New Report Warns of Coal’s Increasing Share of the Global Energy Mix

coal-outlook-ieaA new report by the International Energy Agency (IEA) says that coal’s contribution to the global energy mix is increasing and by 2017 could surpass oil as the world’s top energy source. The information was released as the organization released its annual Medium-Term Coal Market Report (MCMR).

Growing demand is being led by emerging economies such as India and China, which have big coal reserves. Coal is the dirtiest of all fossil fuels, with a very high level of carbon emissions, but lack of a higher carbon price to offset greenhouse gas emissions, which several international conventions have failed to introduce in binding agreements, have created the conditions for coal to expand.

The U.S. is swimming upstream on the coal issue as it has been replacing the stuff with natural gas, which is considerably cleaner than coal and often marketed as a transition fuel to slow down global warming until we make a complete switch to renewable energy types such as wind and solar. However, the extraction of natural gas using a method known as hydraulic fracturing is also controversial, since it is thought to pollute underground waterways with the many chemicals the process utilizes.

"Thanks to abundant supplies and insatiable demand for power from emerging markets, coal met nearly half of the rise in global energy demand during the first decade of the 21st Century," said IEA Executive Director Maria van der Hoeven. “The world will burn around 1.2 billion more tons of coal per year by 2017 compared to today - equivalent to the current coal consumption of Russia and the United States combined,” she said.

Europe has become a major destination for US coal, where it has become competitive in the power generation space due to low CO2 prices and high gas prices. But as renewable power generation increases in the continent, emission target deadlines arrive and old coal plants are decommissioned, the trend is likely to flatten out.

To make such forecasts, the report assumed that carbon capture and sequestration (CCS) will not be available during the outlook period. "CCS technologies are not taking off as once expected, which means CO2 emissions will keep growing substantially. Without progress in CCS, and if other countries cannot replicate the US experience and reduce coal demand, coal faces the risk of a potential climate policy backlash," said Maria.

Image credit: IEA

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