Five graphs that tell the future story of coal
- 16 Dec 2013, 15:00
- Robin Webster
International demand for coal is only going in one
direction: up. Radical action to stall the growth of coal and curb
the growth in greenhouse gas emissions is off-track, according to
the International Energy Agency (IEA).
The IEA's latest
five-year outlook predicts coal
consumption will grow at an average 2.3 per cent per year. The
world will burn almost
nine billion tonnes of coal per year by
2018, the agency predicts.
Despite efforts from the Chinese government to
encourage more efficient use of energy and more power from
renewables, China will account for nearly 60 per cent of the
China: the centre of the coal
Coal demand grew by 170 megatonnes around the world
in 2012, according to the report, or 2.3 per cent of annual
consumption. China accounted for 97 per cent of that
China is now importing roughly as much seaborne coal
as the rest of the world combined - and its coal consumption is
expected to grow by another 17 per cent over the next five years.
Overall, China alone will account for half the expected growth in
coal demand to 2018, as this chart shows:
Even that startling growth is a slight downgrade from
previous predictions. The country's government is making efforts to
reduce its dependency on coal and use energy more efficiently - for
example by introducing new carbon trading systems in seven separate
But the IEA says these efforts are likely to be at
least partially offset by the growth of China's middle class, which
is demanding more and more power. So while coal demand will grow a
bit slower, it's still going up.
Demand flat in the rich
The European Union experienced a significant - and well-publicised - increase in coal
consumption in 2012/13. But the IEA says the spike is only the
Overall, coal consumption in the EU will decline over
the next five years, it says. Sluggish economic growth projections,
more power production from renewables, and efficiency gains -
including replacing old coal power stations with new ones - will
all shrink demand.
Elsewhere in the rich world it's a different story,
however. Japan is closing down nuclear power stations in the wake
of the Fukushima disaster - with the result that it
is expected to be more dependent on coal over the next five years.
Meanwhile in Korea, new coal plants are coming online.
As a result, demand for coal across the OECD is
expected to remain broadly flat:
Change in coal demand across the Organisation for
Economic Co-operation and Development (OECD). The OECD is made up
34 high income countries. OECD Asia
Oceania comprises Australia, Israel, Japan, Korea and New
Per capita consumption tells a different
It's easy to lay the blame for increasing coal-fired
generation at China's door - or to a lesser extent other Asian
countries. But that doesn't tell the whole story, as the following
graph of coal consumption per capita demonstrates:
In 2011, China, India and Indonesia's coal
consumption for power generation alone was higher than the entire
OECD coal demand.
But China still uses about the same amount of coal
per head as Germany and Denmark - and it uses about half as much
coal per person as the USA. In India, each person still uses about
an eighth of the amount of electricity than someone living within
the OECD. Given vast coal availability, the IEA says that it's not
surprising that the governments of China, India, Indonesia and
Vietnam will rely on coal to provide their population with
Who's exporting where
Coal is largely a domestic energy source, according
to the IEA. Less than 17 per cent of global demand is traded
internationally, with the rest being produced at home.
But the amount of coal that's traded around the world
is increasing - it's doubled in the last five years. Over the next
five years, the IEA predicts that it will increase even more, and
that more coal will be imported from west to east:
What does all this mean for climate change?
All this isn't good news for the world's ability to
reduce greenhouse gas emissions and prevent climate change reaching
dangerous levels. Coal-fired generation is the biggest single
source of carbon dioxide emissions - and more than three-fifths of
the rise in global emissions since 2000 is due to coal burning.
The IEA's chief executive Maria van der Hoeven
says that if it's not curtailed, the
growth of coal "will have enormous and tragic consequences". The
IEA projects that if it continues, the world
could see a four degrees Celsius temperature rise.
There are potential solutions - but they are not
being implemented. Carbon capture and storage (CCS) technology is
"effectively stalled", according to the IEA. The lack of
large-scale demonstration plants around the world means that CCS
hasn't been tested properly yet.
The agency also highlights that the majority of the
coal power stations being built around the world are less efficient
than they could be. If India and other South-East Asian countries
switched to more efficient coal plants, that could save as much emissions as all the wind turbines in Europe,
according to the IEA.
An effective carbon price could change the economics
of coal - forcing power utilities to develop CCS and use more
efficient coal power plants. But that isn't happening yet either.
For example, that a carbon price of about $150 would be needed to
persuade energy companies in Asia to switch from coal to gas power,
the IEA says:
At the moment, there isn't any
carbon price at all in India - and Europe's Emissions Trading
Scheme has created a carbon price of about five euros.
The IEA says radical action is needed to curb
greenhouse gas emissions. It adds calmly and in a slight
understatement that "radical action is disappointingly absent."
Greenhouse gas emissions are projected to keep rising, and the
growth in coal is an important part of that story.