The coal industry has less than five years to prove ‘clean-coal’ technologies are commercially viable or face demand constraints caused by climate change policies, the head of the International Energy Agency has declared.
Speaking after the G20 energy minister’s meeting in Turkey, IEA executive director Fatih Birol said commercialising carbon capture and storage technology was critical for the coal industry, which has accounted for 15 per cent of Australia’s exports throughout the past five years,
“Demand for coal will be depending on whether or not the coal industry will be able to make use of the clean-coal technologies, including carbon capture and storage,” Dr Birol said, as reported by The Australian.
Use of carbon capture and storage (CCS) technology for reducing emissions from coal-fired plants has grown 50 per cent worldwide since 2011. Now 22 CCS projects are operating or under construction in the world, the Global CCS Institute (GCCSI) said in its 2014 report.
He was speaking after the G20 energy ministers’ meeting in Turkey, where he met Australia’s Resources Minister Josh Frydenberg who told him Australia was significantly increasing its use of renewable energy and pursuit of energy efficiency, but this was not mutually exclusive to continuing energy exports, particularly coal and gas.
The IEA predicts worldwide energy demand will grow a third by 2040 and three-quarters of that additional demand will be met by fossil fuels.
Australia is expected to be the biggest exporter of LNG by the end of the decade.
Dr Birol predicted renewable technologies such as hydroelectric power, solar and wind would comprise half of the new power generation capacity added worldwide in the next five years.
While wind and solar were becoming cheaper, and some of the best wind sites were becoming commercially competitive with fossil fuels, Dr Birol said renewables in general would likely still need government subsidies to compete with fossil fuels by 2020, although less than current levels.
While the prospects for the gas industry were strong, it would first have to weather difficult times in the next few years.
He expected low prices could produce a slowdown in investment, but this would be a “temporary situation”.