentagepointimprovementincoalpowerefficiencyreducesgreenhousegasemissionsby2-3percentagepoints.

• Carboncaptureandstorage–aglobalclimatemitigationenergyportfoliowithcoalandCCSisestimatedbytheIEAtobe70%lessexpensivethanaportfoliowithoutcoalandCCS.Thispotentiallycouldreleasemorefundingforinvestmentforpovertyeradication.

Thereshouldalsobemoreinvestmentinothertechnologiesthatsupporttheuseofcoalresources:

• Undergroundcoalgasification–UCGisemergingasatechnologytoutiliseotherwiseunrecoverablecoalresourceswithfewergreenhousegasemissions,potentiallyunlockingacleanersourceofenergyforgenerationstocome.

• Coaltoliquidfuelsandsyntheticnaturalgas–CTLandSNGprovidereliablesourcesofliquidfuelswhendemandishighorpricesarehigh.Theyalsoprovideincreasedopportunitiestodelivercleancookingfuelsinthedevelopingworld.

Thesetechnologieswillbeapplicableindifferentcontextsandsomemaysuitonelocationmorethananother.Howevertheywillallbepartofafutureglobalenergymixthatsupportsbothenergyaccessandclimateobjectives.

Our recommendationNational governments and international institutions must support the rapid deployment of all advanced

coal technologies, particularly improved efficiencies at power stations and CCS.

Financing cleaner coalInternationalsupportisneededtofinancecleanercoalenergysolutionsbecauseallsourcesofenergywillbeneededtosupporteconomicandsocialdevelopmentandtheeradicationofenergypovertyinthedevelopingworld.Nationalgovernmentsareentitledtoassesswhichsourcesofenergyaremostsuitabletotheirownneedsandtheirownresourceavailability.Decisionsonwhichenergysourcesshouldbeutilisedtofurthernationaldevelopmentplansshouldbemadebynationalgovernmentsandnotbyinternationalinstitutions.Itistheroleofinternationalinstitutionstosupportnationalgovernmentsintheirdecision-makingandimplementationprocesses.

Our recommendationInternational financial institutions must adopt policies that will allow national governments

to determine which energy solutions are appropriate to their needs and support those decisions with the appropriate financial backing.

Action for

Energy

Action for

Energy


Millennium Development Goal Importance of Energy Coal

Eradicateextremepovertyandhunger Energyinputssuchaselectricityandfuelsareessentialtogeneratejobs,industrialactivities,transportation,commerce,micro-enterprisesandagricultureoutputs.Moststaplefoodsmustbeprocessed,conservedandcooked,requiringheatfromvariousfuels.

• Over40%oftheworld’selectricitycomesfromcoal,providingsecureenergy.

• TherapidelectrificationinSouthAfrica,IndiaandChinahasbeenheavilydependentonaffordablecoal.

• Coaldirectlyprovidessevenmillionjobsworldwideandcoalproductionisthekeytoeconomicactivityinmanycommunities.

Achieveuniversalprimaryeducation Toattractteacherstoruralareaselectricityisneededforhomesandschools.Afterduskstudyrequiresillumination.Manychildren,especiallygirls,donotattendprimaryschoolsinordertocarrywoodandwatertomeetfamilysubsistenceneeds.

• Inadditiontoprovidingreliableaffordableelectricity,manycoalcompaniesprovideeducationandfacilitieswithintheircommunities.

• TheBrazilianCoalAssociationhasworkedwithcompaniesintheSantaCaterinaareatodevelopauniqueeducationalandskillstrainingcentre,meetingtheneedsofchildrenandadultsalike.

Promotegenderequalityandempowerwomen

Lackofaccesstomodernfuelsandelectricitycontributestogenderinequality.Womenareresponsibleformosthouseholdcookingandwaterboilingactivities.Thistakestimeawayfromotherproductiveactivitiesaswellasfromeducationalandsocialparticipation.Accesstomodernfuelseaseswomen’sdomesticburdenandallowsthemtopursueeducational,economicandotheropportunities.

• Coalprovidesreliableandaffordableelectricity,withmorethan1billionpeoplegainingaccessviacoalinthepasttwodecades.

• Convertingcoaltoultracleanliquidfuelsfordomesticusecanmakeanenormousdifferencetowomen’slives,aswellastochildrenandtheelderlywhoaredisproportionatelyaffectedbyindoorairpollution.

• Liquidfuelsfromcoalcansignificantlyreducepollutantsthatimpactlocalairqualitysuchasnitrogenoxidesandparticulates.Liquidfuelsfromcoalaresulphurfree.

• Chinahas,withfinancingfromtheInternationalFinanceCorporation(theprivatesectorarmoftheWorldBank),setupthefirstCoal-to-Liquidsplanttoprovideultracleanfuelsfordomesticuse.

• IfCTLfuelsareproducedusingcarboncaptureandstorage,CO2emissionscanbereducedbyasmuchas20%overthefullfuelcyclecomparedtoconventionaloilproducts.

Reducechildmortality Diseasescausedbyunboiledwater,andrespiratoryillnesscausedbytheeffectsofindoorairpollutionfromtraditionalfuelsandstoves,directlycontributetoinfantandchilddiseaseandmortality.

Improvematernalhealth Womenaredisproportionatelyaffectedbyindoorairpollutionandalsobywaterandfood-borneillnesses.Lackofelectricityinhealthclinics,illuminationfornighttimedeliveries,andthedailydrudgeryandphysicalburdenoffuelcollectionandtransportallcontributetopoormaternalhealthconditions,especiallyinruralareas.

AnnexCoalandtheMillenniumDevelopmentGoals

35

Millennium Development Goal Importance of Energy Coal

Ensureenvironmentalsustainability Energyproduction,distributionandconsumptionhavemanyadverseeffectsonthelocal,regionalandglobalenvironment,includingindoor,local,andregionalairpollution,localparticulates,landdegradation,acidificationoflandandwater,andclimatechange.Cleanerenergysystemsareneededtoaddressalloftheseeffectsandtocontributetoenvironmentalsustainability.

• Coalisfacinguptoitsenvironmentalchallengesandpromotestheuseofcleancoaltechnologieswhichreducelocal,regionalandglobalimpacts.

• Gasificationofcoalcanreduceemissionsofparticulates,sulphuroxidesandnitrogenoxidesbyupto99%.

• CCSmustbeincludedinanyportfolioofmitigationoptionswheresignificantreductionsinCO2emissionsaretobeachieved.

• CCSisrecognisedasreducingthecostsofoverallmitigationby30%ormoreandglobalstoragecapacityisimmense.

Developaglobalpartnershipfordevelopment

TheWorldSummitforSustainableDevelopmentcalledforpartnershipsbetweenpublicentities,developmentagencies,civilsocietyandtheprivatesectortosupportsustainabledevelopment,includingthedeliveryofaffordable,reliable,andenvironmentallysustainableenergyservices.

• FutureGenisaninternationalpublic-privatepartnershiptobuildacommercialscale,coal-fuelled,near-zeroemissionspowerplantusingcoalgasificationandcarboncaptureandstorage.

• CoalcompaniesparticipateintheCarbonDisclosureProject-theworld’slargestinstitutionalinvestorcollaborationonthebusinessimplicationsofclimatechange.

• MembersofthecoalindustryalsoparticipateintheGlobalReportingInitiative-aninternationalcollaborativenetworkforreportingoneconomic,environmentalandsocialperformance.

CombatHIV/AIDS,malariaandotherdiseases

Electricityforcommunicationsuchasradioandtelevisioncanspreadimportantpublichealthinformationtocombatdeadlydiseases.Healthcarefacilities,doctorsandnurses,allrequireelectricityandtheservicesthatitprovides(illumination,refrigeration,sterilisationetc)todeliveryeffectivehealthservices.

• Affordableandreliableelectricityfromcoalcanplayadirectandmajorroleincombatingdeadlydiseases–bypoweringcommunication,equipmentandservices.

• Coalcompaniesalsoplayadirectroleinhealthcareprovision,oftenaheadofstateservices.

• InSouthAfrica,coalcompanieshavebeenoperatingmajorHIV/AIDStreatmentprogrammes,providingfreeantiretroviraldrugs.

• InColombia,coalcompaniesworkwithlocalorganisationstoprovide‘healthbrigades’toindigenouspeoples.Recentactivitiesincludewidespreadvaccinationagainstyellowfever.


Base load electricity–istheminimumlevelofsupplyneededonanelectricitygridnetwork.Baseloadpowersourcesarethoseplantswhichcangeneratedependablepowertoconsistentlymeetdemand.Baseloadgenerationwilloperate24hoursaday,7daysaweek.

Carbon capture and storage (CCS)–agroupoftechnologiesusedtoreduceCO2emissionsfromlargeCO2sources(suchasfossilfuelorbiomasspowergeneration)andindustrialprocesses(suchascement,ironandsteelandfertilisermanufacturing).Followingcapture,CO2istransportedandstoredinspecificallyselectedandcharacterisedgeologicalformationsover1000mbelowtheground.(IEA)

Clean Development Mechanism (CDM)–allowsemission-reductionprojectsindevelopingcountriestoearncertifiedemissionreduction(CER)credits,eachequivalenttoonetonneofCO2.TheseCERscanbetradedandsold,andusedbyindustrialisedcountriestomeetapartoftheiremissionreductiontargetsundertheKyotoProtocol.Themechanismstimulatessustainabledevelopmentandemissionreductions,whilegivingindustrialisedcountriessomeflexibilityinhowtheymeettheiremissionreductionlimitationtargets.(UnitedNationsFrameworkConventiononClimateChange)

Coal-to-liquids –referstothetransformationofcoalintoliquidhydrocarbons.Itcanbeachievedthrougheithercoalgasificationintosyngas(amixtureofhydrogenandcarbonmonoxide),combinedwithFischer-Tropschormethanol-to-gasolinesynthesistoproduceliquidfuels,orthroughthelessdevelopeddirect-coalliquefactiontechnologiesinwhichcoalisdirectlyreactedwithhydrogen.(IEA)

Energy poverty–meansalackofaccesstomodernenergyservices.Theseservicesaredefinedashouseholdaccesstoelectricityandcleancookingfacilitiese.g.fuelsandstovesthatdonotcauseairpollutioninhouses.(IEA)

Enhanced oil recovery (EOR) –alsoknownastertiaryoilrecovery,followsprimaryrecovery(oilproducedbythenaturalpressureinthereservoir)andsecondaryrecovery(usingwaterinjection).VariousEORtechnologiesexist,suchassteaminjection,hydrocarboninjection,undergroundcombustionandCO2flooding.(IEA)

Installed capacity–isthemaximumamountofelectricitythatapowerplantcangenerateatanygivenpointintime.Acrossaneconomytheinstalledcapacityincludesallpointsofpowergeneration.

Millennium Development Goals (MDGs)–globalcommitmentstoeradicateextremepoverty.Theywereagreedbyalltheworld’scountriesandalltheworld’sleadingdevelopmentinstitutionsinSeptember2000.

Off-grid–referstoelectricitygenerationthatisnotconnectedtoaneconomy-wide,nationalormajortransmissionsystem.Definitionsofoff-gridusuallyincludebothstand-alonegeneratingsystemsandmini-gridsystems.Off-gridelectricitygenerationusuallyoccursinremoteorruralareasandincountrieswherethereislimitedaccesstoelectricity.

On-grid –referstoelectricitygenerationthatisconnectedtoaneconomy-wide,nationalormajortransmissionsystem.

Original-oil in place–isthetotalhydrocarboncontentofanoilreservoirbeforethecommencementofproduction.

Glossary

37

International Energy Agencywww.iea.org

IEA Clean Coal Centrewww.iea-coal.org.uk

International Year of Sustainable Energy for Allwww.sustainableenergyforall.org

United Nations Conference on Sustainable Development 2012 (Rio+20)www.uncsd2012.org

UN-Energywww.un-energy.org

United Nations Framework Convention on Climate Changewww.unfccc.int

United Nations Global Compactwww.unglobalcompact.org

United States Energy Information Administrationwww.eia.gov

World Bankwww.worldbank.org

World Coal Associationwww.worldcoal.org

World Energy Councilwww.worldenergy.org

World Energy Outlookwww.iea.org/weo/

Further reading


Membershipisopentocoalenterprisesandstakeholdersfromanywhereintheworld.TheWCAhasmorethan40membersspreadacrosstheglobe.Ourmembershipincludesmanyoftheworld’slargestcoalproducersandincludesminingequipmentmanufacturers,nationalcoalindustryassociationsandcoalresearchbodies.MembercompaniesarerepresentedatChiefExecutivelevel.TheWCAistheonlyinternationalbodyworkingonbehalfofthecoalindustryworldwide.

ObjectivesThecoalindustry,includingbothinternationallytradedanddomesticcoal,needstopresentaunitedfronttothechallengesitfacesthisdecadeandbeyond.TheorthodoxythatviewscoalonlyasaCO2emitter–withoutregardtoitsroleineconomicandsocialdevelopment,essentialtoelectricitygenerationandsteelmanufacture–maybeataturningpoint.However,theindustryneedstocooperatetoensurethatthisturningpointoccurs.Forthatreason,theWCAhasadoptedaforwardlookingstrategythataimstoposition:

• coalasastrategicresourcethatiswidelyrecognisedasessentialforamodernqualityoflife,akeycontributortosustainabledevelopment,andanessentialelementinenhancedenergysecurity;and

• thecoalindustryasaprogressiveindustrythatisrecognisedascommittedtotechnologicalinnovationandimprovedenvironmentaloutcomeswithinthecontextofabalancedandresponsibleenergymix.

Thestrategycanonlybeachievedwiththecommitmentofleadingcoalproducersandstakeholders.

World Coal Association

MissionWCAanditsmembercompaniesengageconstructivelyandopenlywithgovernments,thescientificcommunity,multilateralorganisations,non-governmentalorganisations,media,coalproducersandusers,andothersonglobalissues,suchasCO2emissionsreductionandsustainabledevelopment,andonlocalissuesincludingenvironmentalandsocio-economicbenefitsandtheeffectsfromcoalminingandcoaluse.

TheWorldCoalAssociationisanon-profit,non-governmentalassociation.

39

Forfurtherinformation,pleasecontact:

WorldCoalAssociation5thFloorHeddonHouse149-151RegentStreetLondonW1B4JDUnitedKingdom

t:+44(0)2078510052f:+44(0)2078510061e:[email protected]

www.worldcoal.org

twitter.com/worldcoal

www.youtube.com/worldcoal

Commentsorsuggestionsarewelcomeandshouldbesenttoinfo@worldcoal.org

Coal – Energy for Sustainable Development

[email protected]

[email protected]

Thispublicationmaybereproducedinpartforeducationalornon-profitpurposeswithoutspecialpermissionfromthecopyrightholder,providedacknowledgementofthesourceismade.TheWorldCoalAssociationwouldappreciatereceivingacopyofanypublicationthatusesthispublicationasasource.NouseofthispublicationmaybemadeforresaleorforanyothercommercialpurposewhatsoeverwithoutpriorpermissioninwritingfromtheWorldCoalAssociation.

FirstpublishedintheUKinApril2012.

Copyright©2012WorldCoalAssociation

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