After falling in 2019 and 2020, global power generation from coal is expected to jump by 9% in 2021 to an all-time high.
Depending on weather patterns and economic growth, overall coal demand could reach new all-time highs as soon as 2022 and remain at that level for the following two years.
The rebound is being driven by 2021’s rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up. The steep rise in natural gas prices has also increased demand for coal power by making it more cost-competitive.
Overall coal demand worldwide – including uses beyond power generation, such as cement and steel production – is forecast to grow by 6% in 2021. Coal prices reached all-time highs in early October 2021.
“Coal is the single largest source of global carbon emissions, and this year’s historically high level of coal power generation is a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net-zero,” said IEA Executive Director Fatih Birol. “Without strong and immediate actions by governments to tackle coal emissions – in a way that is fair, affordable and secure for those affected – we will have little chance, if any at all, of limiting global warming to 1.5°C.”
In China, where more than half of global coal power generation takes place, it is expected to grow by 9% in 2021. In India, it is forecast to grow by 12%. This would set new all-time highs in both countries, even as they roll out impressive amounts of solar and wind capacity.
“Asia dominates the global coal market, with China and India accounting for two-thirds of overall demand.” said Keisuke Sadamori, Director of Energy Markets and Security at the IEA. “These two economies – dependent on coal and with a combined population of almost 3 billion people – hold the key to future coal demand.”