Power sector dampens global coal demand

18 December 2019

Coal-fired power generation is set to experience its largest ever decline in 2019, reducing demand for coal globally, according to the International Energy Agency (IEA).

In its latest coal outlook analysis, the Paris-based agency has forecast a 2.5 per cent drop in coal-fired electricity generation, led by double-digit falls in the USA and Europe. The trend means that global coal demand is expected to decline in 2019.

The IEA also forecasts global coal demand to remain broadly stable over the next five years, supported by robust growth in major Asian markets.

According to the IEA, 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.

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

Ultimately, global trends will depend largely on China, where half of the world’s coal is produced and consumed, IEA says.

Other countries in Asia, including India, Indonesia and Vietnam, are also relying on coal to fuel their economic growth.

“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 Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.

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

 



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