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Peak coal: Consumption falls as major economies look to renewables

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Peak coal may have already been reached. A new report released overnight says that the use of thermal coal in power generation across the world may have fallen as may as 4.6 per cent in 2015, as the world’s biggest economies turned towards renewables such as wind and solar.

The report by Greenpeace International may be mocked by the fossil fuel lobby, but its data reveals an inconvenient truth:

“This year is on course to see the largest fall in coal consumption in history. There has been a drop of at least 2.3 per cent and possibly as much as 4.6 per cent in the January-September period, compared to the same period a year ago.”

This, Greenpeace notes, follows the levelling off of global coal use in 2014.  “(It) creates a nightmare scenario for the coal industry.”

As Tim Buckley writes in a separate piece today, many in the fossil fuel industry continue to insist that the thermal coal industry holds great promise. But much of this is wishful thinking.

Even the Coalition government, accused of preventing the removal of fossil fuel subsidies which could affect financing for 1,000 new coal plants, declares a “moral” imperative to mine thermal coal.

This, of course, was accompanied by the applause of The Australian newspaper, who put the latest claims by climate contrarian Bjorn Lomborg on its front page again, and whose legal editor on Tuesday lamented the legal challenge to the Adani coal project in the Galilee Basin:

“One of the great obscenities of our time is the fact that the law of Australia is about to weight the welfare of millions against the welfare of a God-forsaken bird,” Chris Merritt wrote. Damn Mother nature! How dare it impede the fossil fuel industry!

But environmental organisations are taking such actions, not just for environmental outcomes, but also to save the coal industry from itself. It simply refuses to believe that the thermal coal industry is in danger of decline.

“Coal is in terminal decline, and those countries investing in coal for export markets are making reckless decisions,” says Lauri Myllyvirta, coal and energy campaigner for Greenpeace.

“They will be scarring the landscape and damaging the climate with little prospect of a return on their investment,”

This graph illustrates why. It shows major declines in key markets such as China and the US are overwhelming smaller increases in India, and the rest of the EU (mostly eastern European states).

greenpeace coal consumption

China – which has consumed half the world’s coal in the last decade, has been adding one coal-fired power plant a week, but also idling just as many, with the end result that coal consumption – the cause of so much pollution in the major cities – is now declining.

After a decade of near double-digit growth, coal use in the power sector was down more than 4 per cent in the first nine months of this year. Imports dropped 31 per cent in the same period.”

greenpeace coal consumption china global

“China’s power sector has reached a ‘green tipping point’,” Greenpeace says. Since the end of 2013, China’s electricity consumption growth – equivalent to Australia’s entire power consumption – has been entirely covered by growth in power generation from renewable sources.

Meeting the capacity targets set for different energy sources for 2020 will enable all of the projected new power demand to be covered from non-fossil energy growth.

In the US, consumption of coal for power generation fell by 11 per cent in the January-July period in 2015, as renewable energy and gas displaced coal in power generation, and significant amounts of coal-fired capacity closed down.

In all, more than 200 coal-fired units, with a total generating capacity of 83GW, have been scheduled for retirement. These announcements are starting to materialise in 2015, with 13GW expected to retire this year.

In India, Coal India’s coal sales grew 7 per cent year-on-year, but the growth in imports has slowed from 20-30 per cent in the past years to approximately 7 per cent in January-August. And much of the growth in coal supply has ended up in coal stockpiles. Generation from imported coal is now more expensive than solar projects.

In Europe, the UK has cut coal use for power generation by 16 per cent this year, and it plans to cease all coal-fired power generation within a decade to 15 years. Germany, often wrongly accused of increasing coal generation, has in fact cut coal consumption by 2.8 per cent in the first half of 2015, after a 5 per cent fall in 2014.

greenpeace coal EU

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  • Evan A

    A minor point, but why is Japan’s coal use down? I thought it would be surging with many of their nuclear reactors closed.

    In any case, if this trend is true – a decline even without pollution externalities being priced, let alone priced accurately – it’s a real glimmer of hope amongst a pretty bleak prognosis for greenhouse gas emissions.

    • JeffJL

      Cheap gas?

    • Paul Wittwer

      The graph is for the first half of 2015. Fukushima was way back in 2011.

      • Evan A

        Am aware of when Fukushima occurred. They suspended many of their reactors indefinitely after it. The government were talking about cranking them up again but there has been pretty significant public resistance (which is very atypical of Japanese). During our last visit in May I was told the local reactor (Toukai Tepco) was still out of action.
        Interestingly, because the ‘compensation’/kick back payments are pretty generous for people living in the immediate radius, many of them want them restarted. People close but outside of this demarcation, unsurprisingly, are dead against it.
        I’ve also noted Japan are coming out with very unambitious climate targets which concerns me that their plan b for maintaining centralised power is coal. The feed in tariff has triggered rapid deployment of solar but, like Australia, the utiliites are putting up hurdles to connections. Many of the mass market project homes have solar as a standard part of the design and JR are filling their rail verges with PV – both awesome changes to see.

    • Jacob

      Japan has restarted a nuclear reactor.

  • trackdaze

    I think japan has restarted some of its nuclear capacity after idling it. Me, give me nuclear over coal or gas anyday.

    Business of all ilk love growth. Without growth many mature businesses will strangle themselves in cost cutting and naval gazing.

    • rick

      Nuclear is a bad idea,what do you do with the waste, we all say not in my backyard is what I say. Now take agood look at molten salt as a large scale storage system that can be upscaled to provide load levaling and best of all night time electricity. WE NEED THE Australian banks to get on board rather than blindly following because they do not employ the right consultants that look into OTHER means of supply. If other people will not do the process of making themselves more knowledgeable in many varied dicipines then do it your self and then diseminate this knowlege your self just becarefull to check your facts are correct and as up to date as possible.

    • Richard Mason

      How would you calculate the real cost and risk of nucler when the huge decomissing costs are in future billions and trillions of dollars and usually the owners can’t afford to pay it and tax payers foot the bill and ten to twenty years to do so
      And dosent seem to be factored into the energy cost

  • john

    Both China and India need more energy however both are aggressively taking up wind and solar in China and Solar in India.
    Now there are some shortcomings no doubt in both countries however it is very clear that neither wish to use more coal.
    I would expect India particularly is about to use solar and hydro storage as to China the use of wind not solar except for home consumption will be the outcome.
    As to new build coal powered plants in India and coal from Australia I honestly find that a hard rock to crack.
    The cost is too high.
    Time no doubt will tell.

    • Jacob

      As time goes by, the price of solar panels crash further along with batteries.

      Not to mention the efficiency of solar panels, so with 340W panels you need less roof space than with 250W panels.

      We will get 400W panels soon.

  • Humanitarian Solar

    Blaming mining companies when consumers already have the choice to choose green energy from the grid or install their first roof of solar panels/storage. The consumer buys the coal. Supply and demand. Why blame anyone else? Because intellectuals focus on the big picture.

  • Zach

    They closed in 2012. This is year over year and actually some are restarting.

  • Ian

    Climate summits have been amazing at promoting climate change awareness . Name and shame is the way to go. I wonder how sensitive China and India are to the disapproval of peer nations. perhaps their governments will work on their coal stats even more to out-do other countries in greening their power source. At the moment India is the bad boy with their increased consumption of coal and they just can’t offset the bad press with pleading poverty.

    • Jacob

      Beijing has shut down its coal power stations to cut pollution.

      I very much doubt the people of Delhi want to choke on pollution either.

      Make no mistake, coal power stations in Delhi will be shut down soon.

      You cannot have a huge number of coal power stations built without chocking the population.

  • rick

    Japan has increased its solar energy supply internally, it is almost impossible to buy Japan manufactured solar panels since Fukashima, not hard to guess why and anyone proposing the use of nuclear should be made to go live next door to this plant. Stupid idea this nuclear stuff.

  • Ken Dyer

    There is no doubt that despite the posturings of the coal industry, the hubris of the Murdoch press, and the intransigence of the Federal Government, coal is in terminal decline.

    This has been known for many years, and has been the subject of many energy models. Simply, as a result of technology, coal overcame the use of wood as a primary energy source in the late 1800’s, oil in turn overcame coal in the early 1900’s, and gas and nuclear technologies came into being during the 20th century.

    Now technology, with ever improving sophistication, innovation and application is harnessing the power of the sun in numerous ways. The reason that major economies are looking to renewables is simply that the innovations brought about by renewable energy will overcome the economic growth stagnation that epitomises the lack of innovation and technology in the fossil fuel industries, particularly coal.

    As Dr. Cesare Marchette explained in an article in the New Scientist in May 1985 (Swings, cycles and the Global Economy), global economic growth is inextricably linked and driven by primary energy inputs, including subsets of innovation and technology. It could be said that the current focus on coal in Australia is the primary reason why economic growth is so sluggish. Australia’s future rests with the wholehearted embrace of renewable technologies.