By Andy May
It’s official, the IEA believes coal-fired electricity generation will grow 9% in 2021 to an all-time high, after the final numbers are in. For details, check out their new report here. It has no fee wall.
This increase is driven by China and India, which account for two-thirds of global coal consumption. The IEA expects coal use in China and India to increase sharply in 2022, bringing global consumption to a new record of 8.025 million tonnes. They also expect coal production to soar after 2022, but they always predict that. The problem is that renewable energy growth cannot keep up with global electricity demand growth. Yes, natural gas and nuclear production can happen, but will it happen?
In 2021, worldwide coal production has not kept pace with explosive demand due to financial and regulatory constraints, causing coal futures prices in Newcastle to rise from less than $100/ton in January 2021 to less than $100/mt in January 2021. more than 250 USD/ton in October 2021. Currently, coal price $203/ton. Rising prices will stimulate more coal production, we will see. Pressure on governments to restrict coal mining and pressure on banks to limit lending to coal companies is high.
Coal power generation also increased in the US and Europe, but the increase was small and did not last long. The growth in China and India is what is driving the worldwide coal market. China’s share of global coal consumption is 53% in 2020 and India’s is 12%, as their coal use is increasing significantly, the decline in the rest of the world is not important. very important. See Figure 1.
Given the large number of people in the world without a reliable source of electricity, it is unlikely that coal use will continue to grow, the declines in the US and Europe being minuscule in comparison. However, the desire to move away from coal will likely increase natural gas demand and prices, and it could spur the construction of more nuclear power plants. One thing is clear, the future does not lie in the wind and the sun.
Coal production worldwide is down by about 5% in 2020, with large declines in the United States and the European Union. China accounts for about 50% of total production. Coal production will increase by about 5% in 2021, after the final numbers are available. Coal stocks are dwindling and will need to be replenished, especially in China, which has suffered from an energy shortfall over the past year. So China’s output will increase in 2022, but is not expected to keep up with the growth rate. As a result, China’s coal imports will increase, causing coal prices to rise. Output will set an all-time record for the year. Coal production is expected to increase rapidly in India, see Figure 2.
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