PERTH (miningweekly.com) – A new report by the International Energy Agency (IEA) has shown that growth in coal demand from India and other Asian countries would offset declining demand from European nations and from the US, with Australia poised to take up a greater share of coal supply.

In its Coal 2019 report launched in Johannesburg, the IEA noted that the weakness in coal demand this year resulted mainly from coal-fired electricity generation, which is set to experience its largest ever decline, over 250 terawatt hours (TWh), or more than 2.5%.

This drop is led by double-digit falls in the US and Europe, which was released today and contains forecasts through 2024.

“It is too soon to say whether the expected global decrease in coal power generation this year will be the start of a lasting trend. The IEA forecasts that renewable sources will supply a major portion of the increase in global electricity demand over the next five years,” said Keisuke Sadamori, the IEA’s director of energy markets and security.

“Electricity generation from coal will rise only marginally over that period, at less than 1% per year – and its share will decline from 38% in 2018 to 35% in 2024. This means coal remains by far the single largest source of power supply worldwide.”

Sadamori said that ultimately, global trends would depend largely on China, where half of the world’s coal is produced and consumed.

“Wind and solar PV are growing rapidly in many parts of the world. With investment in new plants drying up, coal power capacity outside Asia is clearly declining and will continue to do so in the coming years,” said Sadamori.

“But this is not the end of coal, since demand continues to expand in Asia. The region’s share of global coal power generation has climbed from just over 20% in 1990 to almost 80% in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals.”

“In 2019, global coal power generation will experience the biggest drop ever and coal power generation in India will probably decline for the first time in 45 years,” Sadamori said.

“The global picture, however, has not changed much. Coal is disappearing in many advanced economies, but it remains resilient and is even continuing to grow in developing Asia. The low coal power generation in India this year was due to unusually low growth in electricity demand and exceptionally high hydropower output. It is not at all clear that it will be repeated.”

Australia’s Resources Minister Matt Canavan on Tuesday said that Australia was well placed to supply Asia’s demand for coal, with the IEA report forecasting increasing demand for Australian coal and a growing share of global coal trade from 2018 to 2024.

“We have some of the highest quality thermal coal in the world, and the International Energy Agency report shows Australian coal will be in strong demand around the world for many years to come, particularly in India and other Asian nations,” Canavan said.

The IEA report said Australia’s coal exports were 382-million tonnes in 2018, an increase of about 3-million tonnes or 0.8% on the previous year. The higher volumes and prices meant export revenues totalled $67-billion, making coal the country’s most valuable export commodity.

Australia’s coal production is forecast to reach 444-million tonnes of coal in 2024 to meet export demand, up 35-million tonnes compared to 2018.

Output for metallurgical coal, used for steelmaking, is forecast to rise 1.8 per cent per year from 174-million tonnes in 2018 to 194-million tonnes in 2024.  Output for thermal coal, used for electricity generation, is forecast to rise 1.1 per cent per year from 219-million tonnes to 234-million tonnes.

“In August this year, I released the Coal in India report and visited India to promote Australia as a reliable energy supplier and to encourage investment in Australian resources,” Canavan said.

“The IEA report shows Australia is well placed to take advantage of the shifts in international demand, and to supply markets in Southeast Asia and India as new coal-based electricity generation comes on line over the coming years.

“For the sake of Aussie jobs and our dynamic regional communities we need to grasp the opportunities that coal presents, both here and overseas.”