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'Coal demand to be flat till '22; India coal-fired power output to rise 4%'

While India will be increasingly important to global coal markets, China will remain the key driver

Jyoti Mukul  |  New Delhi 

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The global demand for would remain nearly flat between 2017 and 2022, resulting in a decade of stagnation for consumption, according to the International Energy Agency's annual market report. consumption fell 1.9 per cent to 5,357 million tonnes of equivalent (Mtce) last year, the second year of decline, because of lower gas prices, a surge in renewables, and improvements in energy efficiency, according to 2017. demand dropped in China, the United States, and the European Union in 2016, but increased in India and across many parts of Southeast Asia, and shows no signs of slowing down. For instance, despite the rapid growth in renewables, Indian coal-fired power generation is expected to grow almost four per cent a year through 2022. While India will be increasingly important to markets, China will remain the key driver, said The potential for demand growth in China is limited but the country's supply-side reforms will be critical factors for prices in the coming years. Meanwhile, the European Union, accounting today for just six per cent of global demand, is set to become an increasingly marginal player. demand is down 4.2 per cent over the last two years, nearly matching the two-year decline in the early 1990s, which remains the biggest recorded drop since the started compiling statistics more than 40 years ago. By 2022, global demand is expected to reach 5,530 Mtce, the same as the average of the last five-year period.

This means that use will have had a decade-long period of stagnation. The share of in the global is forecast to decline to 26 per cent in 2022, from 27 per cent in 2016, because of sluggish demand compared with other fuels. Although coal-fired power generation would increase by 1.2 per cent per year through 2016-22, its share of the power mix would fall to just below 36 per cent by 2022, which would be the lowest level since statistics began. "The energy system is evolving at a rapid pace all around us, with a more diversifying fuel mix, and the cost of technologies going down," said Keisuke Sadamori, the IEA's director for and security. "But while everything else is changing, global demand remains the same." Criticising the report, the Institute for and Financial Analysis (IEEFA) forecasts demand growth in India at less than half that of the new forecast. "Our confidence is materially increased given Energy Minister RK Singh in December 2017 just increased India's renewables target for 2022 to over 200 Gw compared to the previous and already ambitious 175-Gw target set in 2017," said IEEFA. It forecasts Indian thermal demand will peak by 2027. The forecasts coal-fired power generation will grow four per cent per year to 2022 (three per cent annually volume growth) despite ongoing share loss to renewables. However, the acknowledges the 2016 growth of more than 2.4 per cent was just a third of the plus 6.8 per cent annual grow rate evident over the previous decade.

First Published: Tue, December 19 2017. 01:44 IST