My good friend Walt Patterson has just written (and self-published) a new book. I really enjoyed it – and happily endorsed it:

“This is a wonderful, provocative and enlightening book. After more than 50 years working in the ‘energy economy’, Walt Patterson has come up with a compelling new story. Sweeping back over the whole history of humankind’s use of energy, he reveals our day-to-day lives through a different lens, changing the language to help us focus on the differences between fire-fed forms of energy (from coal, oil, gas and even nuclear) and fire-free electricity from the sun and other renewables. In urging us to stop ‘feeding the fire’ he maps out what is in essence ‘the most fundamental transformation’ of the way we live on Earth. A revolution, in effect, as we move from the Fire Economy to the Electric Economy.”

It’s available via the following links:
UK (Kindle £3) (paperback £5)
US (Kindle $5) (paperback $7.50) (pdf) ($5)

The truth is that we just don’t think about our energy systems logically. After at least a couple of hundred years burning stuff (primarily coal, oil and gas), most politicians today literally can’t think how the world might work without going on burning stuff.

Walt Patterson speculates that a ‘big shift’ on that score is actually more likely than we might imagine, despite all the vested, hydrocarbon-based interests that are already fighting for their lives. And coal is the battleground where this is now playing out in front of our eyes.

Even a few years ago, there were very few people who thought that we would see coal use plateau any time soon. And that was primarily because of the phenomenal growth in countries like India, China, Indonesia and so on. But there are many commentators today who are already detecting ‘the beginning of the end for coal’, even if it may take a while yet to get to that end point.

1. More coal plants in the USA closed down in 2014 than in any previous year. This was partly because of temporarily cheap unconventional gas (fracking), but also because of the Environmental Protection Agency’s much tougher regulations around pollution and health issues. Obama’s Clean Power Plan is beginning to bite, and ever-cheaper renewables are becoming the alternative choice.
2. Coal use in China is expected to rise for another decade, but then level off and start coming down. Last year, as it happens, coal use declined by 1.6%, even as its economy grew by more than 7%. And more renewables came on stream last year than new coal.
3. Here in the UK, coal is likely to drop out of the supply mix at an accelerating pace. Our ‘carbon floor price’ has just risen from £9.55 a tonne to £18.08, on top of the EU ETS price of around £4 a tonne. Most analysts believe that this will start to accelerate another switch from coal to gas.
4. Back in March, a report from an organisation called CoalSwarm found that hundreds of coal plant projects around the world have either been cancelled or temporarily shelved – with two plants being set aside for every one completed.
5. The coal industry in India is in particular trouble, where projects shelved or cancelled outnumber completions by six to one. Prime Minister Modi is still pretty keen on coal, it has to be said, but he’s also passionate about solar power. Everyone predicts huge growth in new large-scale solar developments, both off-grid and on-grid.
6. All around the world, coal companies are finding it harder and harder to access low-cost capital, with potential investors much more mindful of all the risks associated with higher prices coming in on carbon, if not (as yet) on the likelihood of coal plants becoming stranded assets over the next couple of decades.

This investor angle is particularly well-covered in another new book called ‘Coal Wars’, by Richard Martin.