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Which region should expect more resilient coal demand?

20 November 2018 10:47 (UTC+04:00)
Which region should expect more resilient coal demand?

By Trend

Elsewhere coal demand could be more resilient than some expect, especially among developing economies in Asia, the International Energy Agency (IEA) said in its World Energy Outlook 2018.

While both coal demand and prices declined after 2014, prices started to rebound in 2016 and coal demand made a comeback in 2017, said the report.

"In Europe and North America, coal demand remains under pressure due to low electricity demand growth, strong uptake of renewables-based capacity and, in the United States, the availability of inexpensive natural gas. Nonetheless, elsewhere coal demand could be more resilient than some expect, especially among developing economies in Asia," IEA believes.

Coal demand in 2040 in the New Policies Scenario (NPS) has been revised down by some 3 percent compared with last year’s outlook. Downward revisions have been made for industrial coal use, as the shift from coal to alternative fuels in industry speeds up, and in the buildings sector where coal use almost disappears.

Overall coal demand for power generation declines slightly in the NPS as moderate growth in coal-fired generation is offset by improvements in plant efficiencies.

"Overall coal consumption flattens around 5 400 million tons of coal equivalent (Mtce) and does not regain the peak seen in 2014," said the report.

IEA believes that there are stark regional differences in coal production prospects to 2040.

"Coal production in China, by far the world’s largest coal producer, declines at an average rate of 0.4 percent per year over the outlook period. India overtakes Australia and the United States in the early 2020s to become the world’s second-largest coal producer behind China. US coal production is projected to drop by 30 percent over the period to 2040, reflecting declining domestic demand and limited opportunities to tap into export markets," the report shows.

In the NPS, the share of coal in global primary energy demand declines from 27 percent today to 22 percent in 2040, falling behind gas in the late 2020s.

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