Global coal demand dependent on China – IEA

Future demand for coal will largely depend on China following huge production declines in the US and Europe this year, the International Energy Agency (IEA) has said today.

The IEA forecasts global coal-fired electricity generation to fall by a record 2.5% in 2019, with production in Europe and the US sinking to levels not seen in decades.

The researchers said that growth in solar and wind power, low natural gas prices, and stagnating electricity demand have created a “perfect storm“ for coal in both regions.

But despite double-digit falls in US and European coal-fired electricity generation this year, demand continues to rise in Asia, with China producing and consuming half the world's coal.

“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,“ said Keisuke Sadamori, IEA director of energy markets and security.

“Wind and solar PV are growing rapidly in many parts of the world, with investment in new plants drying up. But this is not the end of coal since demand continues to expand in Asia.“

The IEA forecasts electricity generation from coal to rise by less than 1% annually over the next five years, with its share declining from 38% in 2018 to 35% in 2024.

It highlights countries in South and Southeast Asia – such as India, Indonesia and Vietnam – that are relying on coal to fuel their economic growth.

Natural gas and oil have traditionally been the main sources of power generation in Pakistan, but the country has commissioned 5 GW of coal power capacity since 2017, and another 5 GW is set to come online in the next few years.

Meanwhile in Bangladesh, where natural gas has long generated the bulk of electricity supply, coal will gain share in the coming years, with 10 GW of capacity in the pipeline.

However, the researchers warn that threats to the coal sector are increasing, with public opposition building, and many countries considering stronger environmental policies as renewables and natural gas become more competitive.

“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.

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