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Take coal and achieve neutrality

The coal industry must adapt in the fight against climate change in Russia and the world

Russia, whose economy plans to reach carbon neutrality by 2060, will not radically abandon coal generation, it was said on the sidelines of the Russian Energy Week (REW) held on October 13-15 in Moscow. Nevertheless, the share of coal in the country's energy balance will decline, and some coal-mining regions already need to stimulate the creation of jobs not related to fuel extraction. In turn, coal miners are particularly concerned about unnecessary regulatory measures that the government may resort to in order to reduce its carbon footprint.

Take coal and achieve neutrality
Special project Coal of the East of Russia

In recent years, the concept of an energy transition has been gaining momentum in the world, aimed at the gradual displacement of fossil energy resources, primarily coal. Taking into account the new climate agenda, the Energy Strategy of the Russian Federation, approved last year, will be updated.

Coal generation facilities in Russia generate about 140 billion kWh of electricity annually. By 2030, the volume of generation may decrease to 136 billion kWh. At the same time, energy consumption will continue to grow in the country, which should be provided by facilities with a low carbon footprint (hydroelectric power plants, nuclear power plants, solar and wind energy). How the coal miners should be in this regard was discussed at the thematic session “The future of coal energy in the era of the struggle for climate: an end or a new beginning?”, Held within the framework of the REW.


Coal generation diagnosed

According to the plans of the Ministry of Energy, Russia is going to introduce low-carbon certificates, which should stimulate the production of renewable energy. Its suppliers will receive additional profits, and consumer companies will have a green image that will strengthen their market positions. According to the ministry, the volume of such energy within the certification system will exceed 2050 billion kWh by 400.

With regard to thermal coal, as said by the Deputy Minister of Energy of the Russian Federation Pavel Snikkars, its consumption is based on a rather conservative scenario. “We have considered for ourselves a step-by-step evolutionary conclusion of coal-fired generation. This is not some kind of harsh action, in no case is it a ban, ”the official assured. “We do not yet see in the near future, if we talk about the period from 2024 to 2035, Russia's energy balance without coal generation. Today it is not so high in our country - about 12,5-13%, ”he added.

In the future, this percentage will go down. According to the deputy head of the Ministry of Energy, if there are no significant shifts in terms of modernizing power plants to capture CO2, involving ash and slag waste into circulation, then the share of coal generation in the Russian Federation by 2050 will be 4,5%. At the same time, energy consumption by this time will increase to about 1,5 trillion kWh annually (in 2019 it amounted to 1,075 trillion kWh).

The head of the Kemerovo region, Sergei Tsivilev, did not agree with this forecast. “I think the figures given by the Ministry of Energy can still be argued with. I see much more prospects for the coal industry and especially the coal industry in Russia, ”he said.

At the same time, the governor does not object to the development of renewable energy sources. “Let each country go its own way. If they like to build wind turbines and solar panels, if it suits their population, if they assess the consequences of such decisions - well, thank God, ”said Mr. Tsivilev.

At the same time, the governor did not fail to speak out about the outbreak of the international energy crisis. According to the governor of Kuzbass, the price of 1 MWh in many European countries has exceeded € 300. Moreover, in Poland it is € 141, since coal generation there reaches 80% of the energy balance. “Approximately € 120 costs MWh, produced from coal, and € 200 for gas. I'm not even talking about renewable energy sources. Why should it be imposed for the cheap generation to leave and the expensive one to come? It will hit people, ”the head of the coal-mining region was indignant.

Michelle Manuc, CEO of the World Coal Association (WCA), also defended the industry. “Within the SDGs (Sustainable Development Goals; UN SDGs, adopted in September 2015, cover a number of global areas, including the fight against climate change - Ed.), There is nothing against coal as such. It is about making energy available, ”said Ms. Manuk. At the same time, she admitted, decarbonization is what society wants, and WCA members will have to reckon with it.


On the second round

Director of the Institute of Coal Chemistry and Chemical Materials Science of the Siberian Branch of the Russian Academy of Sciences Zinfer Ismagilov is convinced that the share of coal in the energy balance of Russia will remain within 10%, subject to the development of advanced technologies. This concerns the preparation of coal, its combustion, processing (according to an expert, for example, in China, over 100 million tons of raw coal are processed annually into various useful products), but the main thing is the gasification of solid fuel to produce hydrogen. So far, there is no such production in Russia, although it is considered economically profitable.

“At the same time, we need to improve the efficiency when using coal. The higher it is, the lower the CO2 emissions. From here there will be more chances for coal to go into the economy, ”explained Zinfer Ismagilov.

In order to reduce greenhouse gases, it is necessary to actively introduce the economic turnover of ash and slag waste, continued Irina Zolotova, director of the center for industry research and consulting of the Financial University under the government of the Russian Federation. For example, in India more than 60% of ash and slag are utilized, they are mainly used for the production of building materials.

In addition, quite competitive production of alumina can be established from the waste of coal combustion, Ms. Zolotova said. In 2019, Russia became the third country in the world in the production of aluminum (3,6 million tons), while the needs of the aluminum industry for raw materials are far from being covered by domestic production. The technology for extracting alumina from ash and slag would reduce the import dependence of the Russian Federation.

Stepan Solzhenitsyn, CEO of SUEK, shared his own experience in diversifying production. In the Krasnoyarsk Territory, by semi-coking coal, the company established the production of smokeless fuel briquettes, which quickly began to conquer the local market. According to the manager, it is due to market mechanisms that, in the context of the current climate agenda, requests to energy companies and their suppliers should be formed.

“We understand that we are not working with a consumption regulator, we are dealing with people in the real market, and this is much more interesting and correct. When we know that this product is in demand for them, the support on which everything stands is much better. Therefore, there is no need to predict what is the share of coal in the fuel and energy balance. Not only because forecasting is a thankless task, but because this choice should not be in the hands of us, as suppliers, and not of the regulator or official, but the consumer, who should be given the best opportunity to achieve its goal - be it decarbonization or the use of such products ", - says Stepan Solzhenitsyn.


Asia will help us

While the future of domestic coal consumption raises certain concerns, coal miners seem to be more confident about export supplies. According to the CEO of SUEK, advanced technologies were introduced in Western developed countries 20-30 years ago, which significantly reduce air pollution. Today, they are being actively developed by China and India, where the industry, even in the context of the concept of a low carbon footprint, is not yet going to abandon coal.

It is worth mentioning that on the sidelines of the Russian Energy Week a memorandum on cooperation in the supply of coking coal was signed with the Indian side. The agreement is aimed at increasing sales of Russian raw materials for metallurgy to 40 million tons annually. For comparison, now about 8 million tons of all types of coal are supplied to India from the Russian Federation.

Recently, Russian coal has been strengthening its positions in premium and growing Asian markets. It was the countries of the Asia-Pacific region that supported a number of domestic exporters during a decline in production due to a pandemic and a worsening situation in European countries. In 2020, coal production in Russia compared to 2019 fell by 40 million tons - to 401 million tons, while exports, which reached 195 million tons, increased slightly - by 0,9%. Nevertheless, last year's decline in supplies to the west was offset by growth in the east: export coal was shipped through the Pacific ports adjacent to the Far Eastern Railway by almost 6% more than a year earlier.

The positive dynamics continues. For 9 months of 2021, 71,4 million tons of export coal were sent to the stevedores of the Far East by rail, which is almost 3% more than last year's result. The eastern direction accounts for more than half of coal exports loaded on the Russian Railways network to the seaports of Russia (in January-September, its volume amounted to 137,3 million tons).

The fact that Asian countries are not considering abandoning Russian coal, says Anatoly Yanovsky, assistant to the head of the presidential administration. As an example, he cited the Eastern Mining Company, which is developing the Solntsevsky open-pit mine on Sakhalin. To increase export deliveries from it, which in large volumes go to Japan, VGK is building a 22-kilometer belt conveyor from the field to the port of Shakhtersk. “Obviously, the investor of the project, investing a lot of money, probably calculated his future. And it is obvious that the people who work at this enterprise will have jobs in the future, at least for the payback period of this conveyor, ”said Mr. Yanovsky.

However, the situation is not the same in all Russian coal-mining regions. The same Kemerovo region, where a large number of mines and open-pit mines are concentrated, has accumulated significant environmental damage. “The government is thinking about this, and there is an order from the President of the Russian Federation to find ways to stimulate the creation of new jobs in Kuzbass that are not directly related to coal mining. To what extent will the program be implemented is the second question. Sergei Evgenievich (Tsivilev - Ed.) And I are supporters of making such jobs useful and realistic, and not inventing something that is unusual for miners, "summed up Anatoly Yanovsky.

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