Coal 2018

Analysis and forecasts to 2023

"The story of coal is a tale of two worlds with climate action policies and economic forces leading to closing coal power plants in some countries, while coal continues to play a part in securing access to affordable energy in others."
Keisuke Sadamori, Director of Energy Markets and Security, IEA


Coal is at the centre of debate on energy and climate policy.

In a growing number of countries, the elimination of coal-fired generation is a key climate policy goal while in others, coal is abundant and affordable and remains the key source of electricity. Ultimately, despite significant media attention being given to divestments and moves away from coal, market trends are proving resistant to change.

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Key Findings


After two years of decline, global coal demand grew by 1% in 2017 to 7585 Mt as stronger global economic growth increased both industrial output and electricity use. Driven by strong coal power generation in China and India, coal demand is expected to grow again in 2018.

	Consumption
India	39685
Korea	15551
Russia	10407
China 	10270
Indonesia	6311
Colombia	-2112
United Kingdom	-3510
Ukraine	-7100
Germany	-9355
United States	-16987
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In particular, global coal power generation increased by over 250 TWh, or around 3%, and accounted for about 40% of the additional power generation worldwide. Coal kept its share in the power mix at 38% after some years of decline.

Global coal demand is forecast to be stable through 2023

Global coal demand in the next five years is set to be stable, with declines in United States and Europe offset by growth in India and other Asian countries ­– though China, the main player in the global coal market, will see a gradual decline in demand. In terms of the total energy mix, coal’s contribution will decline from 27% to 25%, mainly due to growth of renewables and natural gas.

	2000	2017	2023
US	762.7742857	472.0171429	413
Europe (EU28)	450.9042857	323.2628571	280
Japan & Korea	198.1014286	293.2314286	284
China 	954.9328571	2752.49	2673
India	208.4628571	562.88	708
Southeast Asia	45.49142857	186.3328571	259
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	Coal 2017 report	Coal 2017 Forecast	Coal 2018 report	Coal 2018 Forecast
2000	3299		3299	
2001	3351		3351	
2002	3467		3467	
2003	3729		3729	
2004	4027		4027	
2005	4267		4267	
2006	4526		4526	
2007	4764		4764	
2008	4823		4823	
2009	4829		4829	
2010	5206		5206	
2011	5424		5424	
2012	5490		5491	
2013	5568		5568	
2014	5610		5610	
2015	5470		5490	
2016	5357	5357	5308	
2017		5410.57	5355	5355
2018		5445		5408.55
2019		5464		5389
2020		5483		5410.5
2021		5508.5		5432
2022		5534		5425
2023				5418
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The seaborne coal trade experienced a rebound in 2017

Chinese coal imports grew by 15 Mt in 2017, and most other large importers, including Korea, Chinese Taipei, Malaysia, Turkey, Philippines, Brazil, Mexico, Vietnam, Pakistan and Morocco had record imports. Japan, Thailand and Chile were very close to their historical highs. With such sustained demand, prices remain high.

However higher prices aren’t triggering new investments. Risks associated with climate policy, potentially stranded assets, local opposition and the memories of the last downturn have cooled investor appetite to invest in new production.

It appears that banks, insurance companies, hedge funds, utilities and other operators in advanced economies are exiting the coal business.

A tale of two Europes

Western Europe is accelerating its coal exit - action on climate change and air pollution combined action to specifically phase out coal-fired power generation, are all impacting coal demand. Along with the expansion of renewables, these policy efforts will eventually push coal out of the Western European power mix.

By contrast, most countries in Eastern Europe have not announced phase-out policies and a handful of new coal power plants are under construction in Poland, Greece and in the Balkans. Some countries in Eastern Europe are among the few places in the world where lignite remains the cornerstone of the electricity system.

	Phase-out announced	Phase-out under discussion	Phase-out not currently under discussion
Sweden	0.5		
France	1.9		
Belgium	3.1		
Estonia	4.4		
Austria	6.1		
United Kingdom	9.4		
Finland	11.1		
Slovak Republic		12.2	
Italy	13.3		
Spain		13.8	
Ireland	15.6		
Hungary		18.1	
Croatia		20.6	
Portugal	21.4		
Romania			24.7
Denmark	29.0		
Slovenia			30.9
Netherlands	34.2		
Greece			34.7
Germany		42.5	
Bulgaria			43.4
Czech Republic			54.4
Poland			80.0
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Blue skies in China?

Environmental policies, and in particular clean-air measures, are set to constrain coal demand in China. Yet for now, one out of every four tonnes of coal used in the world is burned to produce electricity in China.

This makes China power sector the largest user of coal in the world by far, and as such, any fluctuation in China’s domestic power system can push global coal demand up or down significantly.

	China hydro output growth	China power demand growth
0%	0.29	-1.27
1%	0.22	-0.85
2%	0.15	-0.42
3%	0.07	0.02
4%	-0.01	0.47
5%	-0.09	0.93
6%	-0.18	1.41
7%	-0.28	1.89
8%	-0.38	2.39
9%	-0.49	2.90
10%	-0.60	3.41
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	China	UK	France	Spain
Jul-17	5.566666667	4.508	4.709952381	5.110952381
Aug-17	6.127173913	5.253434783	5.189043478	5.473913043
Sep-17	7.117857143	5.970285714	5.744095238	6.203809524
Oct-17	8.831818182	6.389909091	5.932409091	7.240909091
Nov-17	9.628409091	6.946045455	6.406681818	7.958181818
Dec-17	10.5175	7.73575	6.86675	8.6625
Jan-18	10.70681818	6.825863636	6.388863636	7.135909091
Feb-18	9.5075	6.57645	6.2016	6.84
Mar-18	7.909090909	6.464636364	6.305090909	6.79
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Coal's engines of growth

Meanwhile, the unmatched period of coal power generation growth in India is set to continue, having grown continuously since 1974. With the Indian economy expected to grow over 8% per year to 2023 and the electrification process continuing, power demand is forecast to rise by more than 5% per year over the period.

	Coal-fired generation	Share coal (right axis)	Share renewables (right axis)
1971	32.589	49.09164859	40.97824777
1972	36.679	52.0151455	41.09563787
1973	35.956	49.39282378	38.30155503
1974	41.037	53.51861029	43.44270847
1975	44.11	51.33486954	40.55117194
1976	51.774	54.14840768	39.76258955
1977	52.426	52.99409672	47.68316351
1978	53.215	48.32060583	41.30792071
1979	56.271	49.87635281	41.26625362
1980	61.462	51.04435715	41.17881554
1981	70.743	53.45953299	36.56313761
1982	80.389	56.81924202	35.32039411
1983	87.03	57.27730429	35.51679884
1984	99.898	58.1204438	29.69438158
1985	116.039	62.35772707	28.94414411
1986	129.902	63.68650445	23.27046492
1987	152.8	68.86419152	26.08997413
1988	164.676	67.40176817	25.43303864
1989	184.975	68.05104886	26.37352935
1990	191.633	65.46363226	24.48929396
1991	214.118	67.06780765	22.80740221
1992	229.412	68.03823466	20.75265214
1993	252.784	70.053347	19.55881334
1994	264.609	67.70731782	21.21909967
1995	296.292	69.93626965	17.26053911
1996	312.234	70.47678379	15.76729394
1997	325.827	68.93212716	16.01513081
1998	336.484	66.79569867	16.70110829
1999	365.436	66.95787603	15.25807575
2000	390.233	68.49942425	13.59094803
2001	408.291	69.41705728	13.20704353
2002	426.701	69.89346472	12.05516116
2003	441.472	67.83142323	13.46942476
2004	463.005	67.69168015	14.4825005
2005	478.485	66.85963647	16.61901808
2006	516.023	66.68824892	17.54042472
2007	539.286	65.48197833	17.86418542
2008	580.654	68.32268465	16.65866544
2009	614.299	66.95911596	15.67127086
2010	657.955	67.10929874	16.12997655
2011	717.36	66.87954205	17.16888166
2012	804.508	71.53999308	15.84597313
2013	863.711	72.46602857	17.41394297
2014	963.692	74.46121989	16.29027522
2015	1032.061	75.18091159	15.55744954
2016	1104.828	74.77361387	16.19713258
2017	1133.913667	72.80937117	18.34351533
2018	1171.913667	71.3931429	19.59883098
2019	1218.913667	70.4510419	20.48738295
2020	1264.913667	69.36317281	21.5469167
2021	1313.913667	68.35786454	22.66075797
2022	1366.913667	67.47087379	23.61997121
2023	1415.913667	66.30795197	24.54157385
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South and Southeast Asia are the second engine of growth.

Indonesia, Pakistan, Bangladesh, Philippines and Vietnam have more than 800 million people combined, yet their average annual per capita electricity consumption is just one seventh of that in Europe. Increasing coal power generation, supported by new coal plants under construction, will be the main driver of coal demand growth in those countries.

	Renewables	Coal	Others
2000	64.508	79.264	226.41
2001	69.601	88.463	235.218
2002	67.733	94.675	256.495
2003	68.213	103.446	275.343
2004	69.125	111.806	295.908
2005	68.71	120.327	312.042
2006	77.154	134.854	316.995
2007	80.872	153.907	327.304
2008	88.403	150.43	343.181
2009	95.197	161.19	362.931
2010	94.562	185.024	394.818
2011	112.327	217.411	372.864
2012	128.82	245.251	380.562
2013	134.781	262.571	389.404
2014	146.152	282.285	405.901
2015	144.375	321.996	409.018
2016	181.731	341.644	408.246
2017	178.9854937	374	419.0798553
2018	192.7785134	399.285	422.230246
2019	202.8054213	424.285	431.2958786
2020	212.3058301	457.285	434.8358676
2021	221.9297434	482.285	448.2877664
2022	232.43866	507.285	462.9816405
2023	242.7004312	538.285	474.1453972
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Uncertainty for future demand

Over the past few years, uncertainty has been a major feature of the import forecast – for example imports to China have been swinging wildly from year to year. Forecasts for India are also uncertain because imports are used to balance a much bigger domestic market, with both coal production and demand growing significantly.

Despite this uncertainty, Colombia and South Africa have proved over the years that exports are more the result of domestic circumstances than the market conditions. Meanwhile, most producers in Australia and Russia are also well placed with expansion in export capacity. In the case of Indonesia and United States, we see many producers on the right side of the supply curve. This is confirmed by the price sensitivity of exports from both countries.

	Australia                                           	Colombia                                            	Indonesia                                           	Russia	South Africa                                        	United States                                       
2011	144.055	77.812	350.14	103	68.351	34.057
2012	159.153	81.74	383.901	113	75.302	51.647
2013	182.003	73.41	424.11	117	73.993	47.127
2014	194.586	85.679	408.183	132	68.246	33.713
2015	204.684	71.37	365.723	133	75.411	25.334
2016	201.303	82.12	369.576	144	68.905	17.526
2017	201.739	83.167	388.737	158	69.812	37.808
2018	201	79.93244245	400	167	68.62449561	50
2019	200.7502023	81.67200862	395	169	75.88917433	46
2020	202	81.54331307	375	173	78.24162587	44
2021	204.4187857	77.36706873	355	178	77.87270585	42
2022	206	74.76853614	343	185	78.721318	43
2023	206.7224534	77.37910662	338	193	81.1390422	44
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CCUS: The future of coal

Over the past few years, coal’s shift to Asia has resulted in the emergence of two worlds: one with coal power generation and the other without.

This has made it difficult to build agreements on coal and emission reductions. Some countries have committed to end unabated coal power generation by 2030, while in others, the end of coal generation is unlikely given the role that coal plays for securing access to affordable energy. 

Carbon capture, utilisation and storage (CCUS) is the bridge between these two worlds. However, while 2018 brought some good news in terms of policies and projects, the world’s progress with deploying CCUS remains woefully off-track with what is required for a sustainable energy future.

The IEA is committed to continue to build momentum on this crucial technology, as evidenced by this year’s International CCUS Summit, co-hosted by the IEA and the United Kingdom in Edinburgh on 28 November. The Summit contributed to significant new momentum for CCUS and the IEA will continue to support these efforts in 2019 and beyond.


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