IEA reports record coal-fired power generation in 2021

In 2021, coal-fired power generation will increase by 9% year-on-year to 10,350 terawatt hours (TWh), a new record, according to a report by the International Energy Agency (IEA). The increase in coal-fired power generation was recorded for the first time since 2018, with global production declining in 2019 and 2020. The increase in coal-fired power generation came amid a rapid global economic recovery, a surge in gas futures, and a shortage in power supply, the report said. Meanwhile, coal-fired power is expected to account for 36% of the global energy mix, down 5pc from the previous record output in 2007. In the US and the EU, coal-fired power generation will increase by nearly 20% in 2021, but will be below its 2019 level. India and China will be most affected, growing by 12% and 9%, respectively – a record high for both countries. A recovery in global industrial production will also see global coal demand grow by 6% in 2021, close to the record levels reached in 2013 and 2014, the IEA forecasts. After 2021, global coal consumption will return to the pattern seen over the previous decade: declining demand in advanced economies while growing in some emerging and developing economies. “After a brief rebound in US and EU output in 2021, coal demand will once again enter a downward cycle until 2024. This is mainly driven by the energy sector, where there has been slow growth in electricity demand and rapid expansion of wind and solar photovoltaic capacity that is replacing coal-fired power,” the report noted. Meanwhile, global trends in the coal industry will be driven by India and China, the IEA states. These countries account for two-thirds of global coal consumption, despite an increasing share of renewable and other low-carbon energy sources. The agency predicts China’s coal demand growth will be 1% annually from 2022 to 2024. In India, due to higher economic growth, coal demand growth will be around 4% annually. “India’s growing demand for coal will increase demand by 130 million tonnes between 2021 and 2024. For most industrial purposes where coal is used, such as iron and steel production, there are not many technologies that can replace it in the short term. Based on current trends, global coal demand will rise to 8,025 tonnes in 2022, the highest ever observed, and remain at this level until 2024,” the IEA projected.