5 Coal production in the UK early in the 21st century
This section examines the UK's coal industry in a little more detail, to see how the complex interplay of location, economics and politics has led to the rapid demise of an industry that was once at the heart of the UK's economy.
Figure 38 shows production and consumption figures for coal mined in the UK since 1945 as a number of categories. The decline in total consumption shows that the demand for coal in the UK fell steadily since 1955.
Which markets, shown on this figure, have contributed to this decline?
Between the early 1950s and 2003, both the coke and domestic coal markets declined markedly. In fact, the quantity of coal used for both fell by over 90%. Since 1990 the quantity used for electricity generation also fell sharply.
Coking coal was used extensively for steel-making: the decline in demand between 1955 and 1980 parallels the decline in the UK's steel industry.(Indeed as the globalization of coal and steel markets grew during this time, EU policies aided the decline of both industries in the UK.) The demand for domestic coal reduced over the same period as gas from the North Sea was offered as a cleaner and more convenient fuel from the early 1970s onwards.
Conversely, the demand for coal in electricity generation (Figure 38) grew, albeit erratically, and peaked in the 1980s. At first glance it appears that coal sales to the electricity generating market more than compensated for the decline in the coking coal and domestic markets. However, the fact that total UK consumption has exceeded UK production since the 1984-5 miners' strike bears witness to a global change in coal economics. The growth in size of bulk-transport ships and of surface-mining equipment resulted in coal being produced where surface mines work thick seams close to the surface, thousands of miles from potential markets: coal ceased to be a high place-value resource. Such coal can be transported to the UK for less cost than producing the UK's own coal from underground mines. The UK has been an importer of coal since 1970, but statistics suggest that the miners' strike triggered an increasing reliance on imports (Figure 38).
In the 1980s and 1990s, the UK's coal producers became progressively dependent on power stations for their survival. However, the lucrative contracts offered to the power companies when the coal industry was privatized in 1994 were insufficient to prevent the UK's electricity generation industry (itself privatized in 1990) from moving away from coal to natural gas. This initiative, at the time dubbed the 'Dash for Gas', was triggered by a change in EU regulations, which for the first time allowed gas to be used to generate electricity. Consequently, the amount of coal used for UK electricity generation dropped from over 84 million tonnes in 1990 to less than 42 million tonnes in 1999. That reduced amount of coal was also increasingly supplied by surface mines in the UK and by imports, rather than by the more expensive underground-mined coal.
Figure 39 illustrates how the demand for coal (and indeed oil) for electricity generation in the UK dropped sharply in favour of gas from 1990 to 2003.
As a direct consequence of the switch to gas, the UK's underground-mined coal industry virtually closed down in the early 1990s. In 1984, there were 170 underground mines; by 1994 the rush to close down less profitable mines in the run up to privatization of the coal industry in that year helped to reduce this figure to just 17. By the end of 2005, there were only seven major underground mines still operating. (Small, independent mines still produce coal for domestic use in South Wales, The Forest of Dean, and even north Cumbria.) Ironically, rationalization of the industry now means that the 9000 workers still employed in it are twice as productive as those of the 1980s and 1990s.
Despite coal production being in private hands, government subsidies during periods of low coal price have prolonged the lives of some mines, though political and economic pressures continue to ensure an uncertain future for the seven mines that remained in 2004 (Figure 19). At the outset of the 21st century, the UK's major coal producers continue to depend almost entirely on the power companies. Power generators consume coal preferentially when the global gas price is high, with a knock-on effect for coal production (this is the cause of the fluctuations seen in Figure 38). With this variable in mind, it has been estimated that by 2010, coal-fired electricity generation could be anywhere between 35 and 80% of current levels, the huge range illustrating the uncertainties of prediction in the energy industry.
The quantity of imported coal continues to grow and in 2001, for the first time, more coal was imported than produced in the UK (Figure 38). In 2004 the UK imported about 50% of coal used here, mainly from Columbia and South Africa, together with some from Australia (a sea voyage of some twelve thousand miles), Poland and the USA. The low cost of bulk shipping, the quality of the coal and a competitive price clearly matter much more than the distance from the UK.
The short-term future of the UK's coal industry may ultimately be decided by its own government, which is committed to renewable sources of energy. New EU Directives aimed at reducing NOx, SO2 and CO2 emissions will force power companies to switch to low-sulphur imports and close older coal-fired power stations, further damaging the coal industry. The technology needed to capture NOx and SO2 during coal burning does exist, but has yet to be deployed widely. However, the UK's coal industry may ultimately be saved by the need for a secure domestic fuel source, especially with nuclear power facing an uncertain future and North Sea gas production in decline.
The plight of UK coal illustrates dramatically how vulnerable the concept of reserves is to economic and political change. In 1950, it was estimated that the UK's 'remaining coal reserves' were 172 × 109 t. The UK's total coal production during the period from 1950 to 2003 was about 7 × 109 t, which should have left more than 165 × 109 t in place. Why then does Table 4 show the UK's reserves to be just 1.5 × 109 t? Although most of the coal from the 1950 estimate is still in place, the country's 'technically and economically accessible' reserves have fallen to less than a hundredth of their mid-20th century value. Whilst most of the 165 × 109 t not currently considered reserves will be available in future, the coal remaining when underground mines close down is lost forever, through both flooding and subsidence. So, the proportion of the UK's coal resources that will constitute reserves in future is a technological, economic and political issue.
From today's perspective, the global electricity generation sector cannot manage without coal. Despite the demise of the UK's underground coal mines, the global future for coal looks more optimistic than for any of the other fossil fuels, simply because there is so much of it.