Patrick Carragher Coal Supplies and Clean Coal Technology

Global Coal Demand (Thermal) Billion Tonnes (est) 6-7

UK Coal Production (Underground) Million Tonnes

UK Coal Production (Opencast) Million Tonnes Decline due to presumption against

Global Trade Most coal production consumed locally International coal traded in mt Two main trading areas: Asia and Europe Two trading types: thermal and coking Main suppliers to international market: Australia Indonesia South Africa

Russia/Poland Columbia/Venezuela

Principal Suppliers to Europe Russia Australia Poland South Africa Incremental production in Columbia will be taken by USA Incremental production in Indonesia (and some extent Australia) will be taken by China/Pacific Rim

UK Market Electricity Generation Domestic Industry Coking Total

UK steam imports since 1999: mt

Imports by supplier (%)

Can deep-mined coal compete? Costs = £1.41/GJ now, have been as low as the £1.20s and as high as the £1.50s Delivered prices are £1.80-ish and UKC’s received price is £1.39/GJ Quality is poor compared to imports (Sulphur) A $2.00 Pound, or an import price collapse will spell trouble for the UK production Would the generators stay with the indigenous for security?

Is there room at the ports? Mainly handling sized<0.5Ellesmere Port Certainly more if needed41-44Total Aberthaw, Didcot and Rugeley6.5Bristol/Avonmouth Aberthaw, Uskmouth or Midlands<1.0Newport Aberthaw or Didcot1.0Port Talbot Only Fiddlers and Rugeley3.5Liverpool Serving Longannet, Kilroot & England6.0Hunterston Serving Cockenzie and Longannet1.0Forth (Rosyth) Best for Alcan, Aire Valley interest1.5Tyne/Blyth Serving Aire Valley, down from 1.5mt1.0Tees Serving Aire Valley, could expand2.0Hull Serving Aire and Trent Valleys12-15Immingham Only serving Kingsnorth and Tilbury>5.0Thamesside (power stations) Comments/stationsmt/yrPort

Imports vs UK output: mt

Imports: Conclusions International market likely to remain tight Russia to remain main UK supplier provided high price No guarantee for indigenous UK coal production But indigenous important bulwark against international supplied/price volatility Opencast particularly vulnerable

Clean Coal Existing fleet 40 years old Pulverised fuel (pf technology) Environmental concerns of 1980s early 1990s acid rain Hence Large Ccombustion Plant Directive

Late ‘90s Environmental Focus on Carbon EU Emissions Trading Scheme National allocation plan Current fleet 29 GW (opted in) 20.5 GW

Opted in plant can run to 2016 possibly 2020 Opted out plant must close by 2015

New Technologies IGCC and Advanced Supercritical (ASC) Increase thermal efficiency Prospect of further development

Clean Coal Task Group Reported in June and recommended retention of current generating capacity with new Clean Coal Technologies However, Government assistance necessary on number of levels Price of carbon critical Market certainty for investment critical

Current Projects IGCC and ASC Power Fuel Hatfield MW Killingholme E.ON MW Progressive Energy - Teeside (EOR?) - 800MW Progressive Energy - Valleys Project 450 MW

Supercritical RWE Tilbury MW E.ON Kings North - 2X800 MW Scottish and Southern - Ferrybridge MW

Carbon Capture and Storage All the above projects are CCS adaptable Peterhead (gas) EOR project Infrastructure essential for CCS New financial instruments

Conclusions Much progress made More to be done Government and EU support essential