This article originally appeared in the Edmonton Journal.
By Jerome Gessaroli, November 30, 2023
Despite global concerns over greenhouse gas emissions and climate change, some Asian countries, among them China and India, are continuing to build new coal power plants at a rapid pace. Globally, over 1,000 new coal-fired power plants have been announced, permitted, or are under construction, with 90 per cent of these located in Asia.
These new power plants alone are expected to emit over 1,400 megatonnes (Mt) of GHGs annually. To put this figure into perspective, Canada must reduce its domestic emissions by approximately 310 Mt to meet its 2030 target.
Moreover, the average age of existing coal-fired power plants in Asia is only 13 years old, less than half the lifespan of a typical plant (coal-fired plants can operate for 30 to 40 years). It will be difficult to decommission these plants right away as an estimated $1 trillion is already invested in the sector. Investors, many of them politically connected, are not especially keen to see these investments fail. While Asian countries have made “national pledges” to build more renewable energy sources in the future, coal will realistically be used for many years to come.
As inconvenient as they may be, these are the facts at hand. Canada has little to no leverage to influence these countries to nix their existing and planned coal plants. However, we can play a substantial role in reducing the emissions these plants produce — all while helping our own bottom line and expediting progress toward meeting our emissions reduction targets.
Canada, of course, possesses abundant natural gas resources. When used as a fuel source, natural gas emits significantly less carbon than coal. The positive news is that coal-fired power plants can be converted to use natural gas; in fact, many are already being converted. Liquefied natural gas can reduce GHG emissions by 34-62 per cent compared to coal, depending on the application and LNG source. Planned LNG projects for British Columbia are also designed to produce LNG with the lowest levels of carbon emissions, compared to other major LNG sites globally.
Moreover, LNG-fuelled power plants are flexible and can quickly respond to changing energy demands. This makes them excellent at generating dispatchable power, which is needed to back up wind and solar power during periods of adverse weather (i.e. low winds or sunlight). Dispatchable power will become increasingly important as more of the world’s energy is generated from intermittent renewable power sources.
Between 2005 and 2019, the United States converted over 100 coal-fired power plants to natural gas, reducing GHG emissions by 530 Mt in the process. This transition did not stop the U.S. from investing billions of dollars in solar, wind and other renewable power sources. Asia should be able to follow the same path of converting coal-fired plants to LNG while simultaneously pursuing renewable energy.
Opponents of Canadian LNG exports warn that developing LNG will produce excess GHGs and push B.C. off pace to meet its emissions reductions targets. However, this neglects the bigger picture. If B.C. liquefies one billion cubic feet per day of natural gas, it will increase its national GHG footprint by about 1.2 Mt per year. Exporting the same amount of LNG as a coal fuel substitute to Asia will lower global emissions between 14 to 35 Mt per year. B.C. can offset the extra domestic emissions by negotiating carbon credits as part of the LNG sales, as is allowed under the Paris Accord.
Critics also argue that exporting LNG “locks in” fossil fuel usage for the long term. They are correct, but only to an extent. Given the reality that many Asian coal-fired power plants are still relatively new, fossil fuel usage has already been “locked in” for the foreseeable future.
Finally, critics claim that LNG is only a short-term opportunity as countries are primed to rapidly transition to renewables after 2030. While no one can forecast future demand with absolute certainty, industry analysts forecast a robust global market for LNG, especially in Asia. The International Energy Agency wrote in its 2022 gas market outlook that “even with flat or declining natural gas demand … new investments in upstream gas supply remain necessary … to offset declines from existing fields.”
The challenges of curbing coal usage in Asia are substantial. Expecting a wholesale decommissioning of relatively new coal-fired plants, while simultaneously replacing power generation with renewables, is not realistic. A more feasible strategy lies in switching from coal to LNG to lower the level of carbon emitted while Asia more fully builds out its renewable energy sources.
Jerome Gessaroli is a senior fellow at the Macdonald-Laurier Institute and leads The Sound Economic Policy Project at the British Columbia Institute of Technology.
