“Like it or not coal is here to stay…”

 GLOBE-Net, December 19, 2013

Global coal demand growth slows slightly, IEA says in latest 5-year
outlook Strong Chinese policies to reduce coal dependency seen curbing
growth, but Asian demand remains buoyant

Tougher Chinese policies aimed at reducing dependency on coal will help restrain global coal demand growth over the next fiveyears, the International Energy Agency (IEA) says in its annual recently released Medium-Term Coal Market Report.

Despite the slightly slower pace of growth, however, coal will meet more
of the increase in global primary energy than oil or gas – continuing a
trend that has been in place for more than a decade.

“Like it or not, coal is here to stay for a long time to come,” IEA
Executive Director Maria van der Hoeven said at the launch of the book.

“Coal is abundant and geopolitically secure, and coal-fired plants are
easily integrated into existing power systems. With advantages like these,
it is easy to see why coal demand continues to grow. But it is equally
important to emphasise that coal in its current form is simply
unsustainable,” she added.

Coal demand will grow at an average rate of 2.3% per year through 2018,
the new book reports, compared to the 2012 report’s forecast of 2.6% for
the five years through 2017 and the actual growth rate of 3.4% per year
between 2007 and 2012.

Chinese policies are already affecting the global coal market, Medium-Term
Coal Market Report 2013 finds. While China will account for nearly 60% of new global demand over
the  next five years, government efforts to encourage energy efficiency and
diversify electricity generation will dent that growth, slowing the global
increase in demand.

Despite its moderated demand forecast, the report does not project peak coal in China within the next five years, and the nation’s consumption and production will remain comparable to that of the rest of the world combined.

Moreover, the report notes that China has approved a number of coal conversion projects to produce liquid fuels and synthetic natural gas developments that bear watching as they could significantly reduce the country’s demand for other fossil fuels.

“During the next five years, coal gasification will contribute more to
China’s gas supply than shale gas,” said IEA Director of Energy Markets
and Security Keisuke Sadamori.

“While there are many uncertainties about
this technology, the potential scale of projects in China involving coal
to produce synthetic natural gas and synthetic liquids is enormous. If
this were to become reality it would mark not just an important
development in coal markets but would also imply revisions to gas and oil
forecasts.”

For the rest of Asia, coal demand is forecast to stay buoyant over the
next five years. India and countries in Southeast Asia are increasing
consumption, and India will rival China as the top importer in the next
five years, the report says.

Indeed, while it is true that demand growth is concentrated in non-OECD
countries, coal will not decline in the OECD but rather will remain flat
during the outlook period.

Coal use in OECD members Japan and Korea will rise by 1.3% and 3.0% per
year on average, respectively, during the forecast period, but strength in
OECD Asia will be offset by sluggishness elsewhere in the OECD.

The European coal fever prompted by the price differential between coal and
gas – as well as low CO2 prices – will prove temporary, and European
demand will fall more than 6% through 2018.

In the United States, environmental regulations will hamper construction of new coal-fired plants and bring the closure of some older ones, while increasing shale gas production will continue to encourage coal-to-gas switching.

The Medium-Term Coal Market Report 2013 is part of an annual series whose other outlooks address oil, gas and renewables. The series also features a report on the marketplace for energy efficiency.

Learn more:

To read Executive Director Maria van der Hoeven’s remarks at the launch,
please click here
To see the presentation that accompanied the report’s launch, please click here
To read the executive summary, please click here

About the IEA

The International Energy is an
autonomous organisation which works to ensure reliable, affordable and
clean energy for its 28 member countries and beyond. Founded in response
to the 1973/4 oil crisis, the IEA’s initial role was to help countries
co-ordinate a collective response to major disruptions in oil supply
through the release of emergency oil stocks to the markets. While this
continues to be a key aspect of its work, the IEA has evolved and
expanded. It is at the heart of global dialogue on energy, providing
reliable research, statistics, analysis and recommendations.

The Changing Energy Landscape will be a major theme discussed at GLOBE 2014 taking place March 26-28, 2014 in Vancouver Canada, where practical solutions and innovative emission-reducing technologies will be on display. Check here for more information.