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Coal power faces “decade of stagnation” says IEA

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The world’s coal sector is facing “a decade of stagnation” according to the International Energy Agency.

In its annual coal market report, released this week, the IEA predicts that demand for coal will remain almost flat between now and 2022, with the fuel’s share in the global energy mix dipping from 27 per cent in 2016 to 26 per cent in 2022.

This is predicted to happen despite a backdrop of increased coal-fired power generation worldwide, with increases of 1.2 per cent per year between 2016 and 2022.  

Global coal consumption fell by 1.9 per cent last year to 5357 million tonnes of coal equivalent (Mtce), continuing the previous year’s decline. Lower gas prices, a wider focus on energy efficiency and the growth of renewables were significant drivers for this drop according to the report. 

Additionally, demand for coal fell by 4.2 per cent over the past two years, which the IEA said was the largest drop since it began recording over 40 years ago. Global coal demand is expected to reach 5530 Mtce in 2022, equal to the average of the last five years.  

And, due to “sluggish demand compared to other fuels”, coal’s share of the energy mix is predicted to fall to just below 36 per cent by 2022, which the IEA said would be the lowest level since its record-keeping began.

In regional terms, demand for coal fell in China, the US and the EU in 2016, with the EU set to become “an increasingly marginal player”. Today the bloc accounts for 6 per cent of global coal demand, but this is expected to continue to decrease.

However, demand grew in India and across many parts of Southeast Asia, where it is not expected to slow down. In India, despite the country’s increasing focus on renewables, coal-fired power generation is expected to grow by almost 4 per cent per year through 2022. And China will hold its position as the key driver for global coal markets, the report said.

In technology terms, the IEA said urgent action is necessary to support carbon capture, utilization and storage (CCUS), which still trails other low-carbon technologies despite significant developments in 2016.

Keisuke Sadamori, IEA director for energy markets and security, said the agency’s global CCUS summit, which took place in November in Paris, “serves as a critical reminder why technologies like CCUS are so important, and why governments and companies need to step up their policy support and investments in that sector in order to meet global climate goals”.  

"Indeed, without CCUS, coal use will be seriously constrained in the future,” he added. 

 

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