Global Push To Dump Coal As Energy Transitions To Gas, Renewable

Global Push To Dump Coal As Energy Transitions To Gas, Renewable

Engie, a French mega company that generates and distributes electricity around the world including coal-powered, has pulled out of bidding to build a new 1,000-megawatt coal-fired power plant in South Africa citing concerns over supporting new coal generation, according to a report in RenewEconomy.

Engie recently opened a new wind farm in South Africa and is leading a consortium in building the Kathu solar park, a 100-megawatt solar plant in South Africa.

Known as GDF Suez prior to April 2015, Engie is one of Europe’s major gas companies. It also owns plants ranging from coal to nuclear and increasingly solar, hydro and wind. Hazelwood, a coal generator in Victoria, Australia, is owned by Engie. Hazelwood coal supplies up to a quarter of Victoria’s electricity and more than 5 percent of Australia’s total energy.

Earlier this month at the World Gas Conference in Paris, Engie CEO Gerard Mestrallet forecast the decline of centralized fossil fuel generation and indicated a big push against coal-fired generation, RenewEconomy reports.

Europe’s major gas companies are calling for a switch from coal to gas, and for a hefty carbon price to be imposed to hasten the transition, the report said.

No official reason was given for Engie’s withdrawal from the South African coal-plant. A report in finance journal IJGlobal said Engie was “purely exiting due to new concerns over supporting new coal generation.”

Coal dominates South Africa’s indigenous energy resource base, accounting for about 77 percent of South Africa’s primary energy needs, according to South Africa’s Department of Energy. Internationally, coal is the most widely used primary fuel, accounting for about 36 percent of total fuel consumption of the world’s electricity production, South Africa asserts.

South Africa claims to be the world’s fourth-largest coal-exporting country, with 28 percent of production going to exports. “This is unlikely to change significantly in the next two decades owing to the relative lack of suitable alternatives to coal as an energy source,” says South Africa’s Department of Energy.

Five companies in South Africa account for 85 percent of saleable coal production including Ingwe (a BHP Billiton subsidiary); Anglo Coal; Sasol;
Eyesizwe; and Kumba Resources.

However, South Africa is also making a push in renewable energy. In 2012 South Africa recorded the world’s highest growth in renewable energy investment with $5.7 billion invested, according to the U.N. Environment Program, CNN reported.

“The spectacular surge, led largely by investments in solar power projects, comes as South Africa moves to reduce its dependency on coal,” the CNN report said.

“Technical progress is powering an energy transition that is not just European, but global,” Engie COO Isabelle Kocher said at the World Gas Conference.

At the World Gas Conference, Mestrallet talked about quitting the coal industry in Europe, according to RenewEconomy. “The choice we have made is very clear. We have stopped investing …. in thermal power generation in Europe and we are investing in renewables.”

Engie’s Hazelwood coal power station is the third-dirtiest in the world, with a carbon intensity of 1.4 tonnes per megawatt hour, RenewEconomy reports. The Victoria government is coming under pressure to close it. A mine fire in 2014 hurt the community and cost the company hundreds of millions of dollars.

There is no doubt about the pace of the energy transition across the world, Mestrallet told analysts earlier this year, RenewEconomy reports. “It is really a global trend. It is an irreversible movement pushed by the technology, at the same time through the digital revolution and also the renewable revolutions in technologies for wind, for solar, for heat and miniaturisation of the equipments.”