Coal seen as world’s top fuel by 2020

DAEGU, South Korea—Coal will surpass oil as the key fuel for the global economy by 2020 despite government efforts to reduce carbon emissions, energy consultancy firm Wood Mackenzie said on Monday.

Rising demand in China and India will push coal past oil as the two Asian powerhouses will need to rely on the comparatively cheaper fuel to power their economies. Coal demand in the United States, Europe and the rest of Asia will hold steady.

Global coal consumption is expected to rise by 25 percent by the end of the decade to 4,500 million tons of oil equivalent, overtaking oil at 4,400 million tons, according to Woodmac in a presentation on Monday at the World Energy Congress.

“China’s demand for coal will almost single-handedly propel the growth of coal as the dominant global fuel,” said William Durbin, president of global markets at Woodmac. “Unlike alternatives, it is plentiful and affordable.”

China—already the top consumer—will drive two-thirds of the growth in global coal use this decade. Half of China’s power generation capacity to be built between 2012 and 2020 will be coal-fired, said Woodmac.

China has no alternative to coal, with its domestic gas output limited and liquefied natural gas imports more costly than coal, Durbin said.

“Renewables cannot provide base load power. This leaves coal as the primary energy source,” he said.