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Coal and solar power executives clash at Paris climate conference

Tony Hayward, chairman of mining company Glencore, has clashed with wind and solar power executives who say renewable energy can replace coal in industrialising countries such as India and China.

Mr Hayward, whose company is the world’s largest exporter of power station coal, told a business and climate change meeting in Paris that people had to recognise it was simply “not possible” to remove coal from the energy mix in countries such as India.

“With the best will in the world, solar is not an answer to broad scale industrialisation,” he said, adding it was too intermittent to supply the steady, reliable power needed by an aluminium plant or a steel mill.

“Unless we can deal with this dilemma this debate goes nowhere,” he said.

His remarks prompted a sharp response from Kerry Adler, chief executive of North American solar group SkyPower who told him: “Solar is the new world. You’ve got to get used to it.”

Mr Adler said as renewable power storage costs fell, companies like his could easily supply large amounts of cheap, reliable power in countries such as India.

He was backed by José Manuel Entrecanales Domecq, chief executive of Spain’s Acciona group, a large wind power developer, who said it was “absolutely” possible for renewables to provide baseload electricity in emerging markets if electricity grids were properly integrated.

The Paris business meeting comes six months before the French capital hosts a UN conference where almost 200 countries are due to seal a global climate change pact.

The leaders of Germany and France said earlier this week they wanted to see a complete end to emissions from fossil fuels such as coal some time this century.

Oil and gas companies such as Norway’s Statoil say the first step should be switching from coal power to cleaner-burning gas.

But Mr Hayward said this was not possible in countries such as India, where a government official had recently told him that gas cost at least three times as much as coal and was more complicated to secure.

Coal companies, on the other hand, had told this official that with their fuel, “you can have it tomorrow and you can have as much as you want for as long as you want”, Mr Hayward said.

The answer, he said, was for wealthier countries to help industrialising nations replace old, more polluting coal power station technology with newer, cleaner systems.

Without such steps, the world would never achieve the reduction in emissions needed.

“Unless what we deploy allows China and India to complete their industrialisation in a different way to the way we industrialised then we are simply shifting the deck chairs on the Titanic,” he said.

Many executives at the Paris business meeting urged governments to introduce more carbon pricing systems, such as a carbon tax or emissions trading schemes.

World Bank climate envoy, Rachel Kyte, said China was looking at creating a national emissions trading system as early as 2016, which would overnight create the world’s biggest carbon market.

It would be “very interesting” to see how other countries reacted with China if this happened, she said.

But Mr Hayward said before talking about new carbon taxes, it would be sensible to end fossil fuel subsidies.

He added that efforts to put a price on carbon through schemes such as the EU’s emissions trading system had created a lot of problems.

The European system had helped to create the “mess” of a “dysfunctional” energy market and a “massive misallocation” of resources, he said.

The best means of changing people’s behaviour was to look at levies such as gasoline taxes which had a direct impact on the use of transport fuel.

source: http://www.ft.com