Sunday, July 20, 2008

Why Are They Building Coal Plants in Dubai?

New coal plants are being built in Abu Dhabi, Oman, Dubai. Even oil rich Russia is building 30 new coal plants within the next 2-3 years. China commissions a new coal plant every week to week and a half. What is going on?
They have opted for coal for a single compelling reason: cost. They can produce a megawatt-hour of electricity using Australian coal, Der Spiegel calculates, for $17.49 (U.S.). Using natural gas, the cost rises to $41.34. Using oil, the cost rises further to $79.50. At the same time, they can sell their oil on the global market for something approaching (or occasionally exceeding) $140 a barrel. _GlobeandMail
So even in the oil-saturated Persian Gulf, the economics of energy production favours coal over oil and gas--significantly. Of course, the fuel for a megawatt-hour of nuclear fission energy will cost you around $8 or so. So really, if you have your nuclear plant already built, nuclear is the way to go.

In the US, the Congress and environmental regulations/lobbies have made it almost impossible to generate power from any source whatsoever. Whatever compromises the Pelosi/Boxer Congress eventually reaches, you can be sure it will cost consumers and taxpayers at least double or triple what it should have cost. The joys of nanny state government--cradle to grave mismanagement.

H/T istockanalyst

Previously published in Al Fin

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