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Has the world hit ‘peak coal’?
Global thermal coal consumption probably peaked in 2013 and is set to decline by an additional 2–4% in 2015. So says a statistical analysis by the Institute for Energy Economics and Financial Analysis (IEEFA).
The analysis highlights a declining consumption trend in the traditional big coal consumers, particularly China. Coal production and coal imports in China peaked in 2013 and the rate of decline in both production and imports accelerated throughout 2014 and 2015, says IEEFA. China produced and consumed half of the world’s coal between 2012 and 2014.
The analysis also suggests that China’s government policy is struggling to respond to the rate of decline in coal markets. Between January and September 2015, IEEFA data says China issued environmental approvals to 155 coal-fired power plants (four plants per week) with a total capacity of 123 GW. ‘With coal demand falling and major overcapacity in coal-fired power generation, this money has been wasted on what are likely to become stranded assets,’ said Tim Buckley, IEEFA’s Director of Energy Finance Studies and the lead author of the report.
The analysis shows that alongside China’s 5.7% decline in 2015, US domestic coal consumption was down 11%, Germany was down 3%, the UK was down 16%, Japan 5%, Canada 5%, and Turkey 13% year on year. In other large markets, South Korean consumption was flat, Indonesia was down 2% and Mexico was down 1%.
Only two major coal-consuming economies are reporting coal consumption growth in 2015 according to IEEFA – Indian coal consumption is up 3–6% year on year (see December’s Another Look column), while Australian coal consumption is up marginally in 2015.
‘This new analysis illustrates that an epoch-defining shift is shaping the global outlook for coal, driven fundamentally by technology innovation,’ said Buckley. ‘The global peak reflects a remarkable peak and decline in Chinese coal consumption. China, Japan and India are the three largest coal-importing nations and history is likely to show their thermal coal imports peaked in 2013, 2014 and 2015 respectively.’
- The EU and eight OECD countries including the US, Canada and Japan have agreed to reduce aid for coal-fired power plants in developing countries after two years of negotiation, Euractiv reports. However, certain small subcritical plants in poorer countries, as well as medium-sized supercritical plants in certain areas are exempt from the decision.
