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There is growing public interest for
renewable energy like solar and wind and this is fine. But when there is also corresponding
high opposition to coal, petroleum and even natural gas, then public policy is
distorted, like more taxation of conventional sources, royalties for Malampaya
natural gas. While the renewables are guaranteed of high electricity prices
that will be passed on to the consumers, via feed in tariff (FIT) for wind,
solar, biomass and run-of-river hydro. People do not recognize and appreciate
the value that conventional energy sources have played in alleviating poverty
and underdevelopment in the developing world.
For instance, there are claims like “more
coal energy = more climate crime”, or “more coal power plants are
anti-developmental.” How true or untrue are these and similar claims?
Let us check some regional and global
energy and economic data. In particular, global coal consumption as this is
among the pet peeves of those pushing for more environmental regulations,
energy rationing and carbon taxation.
In 2010, the latest comparative energy data
of Asian Development Bank’s (ADB) Key Indicators, slightly more than one-third
of the Philippines’ total energy production came from coal. For Indonesia, it
is 40 percent. Those that are highly dependent on natural gas are Brunei,
Singapore, Thailand, Malaysia and Vietnam.
Table
1. Energy Mix in the ASEAN, 1990 vs. 2010, Percent of Total Energy Production
Source: ADB, Key Indicators for Asia and
the Pacific 2013
Here now is the global data for coal
consumption.
Table
2. Top Coal Consumers Around the World, 1985 to 2013
(in Million
Tons of Oil Equivalent,MTOE))
The last column is not part of the original
data, added and created only in this paper.
The above numbers show the following:
First, China consumes half of all coal
power in the entire planet as of 2013, and the level is almost 5x that of their
1985 consumption level. Its appetite for more coal power seems to remain the
same in the coming years.
Second, India and Indonesia join China as
among the world’s biggest consumers of coal. India’s 2013 consumption was 4.7x
larger than its 1985 consumption. Indonesia’s is 60x much larger. This is
because Indonesia has become a major coal producer and exporter in recent
years.
Third, by continent and economic group,
Asia-Pacific countries consume nearly three-fourth of the total coal output of
the planet. Coal however, is least preferred in Africa as well as South and
Central America. And it is in the Asia-Pacific where substantial economic
growth and poverty alleviation has been happening for the past three decades or
more.
Now,
let us review global economic growth over the same period. The figures for 1995, 2005, 2011 and 2012 are
also given for additional information that some readers may wish to see. Data from
the International Monetary Fund (IMF).
Table
3. GDP Size Based on Purchasing Power Parity (PPP) Valuation, 1985 to 2013
(in Billions
of international dollars)
Source: IMF, World Economic Outlook April
2014 Database, www.imf.org
The last column is not part of the original
data, added and created only in this paper.
Notice that countries highlighted in bold
in Table 2 are generally the same as those highlighted in Table 3. Meaning those
that consumed coal energy faster also grew economically faster. Of course this
is not to say that coal power consumption is the primary or sole important
contributor to faster economic growth.
We now lay down the major players in both
coal consumption and GDP growth over nearly three decades. Is there any
correlation?
Table
4. Ten Fast Coal Consumers and their GDP Expansion, 1985-2013
Sources: Tables 2 and 3 above.
This summary table shows the following:
* Of the 10 countries that were fast coal
consumers over the past 28 years, meaning their 2013 coal consumption were at
least 4.5x their 1985 level (in contrast to many other countries with coal
consumption multiples of only around 2.5x),
eight have high GDP expansion
over the same period. For instance, China and India GDP levels have multipled
by 25x; S. Korea and Malaysia GDP levels multipled by nearly 10x, in just 28
years.
* Only Mexico and the Philippines in the
above table, fast coal consumers, whose
GDP expansion were the not-so-fast of less than 6x.
* Singapore and Vietnam economy expanded by 11 -
12x, also very fast compared to many other countries, even though they are not
major or fast coal consumers. They are largely dependent on natural gas, as
shown in Table 1.
* This crude comparison has
established a general correlation
between coal consumption and GDP expansion. Of course other studies would use
more sophisticated econometric models to make any categorical statement. But
such finding is easy to explain.
Coal is relatively cheap and a stable
energy source. A 100 MW coal power plant can deliver 100 MW 24 hours day, not
80 or 60 MW or lower. In contrast, a wind or solar power plant with rated cap
of 100 MW will be very lucky if it can deliver 40 MW sustained for 24 hours.
Usually their average dependable capacity is only around 20 percent, or just 20
MW only. So how can an economy develop fast if there is frequent brown out,
because the power plant can deliver only 10 or 20 or 25% of its rated capacity?
Industries and factories, malls and offices depending on wind and solar must
have back up generator sets running on expensive fuel, that must run any hours
daily, and this will raise their cost of production and operation.
The WWF yearly campaign of "celebrate
darkness" even for one hour is idiotic. WWF gets lots of money from donations and UN
or government funding, by promoting irrationality in energy policy.
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See also:
Energy Econ 21: Joint Statement on EPIRA Implementation, May 27, 2014
Energy Econ 22: FEF on FIT for Solar Power Plants, June 13, 2014
Energy Econ 23: Death of Australia's Carbon Tax, July 17, 2014
Energy Econ 24: NPC Debt, PSALM and Universal Charges, August 02, 2014
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