A Common Ground Approach
When it comes to energy, the question should not be whether we use coal, but how we use it. Society has both a growing need for energy – and a desire to lower emissions. Central to the growing global dialogue around energy and the environment is the need to maintain a reliable, affordable baseload supply of power.
Coal offers a Common Ground approach through the combination of innovation and supportive policies.
A look at world energy shows coal is a vital component of the energy mix; 37 percent of the world’s electricity is fueled by coal, the most of any single fuel type.
Since 1970, coal-based electricity generation in the U.S. has increased about 70 percent, while regulated power plant emissions have decreased 93 percent per megawatt hour.
Given appropriate research and development support and deployment incentives, clean coal technologies have been advanced, yielding a suite of options to dramatically reduce emissions from coal use.
Peabody believes that next-generation carbon capture must be brought to commercial readiness to transition toward energy from coal that is near-zero emissions. While it is clear that achieving a low-carbon future comes at a very high price, that price soars higher if carbon capture is not deployed.
Government studies have shown that the costs of achieving the goals of global climate agreements could more than double without the inclusion of carbon capture, and researchers have stated that excluding carbon capture from the mix increases the median estimated mitigation costs from about 2 percent of GDP annually to 5 percent of GDP.
Investment Principles for Best-in-Class Coal Companies
Recognizing that environmental, social and governance transparency and disclosure is increasingly important to investors, we have advanced Investment Principles to provide portfolio managers, banks and governance committees a means of comparing coal company investments.
Coal is expected to be an essential source of global electricity generation and steelmaking for many decades to come. Today’s clean coal technologies are capable of reducing sulfur dioxide, nitrogen oxides, particulate matter, mercury and other emissions by 90 to 99 percent, enabling substantial improvement in air quality, even as coal use has greatly increased. High-efficiency, low-emissions plants reduce carbon dioxide emission rates by 20 to 30 percent compared to a less efficient plant of the same size. Longer-term investments in next-generation carbon capture, use and storage technologies are necessary to transition to the ultimate goal of near-zero emissions from coal.
With energy being vital to life, and future energy needs heavily reliant on coal, we submit that investors consider the following principles to assess whether their target investment companies meet the vast majority of the following standards consistent with best-in-class coal companies.
Operate safe workplaces, commit to continuous improvement in safety and health practices and performance, and establish safety as a top priority principle.
Maximize resource recovery.
Seek ongoing improvement in environmental performance.
Disclose which mines provide mountaintop-removal-free production.
Commit to restoring mined lands for generations that follow.
Respect human rights and indigenous people who are potentially impacted by mining activities.
Essential for Electricity and Steelmaking
Drive partnerships and policy, and work with stakeholders to recognize coal's essential role in electricity generation and steelmaking.
Engage with government, academia and other stakeholders to address major energy challenges.
Advanced Coal Technologies
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Support greater development and deployment of advanced coal technologies and next-generation carbon capture, use and storage technologies.
Support and drive policies to achieve the goal of near-zero emissions in the world’s next-generation coal-based electricity generation fleet.
Peabody Global Clean Coal Leadership Awards
The fourth annual Peabody Global Clean Coal Leadership Awards recognized innovation in clean coal technologies among leading examples of coal-fueled generating plants, with winners from the U.S., China, Japan and India.
Dynegy's Duck Creek Power Station: Honored for SO2 Leadership and Performance. The 425-megawatt Duck Creek plant operates in Canton, Ill., and virtually eliminated SO2 emissions. The SO2 achievement is attributed to the wet flue-gas desulfurization technology paired with low-sulfur Powder River Basin coal.
Shenergy Company Limited’s Shanghai Waigaoqiao No. 3 Power Generation Co., LTD: Honored for NOx Leadership and Performance and Heat Rate Leadership and Performance. The 2,000-megawatt (two units x 1,000 megawatt) Waigaoqiao No. 3 Power Generation plant located in Shanghai has one of the lowest global NOx emissions profiles at 0.11 pounds per megawatt hour. The power plant’s heat rate of 8,141 Btu per kilowatt hour is among the best in the world.
Waigaoqiao No. 3 was designed to achieve high-efficiency operation and the plant’s operators have made retrofit improvements to further boost the annual average net efficiency to as high as 44.5 percent, lower heating value (LHV).
Kyushu Electric Power Company Inc.’s Matsuura Power Station No. 2: Honored for New Coal Plant Leadership and Innovation. The 1,000-megawatt ultrasupercritical plant located in Matsuura, Japan, is currently under construction and expected to come on line in 2019. It is designed to have an efficiency of over 45 percent, LHV, which will make it one of the most efficient coal-fueled power plants in the world, reducing CO2 and regulated emissions.
U.S. Department of Energy’s National Carbon Capture Center, managed and operated by Southern Company: Honored as Carbon Capture and Storage Pioneer. The National Carbon Capture Center in Wilsonville, Ala., is a world-class neutral test facility working to advance technologies to reduce greenhouse gas emissions from coal- and natural gas-based power plants. The center works with third-party technology developers to bridge the gap between laboratory research and large-scale demonstrations. In addition, the National Carbon Capture Center chairs the International Test Center Network to accelerate research, development and deployment of carbon capture technologies.
Nabha Power Limited, a wholly owned subsidiary of Larsen & Toubro, was also recognized with an Honorable Mention in the Heat Rate Leadership and Performance category. The 1,400-megawatt power plant in Rajpura, Punjab, is among the most efficient supercritical plants in India, and in 2016 notably achieved its lowest auxiliary power consumption of 5.2 percent at 77 percent plant load. In addition, the plant implemented several environmental controls, including Mitsubishi Advanced Combustion Technology burners for NOX emissions reduction, 100 percent washed coal, a zero-water discharge system and utilization of 100 percent of its dry fly ash on a sustainable basis.