Coal looks set to be a major source of energy for the foreseeable future

Coal continues to thwart renewable ambitions

A new report suggests that the world will continue to rely on coal for the foreseeable future.

According to the International Energy Agency, coal’s share of the global energy mix continues to rise, and by 2017 it will come close to surpassing oil as the world’s top energy source.

In its Medium-Term Coal Market Report (MCMR) the IEA predicts that although the growth rate slows from the breakneck pace of the last decade, global coal consumption by 2017 will stand at 4.32 billion tonnes of oil equivalent (btoe), versus around 4.4btoe for oil, based on IEA medium-term projections.

 The IEA expects that coal demand will increase in every region of the world except the United States, where coal is being pushed out by natural gas.

“Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st century,” said IEA executive director Maria van der Hoeven. 

“This report sees that trend continuing. In fact, the world will burn around 1.2 billion more tonnes of coal per year by 2017 compared to today - equivalent to the current coal consumption of Russia and the United States combined. 

“Coal’s share of the global energy mix continues to grow each year, and if no changes are made to current policies, coal will catch oil within a decade.”

China and India lead the growth in coal consumption over the next five years. 

The report says China will surpass the rest of the world in coal demand during the outlook period, while India will become the largest seaborne coal importer and second-largest consumer, surpassing the United States.

In the absence of a high carbon price it is believed that only fierce competition from low-priced gas can effectively reduce coal demand. 

“The US experience suggests that a more efficient gas market, marked by flexible pricing and fuelled by indigenous unconventional resources that are produced sustainably, can reduce coal use, CO2 emissions and consumers’ electricity bills, without harming energy security,” Van der Hoeven added. “Europe, China and other regions should take note.”

The lack of a commercially proven carbon capture and storage (CCS) solution makes this prospect even more perturbing. 

“CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially,” Van der Hoeven said. 

“Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash.”

Further information:

See the Medium-Term Coal Market Report 2012 Factsheet

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