As the International Energy Agency continues to argue with OPEC over the question of when global demand for crude oil will peak, the question of when, if ever, the global community will peak Coal demand continues to hamper efforts to achieve net zero carbon emissions by 2050, or frankly any other date.
The world’s two most populous countries, China and India, remain the main stumbling blocks for central planners of this heavily subsidized energy transition. While Western countries like Germany and Britain are feverishly working to decarbonize and deindustrialize their economies, thereby destroying economic growth, China, and to a lesser extent India, continue to use increasing quantities of coal to fuel the growth of their own economic engines.
In its annual global coal use survey released this month, the Global Energy Monitor reveals that global coal mining capacity increased by 2% last year, driven by China’s domestic growth. China accounted for two-thirds of the 69.5 gigawatts (GW) of growth in global coal-fired power generation capacity in 2023. And, despite its commitments to focus on reducing its carbon emissions, Xi Jinping’s government seems ready to exceed the 48.4 GW mark. expansion in 2023 during 2024.
For its part, India added 5.5 GW of new coal-fired power plants in 2023, despite continued commitments from Prime Minister Narendra Modi to meet his country’s stated emissions targets. THE Economic Times of India reports that despite the massive investments India has made to add new wind and solar farms to its generating capacity, the power sector has not been able to keep up with rapid economic growth of the country and the energy demand it needs. India’s energy consumption grew at a faster rate than any other country in 2023.
As the two Asian powers continued to exploit the use of abundant and cheap coal to power their growing economies, global coal capacity retirements fell to their lowest level since 2010, at just 21.1 GW decommissioned in 2023. The United States led the way, retiring 9.7 GW. GW in 2023, but this number was far lower than the 14.3 GW decommissioned in 2022 and the record 21.5 GW decommissioned in 2015. The UK has led the march towards decarbonisation in Europe, removing 3.1 GW, much more than the entire European Union. combined managed to achieve. This is not surprising given that Germany had to restart several mothballed coal plants to keep the lights on as its wind industry continued its long history of failing to deliver on its promises.
Flora Champenois, director of the GEM Coal program, says the rapid expansion of the global coal stock in 2023 was an “anomaly”, saying “all signs point to a reversal of this accelerated expansion”.
But China does not appear to have received this particular memo. Reuters reported on April 9 that China’s coal imports in the 1st quarter of 2024 reached 97.43 million tons, a healthy increase of 16.9% compared to the same period in 2023. Reuters says that “the consensus forecast is that arrivals this year will be between 450 and 500 million tonnes,” compared to 2023 Chinese imports of 474.42 million tonnes. But a continued increase of 16.9% throughout the year would bring this country’s imports to a much more robust level, at 554 million tonnes. Given that China currently has more than 70 GW of new coal-fired power plants under construction, it seems unlikely that the country’s coal demand will slow down in the near future.
The essential
At the same time as these reports of China and India’s growing coal use were making news, Texas power grid managers at ERCOT announced concerns on April 15 that they could run out of capacity production this week, during one of the mildest months of the year. . Texas has been a national leader in decommissioning coal-fired power plants in recent years as power generators attempt to replace them primarily with intermittent solar capacity. Of course, this trend follows the national mindset of prioritizing emissions targets over energy security needs.
In case some people still haven’t noticed, Chinese and Indian leaders are not following this direction of the program. These two emerging Asian powers continue to be rational actors in the energy domain, prioritizing energy security needs above all other considerations. It is frankly irrational for Western and world leaders to expect leaders of developing countries to behave any differently.
What all this probably means is that, until truly viable, scalable and affordable alternatives to coal come to fruition, there is no real reason to expect the world to reach ” coal peak” in the near future.