A driving force of the 19th and 20th centuries, coal is showing signs of losing ground as an energy source in the Western world today.
Coal production risks finding itself squeezed out by several factors, including the abundance of natural gas from fracking and fierce competition from lower-cost wind and solar power, along with slowing demand for electricity as electronic products become more energy efficient. As a result, coal in the US has fallen from roughly half of power supplies to less than 30% in only 10 years. President Donald Trump’s first two years in office saw the retirement of up to 20 gigawatts (GW) of coal plants—more than in Obama’s entire first term. US coal consumption in 2018 was the lowest in 39 years.
In Europe, leading governments are either eliminating coal or discussing it as a possibility. The United Kingdom went coal-free for a day in April 2017 for the first time since the dawn of the Industrial Revolution, with plans to phase out all coal by 2025.
But the same is not true on a global scale. Tapping domestic coal reserves and the electricity they power has long been seen as a vital component of economic growth. And economic growth in some parts of the developing world has been swift.
Measuring Coal Growth in Asia
China is the quintessential example. As the country’s economy expanded tenfold between 2000 and 2017, newly built coal power plants in China added 700 megawatts (MW) of capacity—significantly more than the amount added anywhere else in that time. By comparison, the US, the European Union, and India have a cumulative coal capacity of only 653 MW. According to Coal 2018, a new report from the International Energy Agency (IEA), China is now by far the largest consumer of coal, burning 1 in 4 tons worldwide. China used almost six times as much coal as the US in 2017.
Coal production is also growing in India and Southeast Asia, though at a much lower level. While the IEA reports that the region’s coal demand more than doubled from 2000 to 2017, its capacity in 2017 was less than a quarter of China’s. Meanwhile, the 800 million people in Indonesia, Pakistan, Bangladesh, the Philippines, and Vietnam consume only one-seventh the amount of electricity per capita as a typical European. They too are turning to coal to power their economies.
The bottom line? IEA figures show that in 2017, global demand for coal for power generation rose 1%.
Surveying the Future of Coal
Writing in the New York Times, Somini Sengupta characterizes coal as “a powerful incumbent”: its availability, its political and economic power, and its compatibility with infrastructure make it difficult to step away from. She also cites the limitations of renewable energy sources that keep them from being adopted at scale as coal alternatives. And others have argued that the steel required to build renewables like wind farms entails further reliance on coal.
But the future of coal, even in Asia, is far from certain. The 2017 global uptick is still down from a 2014 peak of 5,588 million metric tons, according to Carbon Brief, which also notes that the IEA has been steadily lowering its five-year forecasts for future growth. The organization now sees “stable” demand for the next five years, with 2023 demand anticipated to still be well under the 2014 peak.
On balance, the IEA predicts that slowly growing demand in India and other Asian countries will be counteracted by declining demand in the US and Europe. And China, keen to clean the smog in its cities through its “blue sky” initiative, has pledged to cut back on coal use. The IEA writes that China’s coal demand “has entered a slow but structural decline” and will drop nearly 100 million tons by 2023. According to Coal 2018, coal’s share of the global medley of power sources will fall from 27% to 25% in the next five years, offset by growth from renewables and natural gas.
Coal’s future in India faces uncertainties, too. The Energy and Resources Institute (TERI) of New Delhi cites a government plan to add 40 GW of coal over the next decade—but also 135 GW of solar and 65 GW of wind power. In total, the shift could result in India dropping coal’s share from 57% to 38%. TERI predicts that coal will not fare even that well, since wind and solar are cheaper than the operating cost of existing coal plants, and coal costs are rising with the need to curtail air pollution. “It should be economic to immediately replace between one quarter and one half of the existing coal fleet with cheaper renewables,” TERI concludes.
While coal is unlikely to make a comeback, it is not retiring fast enough to meet the climate targets proposed by the Paris Agreement. In other words, it hasn’t peaked so much as plateaued. “Staving off the worst impacts of climate change will require curbing the growth of the coal industry in the developing world and phasing it out entirely in OECD [Organisation for Economic Co-operation and Development] countries,” writes Justin Guay of the ClimateWorks Foundation. “Peak consumption is significant on its own, but the time it takes to go from that peak to shuttering the last coal plant will prove the most important variable.”