#coal #energysecurity #climatechange #renewableenergy #fossilfuels #China #India #carbonemissions
Over two years since discussions began to diminish coal’s footprint, the fossil fuel is experiencing a resurgence. Driven by China’s quest for energy stability, escalating demand in India, the prolonged impact of the war in Ukraine, and the staggered advancement of initiatives to detach developing countries from fossil fuels, coal’s stubborn endurance is evident. Last year, coal production reached an all-time high, with the industry bracing for a lengthy relevance to counterbalance the vagaries of renewable energy sources.
Although coal prices have receded from their peak in 2022, following Russia’s incursion into Ukraine, they remain considerably high. The Newcastle coal futures currently hover around $130 a ton, significantly above the average prices observed from 2011 to 2020.
Asia’s burgeoning appetite for coal is central to this resurgence. Two decades ago, advanced economies were the primary consumers of coal. Fast-forward to predictions for 2026, and it’s anticipated that China and India alone will account for over 70% of global coal consumption. Last year, these nations, along with Indonesia, commenced operations of new coal power plants equivalent to 59 gigawatts and proposed or revived an additional 131 gigawatts, nearly the entire global tally, as per Global Energy Monitor.
As coal’s relevance persists, especially in Asia, it questions the viability of a swift transition from carbon-intensive power. Industry leaders have long defended coal’s reliability and affordability. Remarkably, coal’s resilience even garnered applause for Saudi Aramco’s CEO at a recent energy conference.
However, this development poses challenges for carbon reduction efforts and achieving global climate objectives. Despite expectations of a taper in coal production post-2013, unforeseen circumstances such as China’s power shortages and geopolitical tensions have revitalized coal demand, with output peaking at 8.7 billion tons according to the International Energy Agency (IEA).
The IEA anticipates a temporary decline in coal usage but predicts stabilization through 2026, suggesting a protracted farewell. Ground realities in China underscore the challenges of sustaining growth rates in coal production, with mining becoming more costly and dangerous.
Conversely, the surge in renewable energy adoption offers a glimmer of hope, but coal is expected to remain a crucial stopgap, especially when renewable sources are intermittent. India’s coal output is projected to surpass 1 billion tons for the first time, underscoring coal’s entrenched position in meeting energy demand amidst a tepid uptake of alternative baseload resources.
In sum, while advances in renewables signal a shift toward cleaner energy, coal’s entrenched role amid transitioning energy landscapes illustrates heightened expectations for a gradual rather than abrupt reduction in coal reliance.
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