The International Energy Agency (IEA) has published its annual report on world coal demand and consumption and discovered that it made a mistake in its predictions: The peak in global consumption of the polluting fossil will not be in 2023, but perhaps in 2027 (barring new forecast errors). But while in the USA and Europe it seems that the peak has actually been reached and the decline has begun, in China and some emerging economies consumption is increasing strongly enough to increase consumption. on a global level.

We have a big problem with electricity

Coal 2024, the new edition of the IEA’s annual coal markets report, which analyzes the latest trends and updates medium-term forecasts, shows global coal use is recovering strongly after collapsing at the height of the pandemic. It is expected to reach 8.77 billion tons in 2024, which is a new record. According to the report, demand is expected to remain at this level until 2027 as renewable energy sources play a greater role in electricity generation in China and coal consumption stabilizes.

The electricity sector in China is particularly important to global coal markets: One-third of every tonne of coal consumed globally is burned at a power plant in the country. In 2024, China continued to diversify its energy sector, continuing to build nuclear power plants and accelerating massive expansion in solar PV and wind capacity. This will help limit increases in coal consumption by 2027, according to the report.

Global energy demand is increasing

In some countries, electricity use is growing rapidly due to a combination of factors such as the electrification of services such as transportation and heating, increasing demand for cooling, and increasing consumption by emerging sectors such as data centers. Additionally, weather conditions may cause fluctuations in coal consumption in the near term. According to the report, coal demand in China could be 140 million tonnes higher or lower than forecast by 2027 due to climate-related variability in renewable energy production.

In most developed economies, coal demand has already peaked and is expected to continue falling until 2027. The pace of decline will continue to depend on the adoption of strong policies such as those implemented in the European Union and the availability of alternative energy sources. Including low-cost natural gas in the United States and Canada.

kings of coal

Meanwhile, demand for coal continues to increase in some developing economies such as India, Indonesia and Vietnam, where demand for electricity is rapidly increasing alongside economic and population growth. Although growth in developing economies depends primarily on coal demand in the energy sector, industrial use is also increasing.

Not just China, but especially China: India is expected to be the main driver of global coal demand growth in 2024; It will reach 1.315 million tons with an annual increase of 70 million tons. While China is arguably the world’s largest coal market, the IEA expects India to maintain this position until 2027. India’s coal demand is expected to increase by 2.6 percent annually and reach 1 billion 421 million tons by 2027, with growth in all coal categories.

Coal prices today are 50 percent higher than the average recorded between 2017 and 2019. Production reached an all-time high in 2024, but growth is expected to remain flat through 2027 due to structural changes.

Predictions are very wrong

Two points to consider: First, the IEA’s completely wrong forecast suggests the same could happen with the new forecast for peak coal consumption in 2027. Second, the environmental problem continues to be China. Bloomberg journalist Javier Blas, who specializes in commodities, comments as follows:

The country, revered by some eco enthusiasts for its embrace of electric vehicles, wind turbines and solar panels, is the world’s biggest polluter. China alone consumes almost 30 percent more coal than the rest of the world. This won’t end anytime soon. Now the IEA assumes China’s coal demand will hit an all-time record every year until at least 2027. For Beijing, coal is energy security. It’s time to recognize this. And admitting that China’s promises to rapidly reduce coal consumption do not stand up to careful scrutiny.

Javier Blas, Bloomberg journalist

China is therefore adopting a kind of barbell strategy, namely the extremeization of the energy mix: a very strong pressure on renewables, but support for coal and the so-called baseload (the minimum power that must be constantly supplied to the electricity system) on coal. In addition, a program for the construction of new nuclear power plants was also given.

Meanwhile, demand for electricity is booming everywhere: for industrialization and development, with the spread of mass air conditioning in developing countries, but also, and above all, to power data centres. As I mentioned before, we are in the electric age. This frenetic growth in demand is destined to create bottlenecks and continuity risks for both production systems and civilian uses.

Energy demand in the United States is expected to grow nearly 16 percent over the next five years, according to estimates from a consulting firm in Washington, D.C.; This is more than three times the estimate from a year ago. Groundbreaking growth due to electricity supply. In America, it has increased by less than 1 percent per year for more than two decades.

New energy challenges

North America’s power grid faces “critical reliability issues” as power generation fails to keep up with AI’s growing demand, the industry regulator has warned. The North American Electric Reliability Corporation found that rising electricity consumption over the next decade, combined with the closure of coal plants, will put great pressure on grids in the United States and Canada. The shortage could cause outages during peak demand periods in both countries and will be worsened by delays in adding solar generation capacity, batteries and hybrid sources to the grid, according to NERC.

Does a future of dimming await both the developed and developing world, waiting for artificial intelligence to offer solutions?

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