The IEA, headquartered in Paris, has estimated global coal-based electricity production at 10,350 terawatt-hours (TWh). However, the share of coal in the global electricity mix in 2021 is expected to be 36%, about 5 percentage points below its 2007 peak. In the United States and the European Union, electricity production in the coal is expected to increase by almost 20% in 2021, but will not reach 2019 levels.
In contrast, the estimated growth of 12% in India and 9% in China will push coal-fired power generation to record levels in both countries. Given the rebound in global industrial production, aggregate demand for coal in the world is expected to increase by 6% in 2021, bringing it closer to the record levels reached in 2013 and 2014.
At the same time, the decline in global coal-fired power generation in 2019 and 2020 has raised hopes that it could have peaked in 2018. But 2021 dashed those hopes, according to the IEA report.
Even before the pandemic, coal faced a difficult outlook for 2020. Demand was squeezed by a mild winter in the Northern Hemisphere, low natural gas prices and strong growth in renewables. When demand for electricity and prices for natural gas fell as the Covid-19 crisis intensified, coal-fired power generation took the brunt of the impacts. The decline in industrial activity has also affected demand for coal, albeit to a more limited extent. In the early months of the crisis, a double-digit annual decline in global demand for coal seemed plausible.
But China’s economic recovery came earlier and stronger than initially expected, with year-over-year growth picking up as early as April. With the economic recovery that follows elsewhere and a cold snap in Northeast Asia in December, global demand for coal fell 4.4% in 2020 – the biggest drop in several decades but less than initially expected. Regional disparities were significant. Demand for coal grew 1% in China in 2020, but fell almost 20% in the United States and the European Union – and 8% in India and South Africa.
In an expected move, China’s influence in coal markets is hard to overestimate, the IEA said. China’s electricity production, including district heating, accounts for one-third of global coal consumption. China’s overall coal consumption is more than half of the world total. The demand for coal in China is supported by the rapid growth in demand for electricity and the resilience of heavy industry.
“This is despite a decade of sustained and sustained efforts to diversify the country’s energy mix – during which China has increased its hydropower, wind, solar and nuclear capacity by more than any other country in the world – and the intensive shift from coal to natural gas in residential heating and light industry. China is also the world’s largest producer and importer of coal, with fluctuations in domestic prices due to imbalances between ‘supply and demand having an immediate impact on international markets,’ the report says.
Surprisingly, global coal consumption beyond 2021 is expected to revert to the pattern seen over the previous decade: declines in advanced economies offset by growth in some emerging and developing economies.
After its brief rebound in the United States and the European Union in 2021, demand for coal will resume its decline until 2024. This is mainly due to the electricity sector where the slow growth in demand for electricity and the rapid expansion of wind and solar photovoltaic power is eating away at coal power. generation. In addition, much of the recent shift from natural gas to coal will reverse as gas prices retreat from their highs.
“At the same time, countries like Viet Nam, the Philippines and Bangladesh, where very strong growth in demand for coal was expected a few years ago, are now expected to post more modest increases because they are turning more to sources of electricity that are less carbon-intensive. However, global coal trends will be largely shaped by China and India, which account for two-thirds of global coal consumption, despite their efforts to increase renewables and other low-emission energy sources. carbon, ”adds the report.
In China, the growth in demand for coal is expected to average less than 1% per year between 2022 and 2024. In India, stronger economic growth and increasing electrification are expected to lead to a growth in demand for coal of 4% per year. year. India’s growing appetite for coal is expected to add 130 million tonnes (Mt) to the demand for coal between 2021 and 2024. Based on current trends, global demand for coal is expected to reach 8,025 million tonnes in 2022, the highest level ever, and stay there until 2024.
DILIP KUMAR JHA