MOODY’S Investor Service has called for more investment in carbon capture and storage (CCS) to aid the coal industry, which countries in Africa are showing increasing interest in developing. In a new report, Moody’s urged investors in the US to back the technology or else the country’s coal production would continue a ‘sharp decline’.
For African countries, clean coal technologies are particularly essential in a region which has over 50 billion tons of coal reserves that these countries want to exploit to provide electricity to over 600 million people who currently lack access to it.
According to Anna Zubets-Anderson, Moody’s VP-Senior Analyst, due to the lack of opportunities to use captured carbon dioxide (CO2) in the oil fields, CCS development has not gained momentum in the US.
CCS is a technology that can capture up to 90 per cent of the CO2 emissions produced from burning fossil fuels to generate electricity or industrial heat. ‘However, while many technological barriers to increased deployment of CCS have been lifted, policy support and investment have been lacking,’ Zubets-Anderson said.
Under President Barack Obama, his administration opposed funding power projects in Africa and other countries if they involved the use of coal. But when President Donald Trump came to power last year, he urged multilateral development banks to help developing countries to access coal efficiently and cleanly.
This was welcomed by African countries such as Nigeria and South Africa, which have huge coal reserves. Nigeria in particular has huge challenges in producing electricity for its huge population – even though it is a major oil producing country. The Nigerian government now wants to use the country’s coal to address the situation.
The Trump administration took things further when it announced during the 23rd Conference of the Parties (COP23) to the UN Framework Convention on Climate Change in Bonn last November that the US would be spearheading a Clean Coal Alliance supported by Japan and a number of African countries. African delegates at COP23 were keen to strike deals with the American coal industry for improved energy in their countries in order to achieve economic growth and lift their citizens out of poverty.
Pressure group Electricity for Nigerians is keen to see the Nigerian government take advantage of the Clean Coal Alliance. It said in a tweet last week: ‘Nigeria has the worst electricity supply of any African country, despite enough coal in the ground to provide power for 200+yrs. USA wants to help Nigeria with the Clean Coal Alliance – we must join!’
The CEO of General Electric, Lazarus Angbazo, said recently: ‘A diversified energy mix is really the best energy security policy that any country can have, Nigeria included. It just happens that Nigeria is really blessed with all of the energy resources.’
Coal plays an important role in grid reliability and fuel diversity, and these factors could move to the forefront of policy considerations if its environmental footprint becomes of less concern, according to Moody’s, particularly if there was also a material change in price dynamics between coal and natural gas.
Additionally, a number of energy stakeholders such as the International Energy Agency (IEA) consider CCS essential to achieving the goals of the Paris Agreement on climate change and curbing global warming, because some coal-fired electricity generation will remain in the global fuel mix, Moody’s noted.
Last year, Quartz published an in-depth series looking at carbon-capture technology. After talking to more than 100 experts, its conclusions were the same as Moody’s: with more investment and policy support, CCS could significantly curb emissions from coal use.
In its recent newsletter, Quartz noted: ‘…what perhaps makes CCS more compelling – and it’s not something Moody’s addresses because it’s beyond the scope of their report – is the effect it could have on the environmental impact of industries such as cement, steel, and ethanol. Regardless of where these industries source their energy, they will continue to emit carbon dioxide because of the inherent chemistry of their production. The only way to reduce emissions from these industries is to deploy CCS.’
Climate experts argue that in the case of a Clean Coal Alliance the US should make deploying CCS technology its top priority. This could help countries such as Nigeria and Ghana that have asked the developed world for assistance in gaining access to high-efficiency technologies.