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AfrElec COMMENTARY AfrElec
“The region’s share of global coal power generation has climbed from just over 20% in 1990 to almost 80% in 2019, meaning coal’s fate is increasingly tied to decisions made in Asian capitals.”
The IEA said that investment conditions for coal mines were becoming more challenging. The study found that it was becoming increas- ingly difficulties to reach approval or financing for new mines.
For instance, the start of construction of the Carmichael mine in Queensland, Australia – the most prominent coal investment of 2019 – came after a process that took more than a decade.
The IEA said that coal in South Africa was at a crossroads. The government’s Integrated Resource Plan has brought broad clarity regard- ing the future of the country’s energy sector, the report found, but other uncertainties are still hanging over the coal industry.
These include the financial difficulties of elec- tricity utility Eskom, changes in coal mine own- ership, and the shift away from Mpumalanga, the country’s coal-mining heartland, to other areas.
South Africa’s demand, production and exports are forecast remaining stable until 2024, but there is still much risk and potential volatility.
Forecasts
The IEA’s forecast follows on from a November report from a group of pro-renewables think- tanks that also noted coal’s decline this year.
A briefing note from the Centre for Research on Energy and Clean Air, Sandbag and the Institute for Energy Economics and Financial
Analysis (IEEFA) found a wide range of reasons for a 3% decline in coal use as a generating fuel in 2019.
The note blamed declining generation growth in China, a sudden drop in coal power output in India and record declines in developed countries for the fall to 303 TWh.
Other reasons included rising renewables output, expanded usage of gas and nuclear power and slowing or even negative growth in demand for electricity output.
However, the decline hid hides rising coal consumption for power in Asian economies, with South-East Asia set to see a 10% rise in coal- fired power generation in 2019.
“At just 4.6% of the world’s total coal-fired power generation in 2019, the South-East Asian region is not big enough to compensate for the dramatic cuts in thermal coal use in the US, the European Union and South Korea, and the ongoing slow decline in Japan,” said report author Tim Buckley, director of energy finance studies at IEEFA.
This IEA’s report seems to agree with this forecast, although the IEA stressed that the 2019 fall was only temporary.
Indeed, the IEA’s report said that the future of coal would depend on international climate pol- icy, natural gas prices and China’s policy on coal.
Take away China and the prospects for coal are not so certain, as major developed economies move away from the polluting fuel and embrace renewables and the global community inches forward towards a common climate change strategy.
Week 50 19•December•2019 w w w . N E W S B A S E . c o m P5
