BAKU, Azerbaijan, Dec.27
By Leman Zeynalova – Trend:
Coal demand will grow slower after the strong recovery of 2021, Trend reports with reference to the International Energy Agency (IEA).
IEA notes that coal will surpass the record of 2013 in 2022 and rise to an all-time high of 8 031 Mt in 2024. The increase is driven by China (+135 Mt), India (+129 Mt) and the countries of Southeast Asia (+50 Mt). In all these regions, economic growth spurs higher power demand, with coal as the central pillar of power generation.
However, increases in Asia will be offset by declines in the United States (-77 Mt) and the European Union (-102 Mt) by 2024. The overall continued increase assumes that global GDP rises at a compound average annual growth rate (CAAGR) of 4 percent from 2022 to 2024.
If the economy does not perform as expected, especially in China, it will clearly affect coal consumption. Another critical forecast assumption is gas price development, as coal and gas are the main competitors in the electricity market to fill what is known as the ‘’thermal gap’’1 (the difference between electricity demand and nuclear and renewable electricity generation).
This forecast is therefore based on market expectations expressed through forward prices. As price futures for gas are relatively high until 2024, coal’s share in the energy supply mix will be more significant than what we expected in last year’s report. The level of coal-fired generation will also depend heavily on the size of the thermal gap, which is largely determined by the rate of renewable electricity generation growth.
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