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Global coal-fired power demand at all-time high, threatening net zero goals

17th December 2021

By: Creamer Media Reporter

     

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 Global coal-fired electricity generation is powering towards an all-time high, as the rapid economic recovery of 2021 has pushed up demand faster than low-carbon supplies can keep up, while steeply rising natural gas prices have made coal more competitive, says the International Energy Association (IEA).

In its ‘Coal 2021’ report, published on December 17, the IEA states that electricity generation from coal is forecast to jump by 9% in 2021, to a record 10 350 TWh.

The rebound follows declines in 2019 and 2020 that have led to expectations that coal-fired power generation had peaked in 2018, but 2021 appears to have dashed those hopes.

Overall coal demand – including uses beyond power generation, such as cement and steel production – is forecast to grow by 6% in 2021. Although overall demand this year will not exceed the 2013 and 2014 records, the IEA says it could reach new all-time high as soon as 2022, depending on weather patterns and economic growth.

Coal demand could remain at record levels for the following two years, which the IEA says underscores the need for fast and strong policy action to curb emissions.

“Coal is the single-largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,” said IEA executive director Fatih Birol.

“Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5 °C.”

In China, where more than half of global coal-fired electricity generation takes place, coal power is expected to grow by 9% in 2021 despite a deceleration at the end of the year.

In India, it is forecast to grow by 12%. This would set new all-time highs in both countries, even as they roll out impressive amounts of solar and wind capacity.

While coal power generation is set to increase by almost 20% this year in the US and the EU, that is not enough to take it above 2019 levels. Coal use in those two markets is expected to go back into decline next year amid slow electricity demand growth and rapid expansion of renewable power.

“The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,” said IEA director of energy markets and security Keisuke Sadamori.

“Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand. These two economies – dependent on coal and with a combined population of almost three-billion people – hold the key to future coal demand.”

In 2020, global coal demand fell by 4.4%, the biggest decline in decades, but much smaller than the yearly drop that was initially expected at the height of the lockdowns early in the pandemic, the report shows.

Regional disparities were large. Coal demand grew by 1% for the full year in China, where the economy began recovering much earlier than elsewhere, whereas it dropped by nearly 20% in the US and the EU, and by 8% in India and South Africa.

The IEA report states that coal production failed to keep pace with rebounding coal demand in 2021, especially during the first half of the year, cutting into stock levels and pushing up prices.Coal production is forecast to reach an all-time high in 2022 and then plateau as demand flattens. 

 

Edited by Mariaan Webb
Creamer Media Senior Deputy Editor Online

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