by N. Peter Kramer
The decline in global coal consumption is coming to a halt, the International Energy Agency (IEA) predicts in its just published ‘Annual Coal Report’. Since the peak in 2013, the world has started burning 800 million tons of coal less annually. But for the next four years, the decline will be limited to a negligible 23 million tons.
The paradox, the agency says, is that the stagnation comes at a time when three important factors are negative for coal. First one is, that in the western world in particular, more and more coal-fired power stations are being shut down because they are not in line with climate goals. The second one: wind turbines and solar panels meet an increasing share of the demand for electricity. And the third factor is, that competition with ever cheaper natural gas is increasing. The report writes that coal consumption has fallen dramatically in recent years. Last year for instance, consumption in the United States and Europe fell by record figures and even in India less electricity was generated with coal for the first time in 40 years. This trend will continue to accelerate this year, also because the global economy is in a serious slump due to the corona pandemic. Demand for coal will see its biggest decline since World War II. It is estimated that around 5 percent less will be burned.
But that effect will no longer occur net year, with an increase as a result. And the decline will not resume in subsequent years. Although less and less coal is consumed in the US and Europe, the impact of this is limited because the Western world only accounts for 10 percent of global consumption. The decline will not continue, because coal is necessary for economic growth in Asia. ‘South and Southeast Asia has 2.4 billion people whose power consumption is at a quarter of the global average’, the IEA reports. ‘The prospects for economic growth are good, and without coal it will not be possible to generate the necessary extra electricity’. The stagnation is only the result of rising demand in India and South-East Asia. Remarkable, demand in China will neither rise nor fall.
In the coming years, dozens of new coal mines will be opened in South Africa, Russia, Mozambique and in Australia. Coal is big business in Australia and it will remain so for a while. There are about 83 projects for new coal mines in the country. The full list of new coal mines can be found in IEA’s annual coal report.
The stagnation is bad for the climate. Coal is by far the largest source of energy-related CO2 emissions. The fact that decline will come to a standstill is a setback for the Paris Agreement. ‘A challenge’, says the IEA euphemistically. In 2021, 3 percent more coal power will be generated than this year. The CO2 emissions from the electricity sector will increase by 2 percent. ’Without additional policy measures, the world will move in the wrong direction’ warns the IEA.