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Coal's increasing role in meeting energy needs of emerging countries

With the US, China and Russia holding abundant reserves, coal will remain attractive, according to Frost & Sullivan.

Coal will play a major role in meeting the energy needs of emerging countries over the next ten years, as India and China have abundant reserves, according to Global Prospects for Coal-Fired Power Generation, a new report from the business research and consulting firm Frost & Sullivan.

Countries such as the US, Russia, China and Australia also have huge coal reserves.

Harald Thaler, industry director at Frost & Sullivan, said:

China, India and the rest of Asia are the key focus areas for coal-fired investment in the coming decade. Strong projected electricity demand growth and low production costs make the region attractive for both domestic and global participants.

The analysis finds that Indonesia and Vietnam will emerge as major countries fuelling demand for coal-fired electricity generation. Japan and Korea will offer limited prospects, while Australia will experience strong growth.

Yet reliance on gas and oil in the Middle East, on hydroelectric power in South America and poor infrastructure and political stability in Africa will limit the prospects for coal-fired power generation in these regions, said Frost & Sullivan.

Thaler added:

North America and the European Union will continue to be key markets for coal due to large units of capacity decommissioning, which means large megawatt capacity orders as replacements.

However, prospects for coal-fired power generation in Europe and North America are currently looking bleak due to the threat of tougher regulations, uncertainties over future carbon prices and the development of carbon capture and storage (CCS), rising engineering procurement and construction (EPC) costs, and low gas prices.

Thaler warned that financing issues for large coal-fired plants are likely to recede as electricity demand across emerging geographies recovers. In Europe, order levels for steam plants, meanwhile, are expected to pick up over the next few years as capacity needs to be replaced in some countries that are affected by closures mandated by the large combustion plants directive. "Order levels will increase again as the technical and commercial viability of CCS is proved," Thaler said.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.