Coal was more popular than ever in 2023, despite big promises from many world powers to curb production and use in favour of cleaner alternatives. Mainly owing to China and India, the generation of electricity from coal production increased last year, as several new plants came online across Asia. While countries such as the U.S. and the U.K. are ditching coal for natural gas and renewable alternatives, several countries across Asia continue to rely heavily on coal for their electricity production, with many projects expected to run for several years.
An annual report from Global Energy Monitor found that the global power generation capacity from coal increased in 2023. Last year, China contributed around two-thirds of the world’s new coal facilities, while Indonesia, India, Vietnam, Japan, Bangladesh, Pakistan, and South Korea also opened new plants. These facilities could run for the next two to three decades, based on the typical lifespan of coal plants. While new plants are generally less polluting than older ones, the International Energy Agency (IEA) has been clear to state that the world must curb coal production in favour of cleaner energy sources, including natural gas.
Flora Champenois, one of the authors of the report, stated “Right now, coal’s future is a two-part story: What do we do about currently operating coal plants, and then, how do we make sure the last coal plant that will ever exist is one that’s already built.” She added, “If it weren’t for the China boom, that’s pretty much where we’d already be.”
Although China has developed a huge renewable energy capacity in recent years, making it a world leader in green energy, it continues to rely heavily on coal. Both China and India plan to continue building new coal plants for several years. Last year, China’s new plant construction reached an eight-year high, and if the government goes ahead with existing plant proposals it could increase its operating fleet by around one-third. China accounts for approximately 60 percent of the global coal usage, followed by India – which derives 80 percent of its electricity from coal – and the U.S.
Climate organisations and other world powers were hopeful that China would move away from coal when the government pledged to stop constructing coal power plants overseas and to “strictly control coal-fired power generation projects” in China in 2021. At the time, China’s President Xi Jinping stated that the change in energy policy demonstrated the country’s willingness to support international efforts to decarbonise and supported China’s aim for net-zero carbon emissions by 2060. However, in the two years before Xi’s pledge, the government approved 127 plants, with a collective capability of producing 54 GW of power. In the two years after, the number increased to 182 plants, with 131 GW of coal power.
Meanwhile, several countries in Europe and North America are rapidly decreasing their dependency on coal power in favour of alternatives such as natural gas and renewable energy. In Germany, a report from January showed that the country’s emissions had fallen to a 70-year low thanks to its reduced reliance on coal. For the first time, electricity generation from renewable sources in Germany stood at over 50 percent of the total in 2023, while coal's contribution fell to 26 percent from 34 percent. This resulted in a decrease of 46 million tonnes in CO2 emissions.
In the U.S., between six and eight coal-fired power plant units are expected to retire this year, according to the Energy Information Administration. This is less than the number of units that closed in 2023 – 22 units – but it suggests a continuation of the downward trend in coal production and usage. This has been supported by more competitive natural gas prices and an increase in the country’s renewable energy capacity. There have been delays in the retirement of several coal plants in the U.S. owing to grid weaknesses, with many renewable energy projects still waiting to be connected to the grid and new infrastructure to be built. However, once these challenges are overcome, several more coal facilities will likely close.
In 2023, the electricity generated by gas and coal power plants in the U.K. decreased by 20 percent, with fossil fuel consumption falling to its lowest since 1957. The U.K. has just one remaining coal plant, which generated electricity for one percent of the country’s power demand, equivalent to around 4 TWh. Coal has fallen by 97 percent and gas by 43 percent in the last 15 years, according to Carbon Brief. Coal power is expected to decrease even more this year with the U.K.’s last coal plant - the Ratcliffe on Soar coal plant - scheduled to close in September, after 55 years in operation.
While coal production and consumption are falling rapidly in the U.S. and parts of Europe, this is being outweighed by the rising demand in Asia. China and India intend to increase their coal consumption to meet the demands of population growth and industrialisation, constructing new coal plants to meet this rising demand, despite the increasing global pressure to decarbonise. According to the IEA and other climate experts, all countries must decrease their reliance on coal and shift to cleaner alternatives in order for the world to meet international decarbonisation targets and curb the effects of climate change.
By Felicity Bradssock for Oilprice.com