Page 4 - AfrElec Week 50

AfrElec COMMENTARY AfrElec
Coal demand set for temporary blip in 2019
The IEA predicts a one-year fall in coal demand as developed economies turn to renewables and gas. Asian demand will drive resumed coal demand growth from 2020, write Richard Lockhart
GLOBAL
DECLINING coal demand and Europe and the US are driving a slight fall in global coal demand in 2019 to 5.390bn tonnes of coal equivalent after two years of growth, according to the Interna- tional Energy Agency (IEA).
However, the dip will last just for one year as demand returns to slight but steady growth from 2020, held up by robust growth in major Asian markets.
The key consumers will be China, which pro- duces half of the world’s coal, nearly all of which is used in power generation.
“If China changes – everything changes,” said Keisuke Sadamori, IEA Director of Energy Mar- kets and Security, referring to the importance of government policy in influencing future coal demand and production levels.
Power generation
A 2.5%, or 250 TWh, decline in coal-fired power generation is creating weak coal demand in 2019. This drop is led by double-digit falls in the United States and Europe.
Looking ahead, the IEA predicts that electric- ity generation from coal will rise only marginally – less than 1% per year – between 2019 and 2024. This will lead to coal’s share of total power output falling from 38% in 2018 to 35% in 2024.
A key to this, even in 2019, is India’s a decline in coal-fired generation for the first time in 45 years. However, this may be because of a tem- porary dip in demand and high seasonal hydro output. The IEA expects India to return to coal growth in future, with coal generation rising by 4.6% per year by 2024. The Asian average is fore- cast to be 5% per year until 2024, led by Vietnam and Indonesia.
In China, the IEA forecasts coal power gener- ation growing between 2019 and 2024, although at a slowing rate. The fuel’s share of the power generation mix is predicted to shrink from 67% in 2018 to 59% in 2024.
Temporary decline
Coal is being slowly replaced by renewables out- side Asia.
“Wind and solar PV are growing rapidly in many parts of the world. With investment in new plants drying up, coal power capacity outside Asia is clearly declining and will continue to do so in the coming years,” said the IEA’s Sadamori.
However, he warned that any decline in coal was small and easily outpaced by demand growth in Asia.
“But this is not the end of coal, since demand continues to expand in Asia,” Sadamori added.
P4
w w w . N E W S B A S E . c o m Week 50 19•December•2019