SUEK at Krasnoyarsk Economic Forum: Coal has been and remains the most affordable resource for heat and power generation

This was the keynote address delivered by Andrey Fedorov, General Director of SUEK-Krasnoyarsk, at a strategic session in the Oil, Gas and Coal cluster at the Krasnoyarsk Economic Forum.

Coal generation now occupies the largest segment in the structure of global power generation. Demand for coal will remain stable mainly due to the growth of coal use in rapidly growing economies (India, China, Vietnam, Indonesia, and others). As a result, Russian coal exports have increased over the last decade from 131 Mt in 2012 to almost 200 Mt in 2022.

Since Russia is in the northern latitude zone, not just electricity, but also heat energy plays an important role for the country. "And whatever we may say about alternative sources of energy, heat can only be produced by gas or coal," emphasizes the General Director of SUEK-Krasnoyarsk. “The balance of heat generation is such that the European part of Russia gets central heating from gas TPPs, while Siberia and the Far East – from coal. Coal production in our country for domestic heat generation exceeded 115 Mt in 2022. Of these, 90 Mt are used at large power plants and about 25 Mt are used by small boiler houses and the private sector.”

At the same time Andrey Fedorov challenged the opinion that difficult environmental situation in cities of Siberia and Far East in winter time is caused only by operation of large power plants and conversion of their equipment to gas may solve problems with air quality, "A deeper study of this issue reveals that cogeneration heat and power plants equipped with filters and high stacks do not have such a significant impact on the environmental situation in the cities. The pollution is mainly caused by low-hight emission sources – stoves and boilers of private households, small standalone boilerhouses and vehicles. So, switching from coal to gas for central heating will not radically solve the environmental problems in the Siberian regions."

There is another important fact that transition to gas will inevitably lead to increased tariffs for heat energy," pointed out Andrei Fedorov. “Coal-fired generation is approximately 35% cheaper than gas-fired generation due to the presence of significant coal deposits in proximity to power generation facilities”.

Given that coal was and remains the most affordable energy resource for the Siberian and Far Eastern regions, Fedorov suggested that the "Strategy for Social and Economic Development of Siberia until 2035" should include measures for the development of coal-fired generation with an emphasis on gradual improvement of its environmental friendliness.