LONDON (Reuters) - Does coal have a future? Climate change protesters and coal traders alike say it's a daft question, but agreement ends there.
For protesters, the shiny black lumps of fossilized wood and plants are contributing to drastic climate change. For traders, coal is an energy no-brainer which offers a ray of hope for 1.6 billion people living without electricity.
They're probably both right.
By mid-century, the world may have an extra 3 billion people and four times the wealth but somehow it must also at least halve carbon emissions from its main energy source -- fossil fuels -- to rein in dangerous global warming, scientists say.
Power generation accounts for about two-fifths of global emissions, from burning fossil fuels, of the main man-made greenhouse gas, carbon dioxide, and coal for most of that.
"You've got to say -- 'Right, here's the line in the sand, we're going to stop it here because it's madness to continue'," said Connor O'Brien, spokesman for protesters against a proposed new coal-fired power station in southern England, which would be Britain's first for nearly 30 years.
The Camp for Climate Action in Kingsnorth, Kent, has so far recruited about 600 people, organizers say, and joins four similar protests worldwide this year, targeting the coal industry in Australia, Germany and North America.
The Kent camp protesters aim to try and shut on Saturday the existing coal-fired power station which is slated for replacement, owned by the UK arm of German utility E.ON.
Despite environmentalists' concerns, energy companies say they are racing to meet demand for coal, especially in developing countries where the fuel is cheap and plentiful even in a year where coal price rises have outstripped those of oil.
"It doesn't paint a very good picture of the future for carbon emissions but there is no other real choice -- coal is one of the few fuel sources which has a real capacity to expand," said Francisco Blanch, head of global commodities research at Merrill Lynch.
Meanwhile, industrialized nations want to avoid over-dependence on imported, cleaner gas, given security of supply concerns. Ukraine is a case in point, now switching to domestic coal after neighboring Russia halted gas supplies in a price dispute two years ago.
Dilemmas of choice, to balance competing benefits and tradeoffs, have left the world's energy future wide open.
Nuclear, for example, is hemmed in by public opposition in much of the developed world, while developing countries may be geologically unstable, or else, like India, face a political leap to sign a non-proliferation treaty which grants access to imported uranium.
Wind farms are growing rapidly but grid connection poses an extra expense, while in poorer nations antiquated networks struggle to handle the volatile power source. Solar power is booming, but only provides a tiny fraction of all power.
Environmentalists stress the benefits of renewable energy, which is often more expensive than oil and coal, in saved fuel and avoided climate change, and have won some battles.
In June, a state court in Georgia overturned an air permit for a new coal plant, saying the plant needed to limit emissions of carbon dioxide. On Monday, green groups dropped opposition to a Texas coal plant after the utility agreed to pay for emissions cuts elsewhere.
Former U.S. vice president and Nobel prize-winning climate crusader Al Gore called last month for a complete U.S. conversion to renewable electricity sources within 10 years -- a proposal that won support from both presidential candidates.
Despite such apparent setbacks, coal's future looks safe.
In the United States utilities are building 28 coal-fired plants and another 66 are in early planning, as gas price hikes motivate new interest.
In Europe, Germany is building 16 new plants to come on line by 2012, despite a European Union emissions trading scheme which penalizes greenhouse gases. In Italy, Enel is converting to coal from oil-fuelled power plants and Britain has endorsed new coal.
In developing nations, growth is rampant. Poor grid access coupled with frequent blackouts, rapid economic growth and plentiful fuel are driving a frenzy to build new power plants which take just 21 months to build in China.
Over the past three years, China has added each year new coal plants equivalent to Britain's entire electricity-generating capacity. India has approved eight "ultra mega" plants which will add nearly half again to its present generating capacity.
Elsewhere in Asia, Indonesia is cranking up its coal-fired power generation by 40 percent and Vietnam plans to quadruple electricity generation by 2020, almost all from coal according to a source at a European utility investing in Asian power.
In Africa, South Africa is suffering crippling power shortages and racing to build new coal-fired plants, using abundant indigenous supplies. Mozambique, Botswana and Nigeria all plan new coal plants.
Even in the oil-rich Middle East, the United Arab Emirates ordered the Gulf's first coal plant last month.
The biggest brake on these plans is not climate protests but a shortage of steam turbines, with a three-year backlog in the U.S. and Europe following exceptional demand and a 12-18 month lag between order and delivery in China, say utilities.
Confronted by this scramble, politicians and scientists are reviewing an untested technology called carbon capture and storage (CCS) which could trap and bury underground, in disused oil wells and coal seams, the carbon emissions from coal plants.
The Paris-based International Energy Agency (IEA) says CCS equipment must be fitted to all the world's coal plants to halve carbon emissions by 2050, widely held as a minimum climate change goal.
But the agency's own scientists express personal doubts that this is achievable.
"I don't think in my lifetime I will ever see more than 50 percent of the coal-fired plants in China being fitted with CCS," said 45-year-old Sankar Bhattacharya, senior IEA coal analyst, adding that many of China's new power plants will be in centers of population far from potential CO2 storage sites.
CCS is untested for good reason. The technology will add about $1 billion to the capital cost of a power plant, not including efficiency losses which will demand a quarter more coal burn just to maintain output, and extra water for steam to make up the lost power.
"The Indians are vehemently against it," added Bhattacharya, citing cost, efficiency and water worries.
Only a handful of rich countries have so far committed to test it. Britain will likely spend several hundred million pounds demonstrating the technology, but only as a bolt-on to a much bigger plant, and not fully operational until 2019 according to E.ON, one project bidder.
It may in the end require a nudge from the climate itself to mobilize deployment of a full arsenal of carbon-cutting technologies, some of which are still in the lab.
Peter Taylor, a main author of the IEA's "Energy Technology Perspectives" report, says climate impacts will emerge without "extremely fast" action to curb greenhouse gases.
"I think you resign yourself to the fact that you'll only be able to stabilize temperatures at a higher level, and then we'll see what the impact is," he said.
Writing by Gerard Wynn, Editing by Janet Lawrence