The “policy bias” against coal is changing as more financiers seek to understand its role in the transition to greener energy sources, says Michelle Manook, CEO of coal lobby group FutureCoal.
Speaking at the launch of the Southern African chapter of FutureCoal in Sandton, Manook, called on the coal industry to push for sensible and inclusive energy policies.
“In the last 18 months, I have had more phone calls from finance investment and insurance sectors, and you would have seen even departures from the net zero alliance by some of the major players. Those discussions are happening with me in the background in a way that is more pragmatic and open to understanding what the role of coal is and what the future of coal is,” she said.
When the Paris Agreement on climate change was signed in 2016, committing signatories to efforts to limit global warming to 1.5°C above pre-industrial levels, there were fears that coal assets, especially coal-fired power stations, could be stranded by 2050. Many financial institutions announced they would stop funding new coal projects.
Manook said, however, that coal assets were not stranded and there was now recognition that energy diversity was important for the energy transition.
“I think there is a recognition that the cost of the transition as it is being proposed is not realistic. We know a lot of statistics support this, including the international panel on climate change. It is now about returning to something that is much more balanced, much more level playing field.”
She said while criticism of coal was based on old technology, China was leading the way by building the world's largest carbon capture storage plant for C02 emissions.
“They are capturing 500,000t of CO2 annually; they have also found a way to reduce the capex [capital expenditure] of carbon capture storage. The reason that is important is when anybody says coal power can't be clean you say 'yes it can be'. Now is our opportunity to build on this momentum and improve the abatement technology. We have the right to put new coal power stations in place that can abate up to 99% of pollutants. We must change the conversation so we can empower the regions.”
With the US in the process of exiting the Paris Agreement and that nation's energy minister calling for the halting of closures of coal-fired power stations, coal was now being looked at through new a prism.
It's not a resource to strand, it is a resource to enhance, and enhance in a way which is important both economically and environmentally
— Michelle Manook, CEO of FutureCoal
“The US is thinking about coal beyond its traditional uses as an opportunity to get a significant number of critical minerals from coal-based ash. They have 400 years of reserves. It's not a resource to strand, it is a resource to enhance, and enhance in a way which is important both economically and environmentally”.
Mike Teke, CEO of coal miner Seriti Resource — who is the inaugural chair of the Southern African chapter of FutureCoal — said they wanted to elevate the debate to a level where South Africa can begin to think of making more investments in coal.
“This business called Seriti, we are not retreating, we are building a new mine. Last week we were blasting at our new mine in Carolina. Seriti is not abandoning coal; South Africa is not abandoning coal. We want to make sure we build a versatile energy mix so that we can be self-reliant as a country, as a region, as a continent.
“Our GDP growth and our ability to grow our economy, create jobs and address youth unemployment ... energy is at the centre of everything
“We need energy to mine lithium and copper. That energy doesn't only come from renewables for baseload; in this country, coal plays an important role.”
He said while coal was regarded as a “dirty” fuel source, it was the main driver of energy generation.
“Why do they say coal is expensive and dirty? When they talk while they are sipping a cup of coffee, and the machine was powered by energy coming from something called coal.”
He said coal must be part of the energy mix in countries where there is an abundance and, if it's used as baseload, technology must be applied to deal with inherent environmental hazards in coal usage.
The Southern African chapter of FutureCoal comprises South Africa, Mozambique, Zimbabwe and Botswana, which hold 150-billion tons of coal reserves, placing them among the world’s top coal-rich regions.
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