WCA looks at the IEA’s coal outlook in WEO 2016

30th Nov 2016

Energy access and climate goals are not competing priorities. Per the International Energy Agency’s (IEA) World Energy Outlook 2016 forecasts - informed by the climate pledges submitted prior to COP21 –cleaner coal technology demonstrates that countries can integrate environmental imperatives with the goals of universal energy access, energy security and socio-economic development.

A few weeks ago, in its flagship publication, the IEA noted that the global energy system is undergoing a transformation as countries seek to implement climate and energy policies related to the ‘Paris Agreement’.  

However, as the cliché goes the more things change the more they stay the same: when it comes to coal, the IEA sees continuous growth. This is because coal is the de-facto energy source for electrification. Since the 1980s, coal consumption has grown by over 140% in Brazil, 425% in India and 514% in China. The economic and social progress made across these countries over the same period is well-documented. As the economies of developing Asia urbanise and industrialise they will turn to coal to support the development of base-load power.

In the global context, coal continues to act as the guarantor of energy security, supplying almost 40% of total global electricity.

Supporting previous WCA analysis, the IEA finds that in Southeast Asia for example, coal promotes greater opportunities for affordable and reliable electricity. Consequently, the report forecasts coal-fired plant output in the region to reach 1000 TWh by 2040 compared to less than 300 Twh today.  In the IEA’s own analysis, coal demand in India grows by more than double in the period to 2040 and triples in the whole of Southeast Asia.

Over the coming decades the world’s energy mix will diversify to support the growing role of intermittent technologies, coal-fired capacity will expand by a quarter. Positively the IEA notes the growing transition away from outdated/less efficient to modern/cleaner coal-fired plants– The IEA forecasts that 730GW of modern and more efficient high efficiency low emissions (HELE) plants will be built by 2040.

The WCA welcomes this development as it shows how this matured industry is making the transition that will support climate goals. Increased efficiency of global coal fleet is particularly needed in Asia, where 80% of the demand is forecast.

Yes, HELE is the way to go for coal-dependent countries. However, in order to support the continued transition away from older, less efficient technology, developing economies require increased financial, technological and other kinds of investment to accelerate deployment of HELE technology.

Improved and more efficient coal plants, particularly in China will also explain helps to explain why there is a more moderate coal demand growth.

Coal will continue to be part of the energy mix for decades to come and as forecast by the IEA, HELE coal technology is the future.