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Coal demand to slow down over next five years

Staff Writer |
World demand for coal will slow over the next five years as renewables and energy efficiency gain traction, the International Energy Agency predicted.

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But much of Asia will remain hooked on coal which, while polluting, is also affordable and widely available, the Paris-based body said in a report.

"Because of the implications for air quality and carbon emissions, coal has come under fire in recent years, but it is too early to say that this is the end for coal," said Keisuke Sadamori, the director of the IEA's energy markets and security directorate, in a statement.

By 2021, the share of coal in the world's power generation mix is projected to drop to 36 percent, compared with 41 percent in 2014.

In 2015, global coal demand declined for the first time this century.

The big unknown in this scenario is China, which accounts for half of the world's demand for coal and almost half of its production, "and more than any other country influences global coal prices".

Coal-fired power generation in China dropped in 2015 due to sluggish power demand and a diversification policy that led to the development of new renewable and nuclear power generation capacity, the IEA said.

But for emerging economies with growing populations everywhere coal will remain "an affordable and secure energy source" to power their economies.

"This is the contradiction of coal -- while it can provide essential new power generation, it can also lock-in large amounts of carbon emissions for decades to come," the IEA said.

The IEA has detected a clear trend away from the fossil fuel in the United States where it is in competition with cheap natural gas and renewables, especially wind energy, and where emissions regulations have become stricter.

This led to a 15 percent drop in American coal consumption in 2015, the largest annual fall ever, but further declines are expected to be much less steep as high gas prices prompt less coal-to-gas switching, the IEA said.

Coal, however, has also become more expensive this year as China moved to cut capacity, curbing oversupply.

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