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Peak coal: Consumption falls as major economies look to renewables

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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