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FAQs: Coal

Coal

How much of the world’s electricity needs are provided by coal?  Does still coal contribute to the energy mix globally?

As of 2013, coal provided approximately 40% of the world’s electricity needs. And at 29% of total world energy supply, coal is second only to oil, at 31%.

What are supercritical and ultra-supercritical plants?

Supercritical (SC) and ultra-supercritical (USC) plants produce heat that drives water above the critical point where there is no difference between steam and liquid. This marks them as different from the traditional, subcritical plants, which run below this critical point and produce a mix of water and steam. While the SC and USC plants require higher financial investments, they are more efficient, and therefore save coal and reduce carbon emissions.

Is coal production declining?

No, far from it. Since the start of the 21stcentury, coal production has been the fastest-growing global energy source. While growth in 2013 was only 0.4%, the lowest increase since 2000 in both absolute and relative terms, coal remained the fastest-growing fossil fuel. Production rose 28 million tonnes (Mt) in 2013 to an estimated 7 823 Mt. 

Will production of coal continue to increase?

Although coal was the fastest-growing primary energy source from 2000-10 at 5.5% per year, this growth is unevenly distributed. Most of the growth in coal consumption came from Asia, particularly China, while coal consumption growth in the OECD region was sluggish.

Economic growth is likely to be robust in both China and India over the medium-term (five years). Coal is the key fuel in both countries’ energy mix and since economic growth and energy use are highly correlated, coal demand prospects for both countries are bullish to 2016. This will not be offset by sluggish coal demand growth in OECD countries. Therefore, global coal demand is likely to grow at firm rates for at least the next several years. China has announced plans to increase the role of natural gas, nuclear and renewables in its new five-year plan.

What about coal consumption? 

Coal consumption increased by more than 70% from 4 600 Mt in 2000 to an estimated 7 876 Mt in 2013. Demand grew 2.4% in 2013, up from 2.0% in 2012, though slow when compared to the ten-year trend, in which the compound average growth rate was 4.6%. But demand varied significantly according to geography: OECD non-member countries’ coal demand grew by 3.6% in 2013, while OECD demand decreased by 0.6%. Coal demand in Asian OECD non-member countries increased by 4.6% to an estimated 4 959 Mt; demand in the rest of the world decreased by 1.0% (-29 Mt) to an estimated 2 917 Mt.

Are there geopolitical risks associated with coal supply?

Coal reserves and resources are widely dispersed over the globe and supply is not concentrated to a few regions only, as is the case for natural gas and oil. The key exporting countries, Indonesia, Australia, Russia, South Africa, Colombia, and the United States are politically stable. Nevertheless, the fact that around 90% of coal exports come from only these six countries suggests the need for further diversification.

How significant is China’s share in global coal production and consumption?

China’s share in global coal production is almost four times that of Saudi Arabia’s production of oil. China’s share in global coal consumption is more than twice that of the demand for oil in the United States. Overall, the Chinese domestic coal market is more than three times that of the entire coal trade worldwide. In 2011 China became the largest coal importer in the world; however, China’s coal imports make up just 5% of its total coal consumption. Therefore, any fluctuation in Chinese production and demand has the ability to have a large impact on global coal trade.