Coal Magical Thinking from the IEA
Coal demand will peak in 2023 and begin to decline in 2024 and beyond (Figure 1).
That’s the good news in a report by the International Energy Agency (IEA) issued in December. Coal is important because coal accounted for about 44% of man-made carbon dioxide (CO2) emissions in 2022. If the IEA’s forecast is right then efforts to contain climate change are making important progress.
“A historic turning point could arrive soon. The International Energy Agency’s latestIEA
projections see coal demand peaking within this decade under today’s policy
settings, primarily as a result of the structural decline in coal use in developed
economies and a weaker economic outlook for China.”
This is magical thinking. China currently has 243 gigawatts (GW) of new coal power plants under construction, or permitted for construction. One gigawatt is the equivalent of one large coal power plant.
Coal-fired capacity in China is likely to increase for the next five years Even if all plant construction were stopped today, capacity would continue to increase through 2026 (Figure 2).
“China has continued a coal power plant permitting spree that started in 2022. The first half of 2023 saw 52 gigawatts (GW) of new coal power permitted, maintaining the previous rhythm of permitting two coal power plants per week.”CREA
The IEA acknowledges that new coal plant openings and approvals are substantial but argues that most of this is to maintain base-load and peaking demand.
“The key to this development is a steep upward trajectory in renewable generation, which grows faster than electricity demand. We assume that hydro availability rebounds after a two-year low, and that the accelerating growth in wind and solar capacity bears fruit.”IEA
The U.S. Energy Information Administration (EIAEI) presents a very different picture about coal use in its recent International Energy Outlook 2023. The EIA expects world coal consumption to increase slightly (+349 million short tons) by 2050 (Figure 3). China consumption will fall the most (-864 short tons) but will be nearly offset by India’s increase (+806 short tons). Other Asia-Pacific consumption will rise almost as much as India (+666 short tons).
Most of the world’s coal consumption is for generating electric power. That is why there is so much climate-related emphasis on replacing coal with renewable sources of electricity. IEA states in Coal 2023 that,
“The backbone of our estimate is the rise in renewable generation exceeding growth in electricity demand.”IEA
Once again, the EIA presents a very different view. It expects that coal consumption for electric power generation will increase slightly in spite of an a substantial increase in renewable energy capacity of almost +3% per year (Figure 4).
The EIA published its coal report one month before the IEA published Coal 2023. Why wouldn’t the IEA have at least referenced the obvious and glaring differences?
To make matters worse, I compared IEA’s estimates for 2022 coal production and consumption from Coal 2023 and its World Energy Outlook 2023 (WEO 2023) published a month earlier.
2022 historical coal consumption was 8,415 million tons in Coal 2023 but only 5,807 million tons in WEO 2023. Historical coal production for 2022 was 8,582 million tons in Coal 2023 but only 6,122 million tons in WEO 2023 (Figure 5). Those discrepancies are 45% for consumption and 40% for production.
It is possible that the discrepancy in consumption/demand may be between primary and delivered use although that is not stated. Production is more difficult to reconcile.
Coal is the single most important contributor to man-made CO2 emissions and is, therefore, central to efforts to address climate change and related environmental and ecological damage. Although the IEA acknowledges the uncertainty in its forecast and recognizes the serious climate-change challenges ahead, its headline conclusions will not be taken that way. Coal 2023 will be interpreted to mean that coal emissions are under control or will be in the near future.
It is irresponsible and dangerous for the IEA not to present the credible counterpoint to its position that coal consumption and supply will decline beginning in 2024 that the EIA provides.
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