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IEA: Coal consumption will peak between now and 2030

IEA: Coal consumption will peak between now and 2030

On October 24, the International Energy Agency (IEA) released its World Energy Outlook 2023. The report notes that projections for each fossil energy demand under the given policy scenario (STEPS) are lower than those projected in the World Energy Outlook 2022 report. This is mainly driven by factors such as current policies, downward revisions to the global economic outlook, and the ongoing impact of the global energy crisis in 2022.

The International Energy Agency (IEA) predicts that coal, oil and gas consumption will peak between now and 2030 under given policy scenarios. This has not been seen in previous reports of its kind. According to the IEA, this change highlights the growing share of low-carbon energy and electricity in meeting the world's growing energy demand, while improvements in energy efficiency are slowing the growth of energy demand.

It should be noted that the report also points out that by 2030, under the given policy scenario, even with the rapid development of clean energy, coal, oil and natural gas, these three fossil energy sources will still account for about 73% of the global energy mix.

The report predicts that global demand for fossil fuels will decrease by 3 exajoules (EJ) per year from 2025 to 2050 under given policy scenarios. Correspondingly, energy-related carbon emissions will peak in 2025.

According to the IEA, even if fossil fuel consumption declines at the predicted rate, it is still far from meeting the requirements of a net-zero emissions scenario (NZES).

The report points out that while the global demand for fossil fuels is declining, energy security still faces challenges in the process of adapting to changes in energy demand patterns.

IEA: Coal consumption will peak between now and 2030

Coal: Consumption in the two major coal-using sectors will decline

According to the report, global coal consumption has remained high over the past decade. This trend will be reversed in the coming years, driven by declining coal consumption for power generation and steel production. Power generation and steel are currently the two largest coal consumers, accounting for 65% and 16% of total coal consumption, respectively.

In 2006, coal-fired power generation accounted for a peak of 45% of new global capacity, and since then, this share has steadily declined, and by 2022, it has fallen to 11%. In 2012, new coal-fired power generation capacity peaked at more than 100 GW.

In 2022, this figure fell to 50 GW due to a rapid decline in investment in coal-fired power generation. At the same time, solar and wind power have become the main drivers of the growth of installed power generation capacity. In many countries and regions, coal-fired power plants have shifted from major power providers to standby power plants that offer flexible services. As a result, the average capacity factor of coal-fired power plants has fallen by almost 10 percentage points over the past decade compared to the previous decade.

Changes in steel production are also important factors driving the decline in coal demand. In 2003, driven by China's rapid industrialization, global coal-based steel production capacity peaked at more than 130 million tons. Eleven years later, global demand for coal for steel production peaked at more than 950 million tonnes of coal equivalent, despite continued steady growth in global steel production. Since then, the demand for coal for steel production has begun to decline. Since 2015, the increase in the share of electric furnace steel and the increase in the production of blast furnace alternatives to iron (such as natural gas-based DRI) have been the main reasons for the decline in coal demand for steel production.

IEA: Coal consumption will peak between now and 2030

Workers at the Kushiro Coal Mine, Japan's last underground mine, work at the head of the shaft

According to the report, coal demand in advanced economies peaked in 2007. China's coal demand is expected to peak around 2025 with the development of renewable energy and nuclear power, coupled with forecasts of the macroeconomic situation.

In other emerging market and developing economies, coal consumption will continue to increase as new power plants and other coal-using industries come online, but will be offset by declines elsewhere.

Source: China Coal News

Editor: Wang Yue

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IEA: Coal consumption will peak between now and 2030
IEA: Coal consumption will peak between now and 2030