Global coal demand saw a historic dip in 2019 but now predictions say it is set to rise steadily over the next five years. This demand is propelled by coal-fired electricity generation in developing countries outpacing the shift to cleaner sources of electricity in industrialized nations.
The International Energy Agency’s (IEA) latest market analysis and forecasts highlight the coal supply projections, expected demand, and trade through 2024. The IEA wrote in the report released in Paris that despite all the new policy changes and announcements, their forecasts remain similar to those made over the past few years.
Carlos Fernandez Alvarez, Senior Energy Analyst at IEA stated that 2019 was on track to see the biggest decline ever for coal power, because of growth in hydroelectricity production and relatively low electricity demand from China and India. However, the global coal demand is likely to steadily rise over the 4 years because of the expected increase in demand for India, China, and the Southeast Asian region. The steady outlook for coal comes in spite of decreased demand in industrialized nations. In the U.S., competition from shale gas has cut into demand for coal, and in Europe, the march towards zero carbon emissions is set to be achieved by 2050. The goals imply drastic reductions for coal-based electricity.
However, the coal demand scene is quite different in Asia. India will see coal generation increase by 4.6% per year through 2024 to help power its growing economy. In Southeast Asia, coal demand will grow more than 5% annually, and China will also have modest growth with usage peaking in 2022.
Fatih Birol, the IEA’s Executive Director, wrote in the foreword of their report that for the long-term success of any global effort to reduce emissions, it was important to address the issue in Asia. If new coal plants are added to meet the growing power demand in these countries, then the plants are likely to be in use for decades. Even as China’s coal consumption slows and then declines after 2022, emissions from the fuel would need to rapidly decline to meet climate targets.
The world is set to warm almost 3°C (5.4°F) by the end of the century according to the current policies, which is double the rate scientists predict as needed to limit climate change. The IEA reiterated that to curtail those increases, it would need to be backed by the use of technology. Even though the technology is expensive and untested at scale; but with coal here to stay, it may be the only option to reduce emissions.