Skip to content

Coal Power: Western Decline & The Rise Of Asia’s Tiger Economies

The Times

The Covid-19 pandemic is hastening the decline of coal in Europe and America, but it could actually bolster use of the polluting fuel in China and other parts of Asia, industry experts have warned.

Burning coal to generate electricity is one of the biggest contributors to climate change. The coronavirus outbreak has heralded dramatic changes in energy usage, including a drop in coal demand that has raised expectations of an acceleration in the shift toward greener power sources.

“In the US and in Europe, the decline in coal is speeding up,” Natalie Biggs, lead researcher on thermal coal at Wood Mackenzie, the natural resources consultancy, said. However, she warned: “It is very much a bifurcated story, where it’s the Atlantic doing one thing and the Pacific doing the other.”

In Britain, low electricity demand caused by the lockdown has helped the power grid to run without coal-fired generation for more than 50 days and counting, the longest stretch since the first coal plant started up in 1882. […]

However, Wood Mackenzie estimates that demand for thermal coal — the type used primarily in power stations (as distinct from coking coal for steelmaking) — had already fallen to about 556 million tonnes in the US last year, with Europe at about 534 million tonnes.

By contrast, China consumed about 3.6 billion tonnes of thermal coal, or roughly half of global demand, followed by India on 946 million tonnes — and in Asia-Pacific there is “still a huge amount of coal [power] generation getting added this year”.

The consultancy estimates that there will be a net increase in coal-fired power capacity globally this year, with 22 gigawatts of closures in Europe and the US easily offset by 49 gigawatts of plants opening in Asia-Pacific. It expects a 3 per cent dip in global demand for thermal coal this year, but does not think that coal demand will peak globally until 2027.

A report from the International Energy Agency last week found that “global approvals of new plants in the first quarter of 2020 (mainly in China) were at twice the rate seen in 2019”, with a long pipeline of projects under construction.

Full story