The United States of America is not only the sole superpower the world now has. It is also a bellwether for many sectors and segments. For instance, global oil prices depend on how much crude oil US purchases or produces. Oil prices go up if its oil stocks deplete and vice versa.
Global coal prices have fallen from the peak of $139 per metric tonne to below $50/MT in recent times. Though the prices are now hovering over $81/MT, coal mining industry has not yet come out of the woods, thanks to low prices.
Companies like Hyderabad-based GVK group which wanted to make it big on the global coal mining landscape are facing an uphill task. Relatively new to the capital-intensive coal mining, GVK planned in 2011 to develop three massive mines in Australia with $10 billion. However, the projects came to a standstill, owing to low coal prices.
But is there any link between the developments in the US market and global coal prices? It appears so, going by the data that energy regulator Federal Energy Regulatory Commission has dished out of late. In 2016, the US added more power generating capacity in renewable energy than in natural gas, nuclear, oil and coal segments put together.
In renewable energy segment comprising solar, wind, hydropower, etc., it added new capacity of 16,124 MW which accounted for over 61 per cent of the total capacity installed in 2016. Compare this with new capacity addition from traditional sources.
Natural gas accounted for 8,689 MW followed by nuclear power (1,270 MW) and oil (58 MW). Newly-installed capacity from coal was the lowest at 45 MW, indicating which way the wind is blowing. It is second consecutive year that renewable energy has outpaced the one from fossil fuels in the world’s largest economy. In 2015, it added 12,400 MW capacity from renewable sources, about 64.8 per cent of the total.
That’s a great trend indeed. Fossil fuels such as coal, petrol and gas are considered as the dirtiest of the fuels. It is said that they accounted for the lion share of greenhouse gas emissions that damaged environment in the last 250 years. Coal is predominantly used for thermal power generation.
As the use of clean energy increases, world’s dependency on coal for the much-needed electricity will go down. That’s what is currently happening in the US. The day is not far off when India will also see a similar trend. Recent developments in India’s solar energy sector paint a rosy picture.
Solar power tariff fell to a historic low of Rs 2.44 per unit earlier this year from Rs 13 in 2010. This is much lower than the average cost of thermal power that hovers over Rs 3.25 per unit. Fall in solar energy cost is largely attributed to advancements in technology.
So, technology is doing what hardcore environmentalists could not for long. That’s the power of technology and shift towards greener energy seems to be faster now than many thought a few years ago. Green energy is on the rise!