Gas and solar have brighter future than coal: broker

GOLDMAN Sachs has forecast the end of thermal coal's reign at the top of the energy ladder, citing tax, production costs and environmental regulations as the reason.

News Ltd reports the broking house said the prospect of weaker demand growth would see seaborne trade in thermal coal peak in 2020.

The news will be a blow to the huge coal projects in Queensland, including the $6 billion Wandoan project, owned by Glencore-Xstrata, and the mega mines in the Galilee Basin owned by Indian companies GVK and Adani, as well as Clive Palmer's Waratah Coal.

Goldman Sachs said companies were already moving their capital away from energy coal, and cited talks it held with equipment manufacturer Alstom to suggest the downside risk of future regulation could offset any cost advantage coal had to alternative sources.

Despite the poor outlook, Goldman Sachs is not suggesting the end of coal and pointed to the demand for the commodity in China and India.

But it said the energy sources with the most upside were gas and solar power.

Read the full story here.


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