Why Coal Staged a Comeback Despite Climate Worries
Theres little doubt that avoiding the worst climate change scenarios requires phasing out power plants that burn coal, the biggest source of carbon dioxide emissions. Thats proving much easier said than done. Twice in the past decade, global consumption of coal turned downward, only to rebound, and it reached an all-time high in 2022. The problem, in short: When there are worries about keeping the lights on, noble intentions to contain global warming are set aside. 1. How reliant is the world on coal? Coal generated more than 36% of the worlds electricity in 2022, making it by far the biggest source, according to Ember, a climate think tank. (Second was natural gas, at 22%, followed by hydroelectric at 15% and nuclear at 9%.) That reflects some progress. From 2006 through 2014, coal was the source of 40% or more of global electricity generation, according to the International Energy Agency, a Paris-based organization of developed nations that aims to assure a stable worldwide market. After declining to a 35% share in 2019, however, coals role in electricity production went back up. 2. Why is coal hard to quit? Developing countries value coal as a cheap and convenient source of power they can use to modernize their economies just as Western nations did before them. In China and India, the two biggest consumers, coal use has grown almost continuously for decades: Combined, they were responsible for two-thirds of the worlds coal usage in 2022, compared with 35% in 2000. That has largely offset progress by industrialized countries, especially the US and European nations, in ramping up wind and solar power. And even those Western nations regressed. Coal-fired electricity generation increased sharply in the US in 2021, while consumption rose in the European Union in both 2021 and 2022. 3. Why did coal usage by the US and Europe turn upward again? Producers of natural gas curbed output as factories and offices shut down in early 2020 during the Covid-19 pandemic, which reduced demand for electricity. After restrictions eased in 2021, demand for power surged but gas production took a while to restart. Clamoring for a way to keep the power flowing, utilities turned to ever-available coal. Then came Russias invasion of Ukraine in early 2022. In response to European sanctions, Russia began choking off natural gas supplies to Europe, which boosted coal usage to fill the gap. 4. Could China and India cut back? In the two most populous countries in the world, theres a pressing need to meet rapidly growing power demand in the near term. In China, which uses more coal than all other countries combined, President Xi Jinping pledged that coal use would peak by 2026, and his government plans to dramatically boost production of power using renewable sources. In the meantime, officials have pressed coal miners to increase output to record volumes, and the nation is expanding its fleet of coal-fired power plants to avoid power shortages that can cripple the economy. In India, state-run NTPC Ltd., the nations largest electricity producer, resumed building coal plants in 2022 after a years-long hiatus. 5. How about other countries? In what may become a model for international cooperative action, the US, the UK, Germany, France and the EU as a whole pledged $8.5 billion to speed and smooth a planned clean energy transition in South Africa, which for now depends on coal for four-fifths of its power. Similar funding partnerships are in the works to help Indonesia and Vietnam pivot away from coal. In return for reducing its reliance on coal for electricity generation, South Africa is to receive grants, cut-rate financing and loans to help close old power plants and replace them with renewable energy. But in another sign of how difficult it can be to quit coal, South Africas government already has sought more time for the transition because its simultaneously dealing with an energy crisis that causes regular blackouts. 6. Whats the outlook? The IEA expects that demand for coal will plateau in 2023 and then begin another decline. It foresees the amount of electricity generated by coal dropping 10% annually in the EU and 7% annually in the US through 2025, with solar, wind and (mostly in Europe) nuclear power picking up the slack. Far greater strides will be necessary, however, to achieve the widely cited goal of net zero global emissions by 2050. Net zero means fossil fuel emissions are reduced to a point where other initiatives, such as planting trees or using technology to pull carbon dioxide out of the air, offset what remains. To achieve that by 2050, global coal use would need to fall 90%, and whats left would need to be handled by plants capable of capturing and storing emissions, the IEA says. (Through his philanthropy, Michael R. Bloomberg, founder and majority owner of Bloomberg News parent Bloomberg LP, supports efforts around the world aimed at replacing coal power with cleaner alternatives.) More stories like this are available on bloomberg.com 2023 Bloomberg L.P.