IEA (2018), World Energy Outlook 2018, IEA, Paris https://www.iea.org/reports/world-energy-outlook-2018
While both coal demand and prices declined after 2014, prices started to rebound in 2016 and coal demand made a comeback in 2017.
In Europe and North America, coal demand remains under pressure due to low electricity demand growth, strong uptake of renewables-based capacity and, in the United States, the availability of inexpensive natural gas. Nonetheless, elsewhere coal demand could be more resilient than some expect, especially among developing economies in Asia.
Coal demand in 2040 in the New Policies Scenario (NPS) has been revised down by some 3% compared with last year’s outlook. Downward revisions have been made for industrial coal use, as the shift from coal to alternative fuels in industry speeds up, and in the buildings sector where coal use almost disappears. Overall coal demand for power generation declines slightly in the NPS as moderate growth in coal-fired generation is offset by improvements in plant efficiencies. Modest growth in industrial coal consumption is due in part to rising use of coal as a feedstock for a range of conversion processes, notably coal-to-gas and coal-to-liquids projects in China. Overall coal consumption flattens around 5 400 million tonnes of coal equivalent (Mtce) and does not regain the peak seen in 2014.
The supply projections in the NPS mirror trends on the demand side, implying that global coal production peaked in 2014. However, there are stark regional differences in coal production prospects to 2040. Coal production in China, by far the world’s largest coal producer, declines at an average rate of 0.4% per year over the outlook period. India overtakes Australia and the United States in the early 2020s to become the world’s second-largest coal producer behind China. US coal production is projected to drop by 30% over the period to 2040, reflecting declining domestic demand and limited opportunities to tap into export markets.
In the Sustainable Development Scenario (SDS), coal consumption decreases steeply (-3.6% per year) and coal’s share in primary energy falls below 12% by 2040. Unabated coal generation is incompatible with the long-term emissions requirements of the SDS. CCUS provides a technology option to reduce emissions of the existing coal-fired power plant fleet through retrofits in the SDS. Some 210 gigawatts (GW) of coal plants are fitted with carbon removal technology by 2040, of which 170 GW are retrofits to existing plants.