Like almost every other aspect of the global economic story,coal demand in the past three decades has been a story about the rise of China. As the world’s manufacturing base moved east,so did the demand for cheap,easy-to-build power needed to fuel everything from steel plants to cities.
Since 1990,US coal demand has halved,largely because power companies have turned to gas instead. European demand has dropped by almost two-thirds. Yet these gains have been easily offset by China’s growth. Its consumption was roughly on par with the US when the Cold War ended,but now stands at a stunning 87,638 terajoules,more than half the world’s total demand.
It’s not just China. India now burns more coal than Europe and the US combined and miners are betting on rising demand over the next decade from countries such as Vietnam,Bangladesh and Indonesia,although pollution concerns and cheaper alternatives threaten to derail those plans.
Nothing highlights coal’s migration from west to east better than where power stations are being retired and built. For decades,plants have been closing across Europe,phased out by a potent combination of climate policy pressure,tumbling renewables costs and a flood of cheap gas.
The UK,the original poster child for the coal-powered Industrial Revolution,went 67 consecutive days without burning any of the fuel last year. Spain alone closed seven of its 15 coal plants in 2020. In total,half of the region’s coal plants have closed or will close by 2030.
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This year,the power crisis in Europe has exposed the vulnerabilities in the system. The UK has been particularly hard hit after calm weather hit wind-power supply,exacerbating the effects of a wider regional gas shortage.
Meanwhile,closures in Europe have been easily offset by new builds across Asia. China,India,Indonesia,Japan and Vietnam plan to add more than 600 coal power units. China alone is currently building or planning coal power plants that are the equivalent of six times Germany’s entire coal burning capacity.
The 2010s have been the decade of renewable energy. Rapid increases in technology,hefty government subsidies and tumbling costs have seen seas of solar panels and forests of wind turbines become commonplace.
Yet despite the huge renewable rollout,burning coal remains the world’s favourite way to make power,accounting for 35 per cent of all electricity. While the renewables share has grown from 20 per cent to 29 per cent of the global mix in the last decade,coal only lost 5 percentage points in the same period.
Coal is the single biggest source of carbon dioxide emissions and the electricity sector’s biggest source of greenhouse gases. While global CO2 emissions fell by the most on record last year,this was driven by a collapse in demand driven by the pandemic,rather than a step change in fossil fuel use. Global emissions are surging back this year as the economy recovers and power crunches ripple around the world.
Bloomberg
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