The fuel is relatively cheap most of the time, and the biggest consumers, China, the US and India, all enjoy politically safe supplies.Ĭoal-fired generation is steady and predictable, making it suitable for ensuring the minimum level of electricity a country continually needs – known as the baseload. Coal-fired power plants have long been big enough to make the building costs economically viable, with the largest plants boasting a capacity of 5GW.
The reality is that coal makes good business sense. Meanwhile, coal has lost share, down to 35 per cent from 40 per cent, but it remains way ahead of natural gas, its closest competitor, and the amount of coal that we burn for electricity has gone up overall. The percentage share of renewables, excluding hydroelectricity, has tripled and its actual generation in terawatt hours (TWh) has quadrupled. Since 2010, the percentage share of natural gas in total global electricity generation has stayed the same at 23 per cent even though the world’s power consumption has risen by about a quarter.
Yet coal seems to be resilient, if not stubborn, when it comes to its elimination. The faster we can remove coal from electricity generation, the higher the likelihood of achieving the Paris Agreement targets. Stubborn CoalĬoal has two main uses, electricity generation and steel manufacturing, with the former responsible for about two-thirds of what is consumed. That adds up to more than four-fifths of the total. Global energy consumption totalled 556 exajoules in 2020, and oil, coal and natural gas accounting for 31 per cent, 27 per cent and 25 per cent of the total respectively. The revival of world demand for energy hopefully means the world economy is recovering from the pandemic, but the surge in coal prices is a reminder of how energy still relies on fossil fuels. Prices should not therefore stay high for very long. But there are no long-term supply issues, as the main producing countries have not curtailed their production or export capacity. On the supply side, there are also some issues such as China being unable to acquire coal from Australia due to an import ban, and smaller disruptions in the export output of major producers Indonesia, South Africa and Russia. Electricity demand, which remains closely linked to coal, is expected to have increased by 5 per cent across 2021 and a further 4 per cent in 2022. The rise in prices can be attributed squarely to a resurgence of demand after the depths of the pandemic – especially in emerging Asian markets such as China and India, but also in Japan, South Korea, Europe and the US. This is almost four times the price last September. Yet in the run-up to publication, and absent from mainstream news headlines, was the steady ascent of coal prices, past US$100 (£72) per metric tonne in June and then past US$130 in mid-July to over US$170 today. At the heart of this stark warning by UN Secretary General António Guterres and the scientists behind the report was the urgent need to heavily reduce coal in the energy mix. It is only a few days since the latest report from the Intergovernmental Panel on Climate Change (IPCC) signalled the dire consequences of human-induced climate change.
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