The energy sector has always been a crucial part of the global economy, and coal has played a pivotal role in this narrative, particularly in the face of energy crises throughout historyFebruary 17 witnessed a significant resurgence in coal stocks across China, with companies such as Shanxi Coking Coal, Pingdingshan Tianan Coal Mining, Huaibei Mining, Huayang Co., Shanmei International, Yanzhou Coal, and Shaanxi Coal & Chemical Industry experiencing strong gainsDespite previous downturns, the coal industry emerged resilient, proving that it indeed still holds significant sway.
Throughout history, coal has often been viewed as the "savior" in energy emergenciesHowever, this status is often questioned, especially when compared with the more glamorous renewable energy sources like wind, solar, and nuclear powerEven in juxtaposition with oil and natural gas, which belong to the previous energy era, coal appears to be overshadowed
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It is high time to reassess the genuine worth of coal.
Unlike renewable energy sources, coal is classified as a non-renewable resourceHowever, it would be a gross oversimplification to label it as merely polluting based solely on its originsHistorical pollution attributed to coal was primarily due to inefficient use and poor infrastructure supporting coal combustionThe past perception of coal as a significant polluter fails to recognize the complexities behind its utilization.
China, being a major player in both civil and industrial coal consumption, has faced pollution challenges primarily due to a lack of adequate pollutant control measuresThe domestic use of coal for heating in households was found to be considerably more polluting than that emitted from power plantsThis brings to light that it is not coal that is at fault but rather the manner in which it has been utilized
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Only after 20 to 30 years of effort did the coal industry start to transform its approach towards cleaner production.
The upstream mining and smelting processes have significantly evolvedWith advancements in mechanization and digitalization, the sector saw a marked decrease in the number of personnel required, reducing the fatality rate in coal mining to 0.044 per million tons by 2021, a staggering 94.1% decrease since 2010. In fact, China's intelligent mining technology is now on par with, if not ahead of, international standards.
In terms of pollution directly correlated to coal combustion, a major transformation has occurred particularly in the midstream segment where coal is largely used for electricity generationBy 2021, coal-fired power accounted for over half of the total coal consumption in China—a significant improvement for a nation heavily reliant on domestic coal usage.
China's coal tends to have a higher sulfur content, which necessitates effective combustion technology to mitigate smog formation
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The country's advancements in coal-fired power generation technologies have placed it at the forefront, with over 860 supercritical and ultra-supercritical generators installed, comprising over half of its total capacityIn fact, ultra-supercritical technology has reached a total installed capacity ratio of 26%—demonstrating the efficiency gains achieved.
Key performance indicators for coal-fired power plants include coal consumption per unit of power generated, as well as emission levelsChinese ultra-supercritical generation technology has reached coal consumption figures as low as 264 grams per kilowatt-hour, according to China's Minister of Science and Technology, Wang ZhigangThis places it ahead of previous records held by plants in Denmark and Japan, which have higher coal consumption rates with similar load factors.
In the power generation industry, a reduction of just 10 grams of coal usage can signify a significant leap in technology, suggesting that China is currently several generations ahead of other nations in terms of ultra-supercritical capabilities
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Remarkably, the Shanghai Waigaoqiao Power Plant, ranked as one of the world's best coal-fired plants, has maintained emission levels that are far lower than global averagesThe nitric oxide emissions from the plant hover around 10.55 milligrams per standard cubic meter, while sulfur dioxide and particulate matter levels are measured at 6.39 and 0.67 milligrams, respectively.
By the end of 2021, more than 93% of China's coal-fired power units had reached ultra-low emissions standards, significantly reducing sulfur dioxide and nitrogen oxide emissions compared to figures from 2015. In fact, the total emissions from coal-fired power generation have fallen to less than one-tenth of the national total emissions, putting China's coal power alongside that of natural gas in terms of emission profilesThis stark comparison highlights the strides made in creating a comprehensive clean coal supply system from mining to power generation.
Contrary to common misconceptions, coal is no longer the villain it was once thought to be; rather, it has evolved into a crucial energy source with nearly total integration of clean technologies throughout its supply chain
Given China's energy landscape characterized by "rich in coal, poor in oil and gas,” a transition away from a coal-dominated energy structure is unlikely in the near futureEven in 2021, coal comprised a staggering 56% of total primary energy consumption—indicating its continued significance.
In that same year, coal-fired electricity generation contributed 67.4% of the national power output, while combined wind and solar generation barely reached 11.7%. Thus, despite the rapid advancements in renewable energy sources, it is essential to credit coal for its historical contributions even as China pursues its dual carbon goals.
On the other side of the globe, several European countries saw a surge in coal consumption in 2021, with notable increases of 36.6% in the Netherlands, 30.3% in Spain, 20.5% in France, 17.5% in Germany, and 8.1% in Italy
Previously staunch opponents of coal-fired power, these nations were forced to reassess their energy strategies in light of an energy crisis, ultimately returning to coal as a reliable source amidst uncertainties.
Ling Wen, the former chairman of China Shenhua Energy, famously stated that "coal has past merits and current innocence." Despite active debates around energy sources today, many continue to misunderstand coal's evolving role in the global energy sectorAs policies, investments, and technologies increasingly favor renewable energy sources, coal has faced discrimination despite its significant progress in pollution reduction.
In the pursuit of carbon neutrality, it is imperative not to overlook coal's contributions and instead recognize its transformative journey towards sustainabilityWhile dramatic changes in China's energy landscape are on the horizon, finding equilibrium between old and new energy sources remains a crucial challenge.
As history progresses, coal has re-entered a phase of resurgence, with China's coal consumption seeing a remarkable growth rate of 4.6% in 2021—the strongest in a decade, surpassing 4 billion tons, marking achieving new heights in demand
Such statistics not only illustrate coal's ability to adapt and generate value but also demonstrate its economic potential amid transformations in energy policy.
Furthermore, the business landscape reflects this trend, as companies like China Shenhua achieved record net profits exceeding 50 billion RMB in 2021. Projections for 2022 suggested an extraordinary increase in profits by another 36.6% to 40.6%. This economic narrative underscores that coal remains a fundamental player within the energy mix, still contributing immensely to national GDP.
Moreover, coal enterprises are now diversifying into hydrogen energy, leveraging synergies from byproducts such as coke oven gas—rich in hydrogen contentThe province of Shanxi, known as the largest producer of coke in China, is prioritizing the hydrogen industry as one of its core development sectors
This highlights the strategic pivot within the coal industry, aligning with global energy trends.
Companies like Huayang Co., formerly known as Yangquan Coal Industry, are now integrating both traditional and renewable energy strategies, reflecting a broader industry trend towards innovationNotably, Huayang holds stakes in leading sodium-ion battery manufacturer Zhongke HaiNeng and is investing significantly in the production of mono-crystalline photovoltaic modules.
Coal has proven itself indispensable, profoundly influencing both the industrial landscape and economic contributionsAs a result, its real value must gain wider recognitionCritics have long highlighted two pressing concerns on the world stage: the excess of unsteady currencies and the shortage of reliable energy sources.
The energy crisis has exposed vulnerabilities, including the risks associated with daily essentials like lighting and heating