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Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With standard forecasts for 2040 suggesting the stagnation or decline of coal, and the slow expansion of nuclear, gas appears well-placed to come out ahead. But this picture varies significantly by geography, Al-Attiyah Foundation noted in its latest energy research report.
 
The Foundation’s research note, which explores how gas, coal and nuclear power compete for global electricity generation, observed technological advances could bring coal and/or nuclear forward.
 
The typical predictions for the global power sector see gas growing strongly, nuclear slowly and coal flat-lining or shrinking. Scenarios of strong climate action do not help nuclear much, are negative for coal and somewhat negative for gas. A strong nuclear revival is likely to be dependent on the deployment of new reactor designs; continuing major coal growth would require large-scale, low cost carbon capture and storage (CCS). Neither of these possibilities can be ruled out, but they do not appear very likely.
 
So, the implications for leading gas exporters such as Qatar include that gas has the opportunity to gain significant market share from ageing coal and nuclear plants if relatively inexpensive. Conversely, if gas is priced expensively, it will encourage countries such as China and India to develop and deploy nuclear and cleaner coal. The emergence of low-cost CCS still probably favours gas more than coal, though it would boost both over nuclear.
 
The research note said leading gas exporters should monitor technological progress on coal CCS and on advanced nuclear, and keep an eye on the regulatory landscape and public opinion concerning nuclear in key growth markets.
 
Overall, the negative outlook for coal and nuclear is quite favourable for gas. Major gas exporters like Qatar can and should gain market share as old coal and nuclear plants in North America and Europe are closed down. At the same time, coal is set to stagnate in the main emerging Asian economies, and nuclear to grow, but not dramatically.
 
However, this line of development does rely on gas being perceived as a secure, relatively affordable and accessible fuel. If gas is price expensively, China, India and other major Asian states will rely more on coal, and are likely to deploy more nuclear power too. To avoid major surprises, leading gas exporters should monitor the technological, regulatory and public opinion landscape for advanced nuclear and coal CCS in the key markets- North America, Europe, China, Russia and India.
Source: The Peninsula


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