IEA Coal report: Global Coal Use Set to Plateau through 2027

CGTN Europe

CGTN Europe speaks to Lauri Myllyvirta, senior fellow at Asia Society Policy Institute and lead analyst at the Centre for Research on Energy and Clean Air.

Transcript

00:00Global coal use has rebounded after plummeting at the height of the pandemic.

00:05The International Energy Agency, which predicts that global coal use, says it'll rise to 8.77 billion tons this year.

00:14And it's set to plateau until 2027 as more power is generated from renewable energy sources

00:21and coal consumption in China starts to level off.

00:25China is particularly important for global coal markets.

00:29One in every three tons of coal consumed worldwide is burned at a power plant in China

00:35as it continues to try to diversify its power sector.

00:39This report highlights advanced economies banning coal completely,

00:43but says demand for coal is increasing in emerging economies

00:47and coal prices are now 50% higher than the average cost between 2017 and 2019.

00:55Well, Laurie Mulliverta is from the Center for Research on Energy and Clean Air

01:00and a senior fellow at Asia Society Policy Institute.

01:03Laurie, this is pretty depressing reading, isn't it?

01:07It is for sure, especially the fact that the protection for the next years was revised up.

01:16We thought last year, the International Energy Agency thought last year

01:20that we could expect a falling trend in global coal demand over the next three years.

01:26Now, it turns out that the best case scenario looks like more of a plateau

01:31because of faster energy consumption growth.

01:36I mean, the reality is even sort of looking ahead to 2027,

01:40given the massive demand from things like data centers, cloud computing, artificial intelligence software,

01:47I mean, it really is naive, isn't it, to suggest that coal use is going to plateau anytime soon?

01:56A plateau is what we're looking at at the moment.

02:00The projections for energy demand have gone up,

02:04but the deployment of clean energy sources has also gone up very impressively over the past year or so.

02:12So now it looks very finely balanced.

02:15The IEA central scenario is for a very slow increase in coal consumption,

02:23but if you look at the uncertainty, it could just as well come down.

02:26And the main swing factor is how fast does China deploy clean energy

02:31and does China's abnormally fast electricity consumption growth normalize over the next years?

02:39The truth is stuff happens in these projections, doesn't it?

02:42Things like the Ukraine crisis change the demand on coal and suddenly it spikes hugely.

02:49All you need is another global upset like that.

02:54But that's certainly true.

02:56This is a projection, but it's a projection that captures what the structural factors are at the moment.

03:04And that's why it's still significant.

03:09But so far, the International Energy Agency has very consistently underestimated clean energy growth.

03:16And that's the main factor that could in fact make things look brighter

03:24if clean energy growth continues to accelerate in China and elsewhere.

03:29The big thing about the global economy at the moment is that in many parts of the world it's struggling.

03:34There isn't huge amounts of money for national governments to do

03:38what some might say is the right thing.

03:41And that makes infrastructure investment difficult, doesn't it?

03:46That is true when you're talking about things that governments need to spend money on.

03:53The thing about clean energy, especially solar, also wind,

03:59is that it's profitable at the current electricity prices just about everywhere.

04:06So the only thing that the governments need to do is get out of the way, speed up permitting.

04:11It makes it easier to build these things.

04:14And for most countries, that will be enough.

04:18The exception is very low income developing countries where capital is expensive.

04:24And that's where public financing from the rest of the world is needed to make it happen.

04:29Laurie, good to see you. Thank you for that.

04:31Laurie Mulliverta from the Centre for Research on Energy and Clean Energy.

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