Coal demand shifts to Asean

SINGAPORE: Global growth i n coal demand ground to a halt last year for the first time in two decades, but Southeast Asian countries and India are keeping the dirty power burning despite calls to switch to cleaner energy, the International Energy Agency said yesterday.

The share of coal is seen dropping in the energy mixture of China, as demand levels off amid slower economic growth there, the IEA said in a report.

Renewable energy sources such as hydro, wind and solar power may be playing an increasing role in meeting global demand while coal capacity shrinks, but Asean and India are “remaining centres of significant coal growth”, the report said.

Those centres saw demand increasing by 112 million tonnes in 2014 — compared with a falloff in coal demand in the highly-developed OECD area of 47 million tonnes.

Oil rarely competes with coal, but gas, the price of which is linked to oil, has emerged as an alternative to coal amid falling crude prices, while gaining market share in some countries, including the United Kingdom, the report noted.

Coal was the bedrock on which Britain’s Industrial Revolution was built — but the country’s last mine, at Kellingley in Yorkshire, closed on yesterday, ending an era.

Coal’s share of power generation in Britain remains at 20.5% — imports will fill the gap — down from 28.2% in 2014, according to UK government data.

Lowering its world demand forecast by more than 500 million tonnes of coal-equivalent (Mtce), the IEA said that “the golden age of coal in China seems to be over”.

It added that while China’s share of coal in its energy output would slide from 29% to 27% by 2020, India alone would account for half of global demand growth, with Asean states accounting for half the remainder.

But there is scant evidence the relative Chinese falloff in coal is from any commitment to cleaner energy use in the wake of the Paris conference.

Rather, the slide looks largely like a consequence of weaker output for energy intensive sectors such as steel and cement.

The report added Beijing had little scope to slash coal’s share “given that gas and oil power generation is very limited in China”, which uses half of global coal. It did, however, highlight China’s attempts “to diversify away from coal to achieve a more energy-efficient economy and to address local pollution”.