COal IN climate change in CONTEXT
In any context, and especially with regard to climate change, it's important to distinguish between thermal coal, used to create direct heat for industry, warmth, or electricity production, and metallurgical coal, typically higher grade, bituminous coal, for manufacturing metal - for example, steel.
New Zealand's three biggest users of coal are Fonterra, New Zealand Steel, and Genesis Energy. Coal is used alongside gas in electricity generation, and to create industrial process heat. Both of these are comparatively small components of New Zealand's emissions profile.
New Zealand's three biggest users of coal are Fonterra, New Zealand Steel, and Genesis Energy. Coal is used alongside gas in electricity generation, and to create industrial process heat. Both of these are comparatively small components of New Zealand's emissions profile.
*Sourced from Interim Climate Change Committee 2019 report: Accelerated electrification
Electricity in new zealand
For electricity generation, most of New Zealand's supply comes from renewable sources, predominantly hydro power. In 2018 83% of national electricity generation came from renewable sources. Coal's contribution accounted for 1.78%. This contribution while small was crucial. New Zealand's last coal fired power plant is Genesis Energy's Huntly Power Station, which provdes peak load electricity generation. In mornings, evenings, and winter months, when showers, toasters, hot water jugs, microwaves, and heaters put major stress on the nation's grid. Coal and gas are crucial for addressing this surge in demand by firing up when needed, then going on the back burner or shutting down when demand drops. A problem with renewable sources like hydro, wind, and solar energy, is their energy is a case of "use it or lose it", and until hydrogen and battery storage technology improves, there will be a need for peak load supply - like coal and gas - that can provide electricity on demand.
*Sourced from Interim Climate Change Committee 2019 report: Accelerated electrification
FEEDING OURSELVES AND PAYING OUR WAY
Thermal coal is crucial to much of what New Zealand eats at home and earns abroad. Coal dries our milk, and provides steam to our dairy factories, freezing works, and fish processors. It powers the radiators that heat greenhouses for vegetables like tomatoes, cucumbers, capsicums, eggplants, and lettuce, and dries hops for beer.
Coal heats many of our schools and hospitals, providing warmth in winter thanks to coal fired radiators.
About 60% of New Zealand's process heat is powered by coal, gas, and diesel, with the balance being met by electricity, geothermal energy, and biomass.
Biofuels from wood are an alternative for heating and some industrial processes, but for those who require high temperatures, coal will be the fuel of choice until New Zealand goes through a massive electrification of industry with renewable energy feeding a grid that will face significantly increased demand. Right now, electricity is 150% greater than the cost of coal.
In 2018 Transpower reported that if electricity is to displace fossil fuels, demand will more than double by 2050.
*Sourced from Te Mauri Hiko, Energy Futures, a 2018 report from Transpower looking at the future of NZ energy demands
New Zealand is an importer of thermal coal, showing our demand outstrips our supply. If we stopped mining today, there'd be power cuts in dry years, our exports would no longer be competitive abroad, our supermarkets would find cheap imports of food more profitable than domestic produce, and some students and patients may find classes and wards cold in the winter.
Time, technology, and already falling prices will make alternatives more viable, but for now, we need thermal coal.
WHAT'S COKING?
IF YOU WANT steel, YOU NEED COAL
Steel is a staple of modern society. Trains. Tractors. Turbines. Teaspoons.
The earliest known production of steel was about 4,000 years ago to make weapons. Nowadays, high grade bituminous coal - found nowhere else in New Zealand but the West Coast - is baked at high temperatures in the absence of oxygen to produce coke. Coking coal's role in producing pig iron and in turn steel is for now indispensable. It reduces iron ore and iron oxide to pure iron. Prior to coal, charcoal made from plant matter was used. The amount of timber required to produce the steel we need today would be hard to come by. Any supply of biomass would require trees being replaced faster than they were being consumed.
Recycled steel is produced with electricity in electric arc furnaces. The rate of recycling for steel is high compared to other materials. About 86% of scrap steel is recycled, and electric arc furnace production accounts for about a quarter of of total global steel production each year, though figures vary year to year. This of course relies on a clean supply of electricity to have any impact reducing carbon emissions. The steel industry in 2017 accounted for about 7%-9% of global direct emissions from the use of fossil fuel.
It's possible future technology will make coking coal redundant, but no such technology is coming in the foreseeable future.
The earliest known production of steel was about 4,000 years ago to make weapons. Nowadays, high grade bituminous coal - found nowhere else in New Zealand but the West Coast - is baked at high temperatures in the absence of oxygen to produce coke. Coking coal's role in producing pig iron and in turn steel is for now indispensable. It reduces iron ore and iron oxide to pure iron. Prior to coal, charcoal made from plant matter was used. The amount of timber required to produce the steel we need today would be hard to come by. Any supply of biomass would require trees being replaced faster than they were being consumed.
Recycled steel is produced with electricity in electric arc furnaces. The rate of recycling for steel is high compared to other materials. About 86% of scrap steel is recycled, and electric arc furnace production accounts for about a quarter of of total global steel production each year, though figures vary year to year. This of course relies on a clean supply of electricity to have any impact reducing carbon emissions. The steel industry in 2017 accounted for about 7%-9% of global direct emissions from the use of fossil fuel.
It's possible future technology will make coking coal redundant, but no such technology is coming in the foreseeable future.
THANKS TO STEEL...
Until a way is found to produce steel at profit and at scale without coking coal, it's not a question of whether we mine, but where. Coking coal could be sourced from New Zealand. Or Indonesia. Or Mozambique. Or Vietnam. Or Canada. Or Russia. Or the United Sates. Or South Africa. Or Colombia. The list goes on. Were we to stop producing coal for steel production, we would deny ourselves as a country the opportunity to profit from the production of a material we use every day, continue to contribute to mining elsewhere as consumers, and make no difference in carbon emissions from international steel production.
Coal not dug or burnt in New Zealand will be produced and consumed elsewhere, at an opportunity cost to our economy. Stopping the mining of coal in New Zealand would mean massive economic sacrifice for scarce environmental gain, and even detriment if poorer environmental protections in other countries are taken into account.
Until technology eliminates the need for coal both locally and abroad, the arguments against mining it in New Zealand just don't stack up.
Coal not dug or burnt in New Zealand will be produced and consumed elsewhere, at an opportunity cost to our economy. Stopping the mining of coal in New Zealand would mean massive economic sacrifice for scarce environmental gain, and even detriment if poorer environmental protections in other countries are taken into account.
Until technology eliminates the need for coal both locally and abroad, the arguments against mining it in New Zealand just don't stack up.
Contact us
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Minerals West Coast Trust
Manager: Patrick Phelps Phone: 021 238 6846 Email: manager@mwc.org.nz |
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