Global demand for coal sees biggest-ever drop in 2019

Coal-fired electricity in Europe and the United States is sinking to levels 'not seen in decades'

Global coal power generation experienced its biggest-ever drop in 2019 – but will remain stable over the next five years, due to aggressive expansion in Asia.

A report from the International Energy Agency (IEA) found that coal-fired electricity in Europe and the United States is sinking to levels “not seen in decades”. However, fossil fuel “remains resilient”, due to growth in major Asian markets.

According to a press release by the IEA, growth in solar PV and wind, low natural gas prices and stagnating electricity demand have created a “perfect storm” for coal in the UK and US.

“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.

The IEA expects coal-fired electricity to rise at less than 1 per cent a year between 2020 and 2024, with its share falling to 35 per cent in 2024, down from 38 per cent in 2019.

These trends are predicted to continue during 2024, although the speed of decline is expected to slow down, unless coal comes under additional pressure from stronger climate policies or lower-than-expected natural gas prices.

Despite these figures, Sadamori said this is not the end of coal.

“Coal is disappearing in many advanced economies but it remains resilient and is even continuing to grow in developing Asia,” he said.

The share of global coal power generation in Asia has climbed from just over 20 per cent in 1990 to almost 80 per cent in 2019.

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India bucked this trend and is expected to record its first drop in coal-fired power in the past 45 years. However, Sadamori explained this was “due to unusually low growth in electricity demand and exceptionally high hydropower output.

“It is not at all clear that it will be repeated,” he said.

Global trends depend largely on China, where half of the world’s coal is produced and consumed.

According to a report by Global Energy Monitor, the country currently has 121.3GW of coal plants under active construction, which is more than the amount under construction in the rest of the world combined (105.2 GW).

China also has an additional 26.4GW of construction projects under suspension, which are likely to be revived, meaning a total of 147.7GW could soon be added to the country’s coal fleet.

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