1. Patrick Carragher Coal Supplies and Clean Coal Technology

2. Global Coal Demand (Thermal) Billion Tonnes 1980 3.0 2002 4.8 2030 (est) 6-7

3. UK Coal Production (Underground) Million Tonnes 1955 211 1983 105 1993 43 2005 10

4. UK Coal Production (Opencast) Million Tonnes 1983 14 1990 15.7 1996 16.6 2003 13.1 2005 10.2 Decline due to presumption against

5. Global Trade Most coal production consumed locally International coal traded in 2003 - 720 mt Two main trading areas: Asia and Europe Two trading types: thermal and coking Main suppliers to international market: Australia Indonesia South Africa

6. Russia/Poland Columbia/Venezuela

7. 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

8. UK Market 20012002200320042005 Electricity Generation50.947.752.550.552.2 Domestic2.92.21.61.71.3 Industry1.52.21.62.12.0 Coking7.96.56.66.46.6 Total64.258.762.360.762.1

9. UK steam imports since 1999: mt

10. Imports by supplier (%)

11. 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?

12. 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

13. Imports vs UK output: mt

14. 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

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

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

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

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

19. 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

20. Current Projects IGCC and ASC Power Fuel Hatfield - 800 MW Killingholme E.ON - 1000 MW Progressive Energy - Teeside (EOR?) - 800MW Progressive Energy - Valleys Project 450 MW

21. Supercritical RWE Tilbury - 1000 MW E.ON Kings North - 2X800 MW Scottish and Southern - Ferrybridge - 500 MW

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

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