Global coal demand is projected to grow by a slight 177 million tonnes coal-equivalent (Mtce), from 5.36 billion (Btce) in 2016 to 5.54 Btce in 2022, according to the International Energy Agency’s (IEA) Monday report.
"Coal’s share in the global energy mix is forecast to decline from 27 percent in 2016 to 26 percent in 2022,” the IEA said in its market report entitled Coal 2017.
The IEA noted that global demand for coal fell by 1.9 percent in 2016 to 5.36 Btce, adding that low gas prices, a surge in renewables and energy efficiency improvements were the main reasons for this decline.
In global terms, "coal-fired power generation increases by 1.2 percent per year in the period 2016-22, and its share of the power mix falls to just below 36 percent by 2022, the lowest level since IEA statistics began," the report read.
Remaining key for the coal market with 49 percent of global consumption and 46 percent of global production, China’s coal demand declined by 4.7 percent for the third consecutive year in 2016.
"As coal use in the industrial and residential sectors falls due to efforts to improve air quality, China’s total consumption is expected to decline by 0.1 percent per year to 2,787 Mtce in 2022," the report said.
Additionally, the report said that prices will continue to depend largely on China and as a consequence, the structural reform of the Chinese coal industry is key to the evolution in coal prices.
While the United States remained the third largest coal consumer in the world, its overall consumption declined by 7.5 percent in 2016. Moreover, coal was not the largest source of electricity for the first time, as mainly renewable generation and gas generation replaced it.
“In the Association of Southeast Asian Nations countries, coal demand increased 6.2 percent in 2016, driven by coal-fired electricity generation,” the report added.
By Firdevs Yuksel