Coal dominates plans despite greenhouse angst - Business - Business

INTERNATIONAL power companies are increasingly worried about energy security and greenhouse emission, but still plan to build much of their future on coal, according to PricewaterhouseCoopers' Utilities Global Survey 2006.
The concerns of global companies have changed dramatically over the past two years, with security of supply issues (for fuel) topping the 2006 list of six concerns. Encouragement of renewable energy was second. In 2004, transmission capacity was top of the list, security of supply was second and the encouragement of renewables was not even on the radar.
A year after emissions trading started in Europe as a result of the Kyoto Protocol, the issue of cutting emissions has rocketed up the charts for energy groups. But energy groups see the emissions issue in conjunction with the problem of meeting soaring growth in demand for electricity caused by economic growth and computerisation.
Despite rising concerns about greenhouse emissions, coal is nominated as a major future energy source. When asked which fuels would grow as a proportion of overall generator consumption in the next five years, 48 per cent of respondents said gas, closely followed by coal at 47 per cent.
Hydro power was cited as a growth area by 20 per cent of respondents, nuclear by 19 per cent, and wind — despite rapid growth in recent years — by 17 per cent. Other renewable technologies, including solar, biomass and cogeneration, were tipped as growth areas by 29 per cent of respondents.
The industry believes the move to expand coal generation will be based on a push to develop clean-coal technology. When asked which areas of generation and supply would be most affected by technological developments over the next decade, 47 per cent replied coal generators, 41 per cent energy efficiency measures and 33 per cent each for gas and nuclear power plants.
Forty one per cent of respondents expected renewable sources of energy to make the biggest contribution to cutting greenhouse emissions in the next decade. Coal gasification was nominated by 36 per cent, carbon sequestration 28 per cent, and nuclear 27 per cent.
An emissions trading regime, such as that introduced in Europe as a result of the Kyoto Protocol, is expected to be introduced in other regions, with 88 per cent of North American respondents expecting it to be adopted there despite the Bush Administration's opposition.
Of the European respondents, 53 per cent said the emissions trading scheme had worked as expected. Under the system, carbon prices started at about €8 a tonne and ended the year at €26.
In Australia, uncertainty over future greenhouse measures was cited as the largest disincentive to new investment.