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 41% of the world’s electricity needs. And at 29% of total world energy supply, coal is second only to oil's 31% share.

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.

Is coal production declining?

No, far from it. Since the start of the 21st century, coal production has been the fastest-growing global energy source. While provisional IEA figures show a slight decrease in 2014 driven by a decline in China and some exceptional circumstances such as unrest in Ukraine, the IEA sees global supply increasing at an average rate of 0.6% through 2020. This incremental growth stems from OECD non-member economies, the Medium-Term Coal Market Report 2015 reports, while falling output in OECD Americas and OECD Europe leads to an overall decline in OECD production despite increased volume from OECD Asia Oceania.

What about coal consumption? 

Global coal consumption increased by more than 70% from 4 600 Mt in 2000 to an estimated 7 876 Mt in 2013, and at a 4.2% annual rate, coal was the fastest-growing primary energy source in the ten years through 2013. But demand growth has slowed of late. Preliminary data for 2014 showed the first actual decline since the 1990s, falling 0.9%; but the main driver of that result was a reported drop in Chinese demand that is based on preliminary data. Indeed, the IEA expects slowed but continued coal demand growth, with the Medium-Term Coal Report 2015 seeing a 0.8% increase through 2020.

That outlook, which is sharply lower than previous IEA five-year forecasts, reflects economic restructuring in China, which represents half of global coal consumption. Coal demand there is sputtering as the Chinese economy gradually shifts to one based more on services and less on energy-intensive industries. New Chinese hydro, nuclear, wind and solar electricity sources are also significantly curtailing coal power generation, driven not only by energy security and climate concerns but also by efforts to reduce local pollution.

All around the world, greater policy support for renewable energy and energy efficiency – the foundation of the COP21 climate agreement in Paris – is expected to dent coal demand. But the positive IEA outlook for coal demand through 2020 is based in part on growth in India and Southeast Asia that will more than offset structural declines in Europe and the United States.

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 in oil output. As noted above, China represents half of total global coal consumption, making its share of demand more than twice that of the United States for oil. Overall, the Chinese domestic coal market is more than three times that of all international coal trade. 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 or demand has the ability to have a large impact on global coal trade.

What are supercritical and ultra-supercritical coal-fired 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. Given the higher pressure and temperature involved, the efficiency of SC and USC is much greater, as much as 45% against the 33% average for existing coal-fired capacity. While the SC and USC plants require higher financial investments, their increased efficiency saves coal and reduces carbon emissions.