Global electricity generation from coal is surging to a new annual record this year, undermining efforts to reduce greenhouse gas emissions and potentially putting global coal demand on course for an all-time high next year, International Energy Agency (IEA) said Friday in its annual Coal 2021 report.
Since 2019 coal power generation has been in decline, and last year coal demand saw the highest fall due to COVID-19 measures.
After falling in 2019 and 2020, global power generation from coal is expected to increase 9% this year to an all-time high of 10,350 terawatt-hours, the IEA's report found.
The Agency found that global carbon dioxide (CO2) emissions are on an upward trajectory, with this year set to be the second-largest annual increase in history.
The rapid economic recovery that accelerated electricity demand faster than low-carbon supplies drove the rebound in coal power generation. The steep rise in natural gas prices also contributed to greater demand for coal as a more cost-competitive alternative fuel source.
According to the report, global coal demand, inclusive of its use in cement and steel production, is forecast to grow by 6% this year. Although this will not take it above the record levels seen in 2013 and 2014, depending on weather patterns and economic growth, overall coal demand could reach new all-time highs as soon as 2022 and remain at that level for the following two years, underscoring the need for fast and strong policy action.
'Coal is the single largest source of global carbon emissions and this year's historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero,' said IEA Executive Director Fatih Birol. 'Without strong and immediate actions by governments to tackle coal emissions in a way that is fair, affordable and secure for those affected, we will have little chance, if any at all, of limiting global warming to 1.5 °C.'
- Along with China and India, US and EU also see coal power rise
Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand.
According to Keisuke Sadamori, director of energy markets and security at the IEA, these two coal powerhouses, with a combined population of almost 3 billion people, hold the key to future coal demand.
China and India are expected to see growth in coal-fired electricity generation. China is expected to generate more than half of the global generation with a growth rate of 9% this year despite deceleration at the end of the year. In India, coal power is forecast to grow by 12%.
These figures represent record highs for both countries despite adding huge solar and wind capacity.
'The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action,' Sadamori said.
Although coal power generation is set to increase by almost 20% this year in the US and the European Union, it is not enough to take it above 2019 levels, according to the IEA. Coal use in these two markets is expected to retreat next year amid slow electricity demand growth and the rapid expansion of renewable power.
In 2020, global coal demand fell by 4.4%, the largest decline in decades but much smaller than the annual drop that was initially expected at the height of the lockdowns early in the pandemic, the report showed.
Regional disparities were large. Coal demand grew by 1% for the full year in China where the economy began recovering much earlier than elsewhere, whereas it dropped by nearly 20% in the US and the EU, and by 8% in India and South Africa.
Coal prices have been on a rollercoaster ride over the past two years as prices started to climb toward the end of last year with supply cutbacks balancing the market before rebounds in economic activity. Coal demand in China started pushing the prices up to all-time highs in early October to $298 per ton in Europe which then plummeted to $150 per ton as of mid-December.
By Nuran Erkul Kaya
Anadolu Agency
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