Hogsback and the problem with numbers

IT’s time for the Hogsback quiz, and here’s an easy one to start proceedings. If you own 41% of a pie today but it looks like you might only own 30% of the pie tomorrow have you got more or less to eat?

Staff Reporter

The quick answer, but also the wrong answer, is that you have less to eat.

The slightly longer answer, and the correct one, is likely to come from anyone who asks whether the pie itself will be bigger tomorrow, in which case you might have a smaller percentage but more pie.

Welcome everyone to the world of misleading statistics, a place inhabited by morons and environmentalists, people who are often one and the same, and can be identified by their inability to understand how the world really works.

What set The Hog off on this week’s rant was the nonsense which followed the release of the annual World Energy Outlook from the western world’s watchdog the International Energy Agency.

Seized on by everyone for their own purposes, some less honorable than others, it is a document which paints an interesting picture of strongly rising overall demand for energy and a more balanced energy “pie”

Coal, as always, was criticised for even existing by some people who probably penned their words on devices powered by electricity from a coal-fired power station – oh the ironies of life!

Having digested a reasonable share of crap from the critics, such as this observation from someone with a big name who ought to know better: “Renewables will overtake coal to become by far the biggest source of electricity by 2040”, it had obviously become time to sort the fact from the fiction.

The first point is that renewables will take a bigger share of the energy pie, but they certainly will not become “by far the biggest source of electricity by 2040”

What the IEA worked out is that coal’s share of worldwide electricity generation will fall from 41% in 2013 to 30% in 2040. Gas will grow from 22% to 23%. Nuclear will grow from 11% to 12% and oil will tumble from 4% to around 2%.

The fastest growing sectors will be renewables. Wind from around 3% to 9%. Solar from a negligible share to 4% and bioenergy from negligible to 4%.

The big four of global electricity in 2040 will be coal (30%), gas (23%), hydroelectricity (15%) and nuclear 12% -- collectively accounting for 80% of the total electricity market.

The big four, as at last year, had a 90% share of the market.

By now a reasonable reader is starting to get the picture and it’s one painted by a politician more than 150 years because it was the one-time British Prime Minister, Benjamin Disraeli, who famously said: “there are lies, damned lies, and statistics”

Having vented his annoyance The Hog will now tell a few truths about the outlook for coal, if only because no-one is doing the job.

First, back to the pie and the opening question about have a small slice and whether that means you have more or less to eat – a critical question because the world electricity pie (sorry, market) is expected to grow by 70% between 2013 and 2040.

So, rather than using less coal the world will be using more coal – a lot more coal.

The numbers look something like this:

  • Last year, according to the IEA the world generated 23,318 TWh (terawatt hours) with a TWh equal to one trillion watts (which is a lot).

  • In 2040, the IEA reckons the world will generate 39,444 TWh (which is a lot more watts, roughly 70% more).
  • Coal had a 41% share of the electricity market in 2013 – equal to 9.56 TWh

  • Coal will have a 30% share of the 70% bigger electricity market – which means coal will be responsible for 11.8 TWh.

Slice it, dice it, put it under a microscope, there is no escaping the facts that (a) coal’s share of the global electricity market will fall between now and 2040 as other sources of power expand, (b) the total market will grow significantly, and (c) the world will be using more coal in 2040 than it is using today.

Boiled down, the IEA report is not a negative for the Australian coal industry, it is a positive because as the Minerals Council pointed out yesterday the high quality coal that Australia produces will snatch a bigger share of the market.

Demand for Australian coal is expected to grow by 37% by 2040 with Australia’s share of the global coal trade growing from 29% to 33% by 2040.

How anyone could distort the numbers to use the IEA report as criticism of coal is beyond The Hog, and beyond any reasonable person.