Global coal demand growth to slow in next 5 years on China - IEA
According to the International Energy Agency, global coal demand growth will slow through 2018 as China, the world’s biggest consumer, seeks to cut its dependency on the power plant fuel.
The Paris based agency in its Medium-Term Coal Market Report said that global coal use will rise by 2.3% a year to 6.35 billion metric tonne of coal equivalent in the 5 years to 2018, below 2.6% growth predicted last year for the period through 2017.
It said that coal demand growth of 2.3% last year outpaced that of other fossil fuels, strengthening its position as the second-largest energy source behind oil.
It added that countries including China and India outside the 34-nation Organization for Economic Cooperation and Development, which account for more than Q3 of global coal use, are expected to drive the growth, with annual increases in consumption of 3.1%, down from 3.9% forecast last year through 2017.
The IEA said that “Gross Domestic Product growth and electricity demand in China are projected to decouple due to intensified energy-efficient measures and structural change towards less power intensive sectors.”
It said that “Remarkably, the projected decrease in electricity intensity of GDP leads to a reduction of coal consumption equal to the aggregated annual German and British coal consumption.”
According to the report, China’s coal use will rise 2.6% a year to 3.28 billion tonne in 2018 while India will see annual growth of 4.9% to 657 million tonne.
Europe and US
The IEA said that OECD coal use is projected to be little changed with European demand declining 1% a year to 417 million tonne in 2018 as sluggish power use, energy efficiency and renewable output hamper new investments.
The agency said that US coal demand is expected to fall 0.1% a year to 606 million tonne in 2018 as older plants are retired and after President Mr Barrack Obama announced stricter environmental standards and further measures to curb emissions.
Mr Maria van der Hoeven, executive director of the IEA, said that currently, coal in its form is “unsustainable,” even assuming that more efficient heat and power plants will be built, as it will contribute to pushing global temperatures above the agreed target of a long-term increase of by 2 degrees Celsius (3.6 degrees Fahrenheit).
Source – Bloomberg