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Coal to stay strong for coming years

Oil&Gas Materials 20 December 2021 10:48 (UTC +04:00)
Coal to stay strong for coming years

BAKU, Azerbaijan, Dec.20

By Leman Zeynalova – Trend:

Coal is still strong, and will stay strong for the coming years, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY, and Global Head Strategy Risk at Berry Commodities told Trend.

“Even that mainstream media has been calling the Death of King Coal already since decades, reality is the opposite. Coal is still strong, and will stay strong for the coming years. Demand is there, worldwide, so prices also here will stay very attractive. Whatever officially governments are stating, the market and consumers will be demanding security of energy supplies, if not coming from natural gas or nuclear, as wind-solar are not 24/7 available, coal will be playing a major role still,” he said.

The report released by the International Energy Agency (IEA) shows that even before the pandemic, coal faced a difficult outlook for 2020.

“But economic recovery in China came sooner and stronger than initially expected, with year-on-year growth resuming as early as in April. With economic recovery following elsewhere and a cold snap in December in Northeast Asia, global coal demand fell by 4.4 percent in 2020 – the largest decline in many decades but less than initially expected. The regional disparities were large. Coal demand grew by 1 percent in China in 2020 but dropped by nearly 20 percent in the United States and the European Union – and by 8 percent in India and South Africa,” said the IEA.

The analysts noted that the declines in global coal-fired power generation in 2019 and 2020 led to expectations that it might have peaked in 2018. But 2021 dashed those hopes.

“With electricity demand outpacing low-carbon supply, and with steeply rising natural gas prices, global coal power generation is on course to increase by 9 percent in 2021 to 10 350 terawatt-hours (TWh) – a new all-time high. However, coal’s share of the global power mix in 2021 is expected to be 36 percent – 5 percentage points below its 2007 peak. In the United States and the European Union, coal power generation is forecast to increase by almost 20 percent in 2021 but will not reach 2019 levels. By contrast, estimated growth of 12 percent in India and 9 percent in China will push coal power generation to record levels in both countries. Taking into account the rebound in global industrial output, overall coal demand worldwide is expected to grow by 6 percent in 2021, bringing it close to the record levels it reached in 2013 and 2014,” said the IEA.

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