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Clean coal

Is there a future in a low-carbon world for coal?

If the target is to generate electricity without adding more CO2 to the atmosphere, there are a few options. A low-carbon world means one in which we stop pumping endless amounts of Carbon Dioxide into the atmosphere in the quest to generate much desired electricity. Some of the options I have already outlined: nuclear, solar, hydro, wind, biofuel, geothermal, oil and gas. Each has a place in the world and this place is generally dictated by the geography. For example, some countries can easily tap into geothermal energy, others can't. Some have reserves of oil, gas or coal, but not everybody. Rainfall is not evenly distributed across the planet.

New South Wales has coal: lots of it. From south of Wollongong to Gunnedah there are reserves of coal close enough to the surface to justify mining. The Bowen Basin in Queensland has even more. Coal is relatively easy to extract and transport and is in high demand. But: 1 tonne of coal burnt releases 2.8 tonnes of carbon dioxide as the carbon in the burning coal reacts with oxygen in the air during combustion. Eraring Power Station burns 5.2 million tonnes of coal a year: 15.4 million tonnes of carbon dioxide that have to go somewhere.

Can we generate electricity from coal without the pesky carbon dioxide? Actually, yes we can. Carbon capture and storage may be the saviour for coal. Technology exists to capture much of the carbon dioxide leaving the smoke-stacks, compress it and store it underground. Storage is relatively easy, but the capture part is expensive. So yes it can be done, but yes it will cost extra.

This is the question that Australia has to face in the next 10 years – as our existing coal fired power stations reach the end of their useful life as Liddell is about to do: what next? This has been closely watched by the electricity wholesalers such as Energy Australia as they seek to buy from various generators and sell to their industrial, commercial and domestic customers at a price where they can make a profit. The traditional market has been dominated by coal, but there are major changes happening. Both PV solar and wind generation are producing a lot of electricity cheaper than the coal fired power stations are able to do, but not as reliably. As more of us put solar panels on the roof, as more wind farms get built the need for a new massive coal fired power station starts to fall.

Given that any new coal fired power station would almost certainly be required to install carbon capture technology due to public pressure to reduce carbon emissions, which would in turn increase the cost of its electricity, is this the sort of investment that a bank is likely to want to finance? Already many people are looking to buy their electricity from 'green' suppliers – Red Energy has made major inroads by doing this: Newcastle City Council is buying all its electricity from a wind farm operator in New England.