The role of coal in developing world growth As shown below, nations almost exclusively begin the process of industrialization with coal. There are some very obvious reasons for this: coal is cheap, reliable, simple, versatile and often locally available in abundance. These properties make coal several times more rapidly scalable than any other alternative in regions of the world where economic development is prioritized much higher than environmental protection (almost all developing nations). Those who do not understand these priorities are encouraged to visit a typical developing world slum or spend a month or so trying to live on 10 times less disposable income. Yes, we have many alternatives to coal, but they are nowhere near coal when it comes to fueling rapid industrialization. Capital costs of nuclear energy in China are about triple that of coal, implying that coal capacity can be expanded at roughly triple the pace of nuclear. Coal also has a multitude of direct industrial applications (almost half of Chinese coal is used directly in industry), adding another factor of two into the potential scaling rate. When also considering the value of the simplicity of coal in developing nations with large uneducated workforces, coal becomes roughly an order of magnitude more rapidly scalable than nuclear. As an example, even though nuclear has expanded very impressively in China and India in recent years, the pace of expansion is still about 50 times smaller than coal in absolute terms. As an illustration of this fact, the coal and nuclear energy consumption rates in China and India are plotted below (based on BP data) where it is clear to see that the ratio of coal/nuclear consumption has remained consistently high over the past decade of rapid industrialization. Wind/solar, in turn, are again several times less scalable than nuclear. Yes, in developed nations, nuclear is very expensive, takes many years to license and construct and faces great societal resistance, thereby making it less attractive than wind/solar at present. For the developing world (where the vast majority of new energy infrastructure is being constructed), however, the situation is very different. Nuclear capacity is only about twice as expensive as wind/solar capacity, implying that, when adjusted for capacity factor, it is at least two times cheaper. And then of course it must be mentioned that nuclear, unlike wind/solar, is a disptachable technology that can be seamlessly integrated into tried and tested centralized electricity networks that will remain mandatory to power the rapidly growing megacities of the developing world for many decades into the future. This brief analysis should make it clear that nuclear or wind/solar is not going to power 7% economic growth rates in the developing world. Unless we see some enormous shale gas expansion, this rapid growth demanded by billions of developing world citizens will continue to come primarily from coal.
Posted on: Sun, 27 Jul 2014 17:08:05 +0000
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