Global energy reforms moving at different pace

There is no single unified effort globally to change over to greener energy sources. Instead individual countries are working at their own pace and in their own way.

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Energy policies around the world are in transition as countries shift to more efficient and greener sources of power. But nations are moving at a different pace and in different directions.

Dubai's Supreme Council of Energy is pressing ahead with the first coal power station in the Arabian Gulf, an innovative plant that converts the coal to a gas before burning it. It will be fitted with a carbon capture system to trap the carbon dioxide so that it can be permanently disposed of underground. So far, there is no commercial-scale power plant with carbon capture, although several schemes are moving forward in the United States, Canada and China.

China, meanwhile, is scaling down its use of coal in a bid to combat air pollution, and plans to increase the share of nuclear power, natural gas and renewable energy. It is likely to remain heavily dependent on coal in the foreseeable future though. The government aims to cut coal's share of the country's total primary energy use to below 65 per cent by 2017 from 66.8 per cent at present.

China announced this month that it will ban new coal-fired power plants in three major industrial regions around Beijing, Shanghai and Guangzhou. It aims to raise the share of non-fossil fuel energy such as solar and wind power to 13 per cent by 2017. It was 9.1 per cent last year.

Coal plants face a bleak future in the United States, where the Environmental Protection Agency is soon due to unveil the first set of regulations under Barack Obama’s new climate action plan. It is expected to impose strict new carbon emissions standards that analysts say could spell the end of new coal plant construction.

The recent bankruptcy of the Longview coal plant in West Virginia highlights the problems of coal-fired power in the US. Longview went into operation in 2011. Its modern design enabled it to generate electricity cheaply, efficiently and with lower carbon emissions.

Its financial failure was blamed on outages resulting from construction and design problems, but it was also under pressure from falling gas prices – a result of the shale gas boom in the US – that made the plant uneconomical. Meanwhile, the World Bank this year agreed to a new energy strategy that will limit financing of coal-fired power plants to “rare circumstances”. The bank will restrict financial support to countries that have “no feasible alternatives” to coal. It faces a balancing act between environmental efforts and the energy needs of poor countries, but the change is a signal that it wants to encourage nations to move to green energy generation.

Policies on fossil fuel vary across Europe.

In Britain, no new coal-fired plants can be built unless they capture and store carbon emissions. Germany is also likely to build few, if any, new coal power stations from 2015 because of weak wholesale electricity prices, falling demand, environmental opposition and subsidies for renewables.

Spain, meanwhile, is likely to increase its dependence on coal and gas because the government is cutting subsidies for renewable power generation to cut costs. The country leads Europe’s big economies in renewable capacity, with 30.8 per cent of its power generation mix from wind and solar. The reforms, which include cuts to subsidies for renewables and a tax on generation that hit green power particularly hard, have sent investment in the sector plummeting.

Analysts say the latest cuts in renewables will boost Spain’s dependency on fossil fuels, mostly coal – the only fossil fuel of which Spain has major domestic reserves. The measures could boost expensive natural gas imports as well.

Meanwhile, Poland is resorting to cheap domestic lignite coal to secure its energy supply. The eastern European country already relies on coal to produce more than 90 per cent of its electricity. Its choice of fuel now could lock in its energy mix for decades to come, given that Poland needs to build new power stations to replace ageing ones and to cope with growing power demand.

The government and power companies favour domestic lignite reserves to meet the country’s energy needs and reduce imports of Russian gas. Poland had wanted to become Europe’s main producer of shale gas, but that plan was thwarted when estimates of its shale gas reserves were slashed by more than 90 per cent.

* David Crossland