Coal demand falling, IEA says

The energy system is evolving away from legacy sources as alternatives gain an edge, an annual report finds.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Dec. 18, 2017 at 6:13 AM
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Dec. 18 (UPI) -- Global coal demand is on a clear decline and its share in the power mix is on pace to fall to the lowest level since record-keeping began, the IEA said Monday.

The Paris-based International Energy Agency said global coal consumption declined 1.9 percent last year, the second year in a row for a decline. Demand, meanwhile, is down 4.1 percent over the last two years. In their annual report on coal, the IEA said global demand will be more or less even for the next five years, though sectors like natural gas and renewables are picking up.

"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," Keisuke Sadamori, the IEA's director for energy markets and security," said in a statement. "But while everything else is changing, global coal demand remains the same."

Demand for coal dropped in the leading global economies of the United States, China and in the European Union last year, but picked up somewhat in advancing economies like India. The report found, however, that will actual coal-fired power generation is expected to increase 1.2 over the next five years, its share in terms of the global mix drops to just under 36 percent, which would be the lowest level since the IEA started keeping records more than 40 years ago.

There are clear metrics for renewable energy in the Chinese and European markets. A Polish decision to cut levies to finance the development of renewable energy received consent from the European Commission last week. Poland, which has few natural resources of its own, is vulnerable to supplier nations and is caught in a tug-of-war between gas-rich nations like the United States and Russia. The IEA said coal remains the cornerstone of the Polish energy system, however.

Provisions in a tax overhaul in the United States, meanwhile, extend some incentives for coal power, though renewables also get support. U.S. President Donald Trump is a vocal supporter of fossil fuels, though wind and solar power have established organic momentum of their own.

The IEA's report said coal is getting squeezed out of the market in part because of its contribution to greenhouse gas emissions, which may contribute to global warming. Meanwhile, as technologies improve, alternatives like renewable energy are moving closer to parity in terms of cost when weighed against legacy sources of power.

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