Global electricity production from coal is on track to fall by around 3% in 2019, the largest drop on record.
This would amount to a reduction of around 300 terawatt hours (TWh), more than the combined total output from coal in Germany, Spain and the UK last year.
The analysis is based on monthly electricity sector data from around the world for the first seven to 10 months of the year, depending on data availability in each country.
The projected record is due to…
- Record falls in developed countries, including Germany, the EU overall and South Korea, which are not being matched by increases elsewhere. The largest reduction is taking place in the US, as several large coal-fired power plants close.
- A sharp turnaround in India, where coal power output is on track to fall for the first time in at least three decades.
- A flattening of generation growth in China.
The main counteracting force is from continuing increases in coal generation in south-east Asia, but demand from these countries is still small relative to the global total.
The global decline means an economic hit for coal plants due to reduced average running hours, which are set to reach an all-time low.
The record drop also raises the prospect of slowing global CO2 emissions growth in 2019. Nevertheless, global coal use and emissions remain far higher than the level required to meet the goals of the Paris Agreement.
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| 2009 fall due to GFC (global financial crisis), 2015 to China slowdown. Source: Carbon Brief |
[I fear that the slowdown in growth in coal power generation in China is mostly due to slow economic growth, and as China recovers, its coal burning will continue. That is prob'ly why the thermal coal price is once again rising]
China
In China, electricity demand growth has slowed to 3% this year, down from 6.7% over the past two years. Non-fossil energy sources have met almost all this demand growth.
The country’s demand for coal-fired power depends on the interplay between clean electricity growth and rising demand. The gap between the two, if any, is filled with coal.
This means that when electricity demand is growing strongly, coal dependence comes to the fore. With these conditions, 2017-2018 saw coal-fired power generation grow at an average of 6.6% year on year.
However, 2019 has so far seen strong nuclear, wind and hydro power generation and relatively weak overall electricity demand growth, with coal use in electricity flatlining.
At the same time, Chinese power firms have been continuing to add new coal-fired power plants to the grid at a rate of one large plant every two weeks. This has driven coal-fired power plant utilisation rates – the share of hours in the year when they are running – back down to record lows of 48.6%. This is the fourth year in a row that the Chinese national average has been below 50% – and also below the global average, which stands at 54%.
2019 has also seen the first contracts for wind and solar plants that will generate power at the same price as coal power plants, putting China on a path to renewable energy “grid parity” as those projects come online in 2020.
US
The US is on track this year for one of its largest annual declines in coal-fired power generation. Year-to-date August 2019, coal-fired power is down 13.9% compared with the same period in 2018. The month of August 2019 saw coal-fired power generation down 18.2% year-on-year.
Coal unit retirements have continued this year at near record rates. Year-to-date data shows 57 units, with a capacity of 14.0 gigawatts (GW), that are all retiring in 2019 – some 5.8% of the US coal fleet. This compares with 15.5GW (6.0%) of retirements in 2018.
India
Electricity demand growth in India has continued to slow dramatically across the first ten months of 2019. In October, electricity demand actually fell by 13.2% against the same month last year.
Collectively, power from all non-coal sources grew by about 12% in January-September, leading to a downturn in coal-fired generation that is accelerating sharply. Coal-fired generation in October fell by 19% year-on-year to the lowest level since 2014.
Heavy monsoon rains have affected industrial power demand, but as demand has continued to plummet in November, a broad slowdown in industrial output is becoming increasingly apparent. This suggests that the country’s CO2 emissions growth is slowing further from the already low annual rate of 2%, which we estimated from data for the first half of 2019.
The average thermal power plant utilisation rate in India is below 58%, meaning substantial idle coal capacity.
EU
The European Union has experienced an unprecedented 19% year-on-year decline in coal-fired power generation in the first half of calendar year 2019. This is accelerating in the second half of the year to an estimated 23% fall in 2019. Around half the fall in coal reflects the impact of new wind and solar. The other half is due to a switch from coal to gas.
The coal-gas switch has happened as the carbon price in the EU Emissions Trading System rose above €20 per tonne of CO2 and gas prices fell, pushing gas generation to be cheaper than coal throughout 2019.
Because very few new gas plants are being built in Europe, further coal-gas switching will be constrained in subsequent years. The expansion of wind and solar is increasing, however, and this will be the driving factor displacing not only coal generation, but also output from gas in the future, as long as demand growth remains tepid or negative.
All western European countries have seen big percentage falls of coal use – from 22% year-on-year in Germany to 79% in Ireland – in the first half of 2019.
There were times of zero or near-zero coal generation in many western European countries. For example, coal has been less than 2% of the electricity mix in Ireland, France and the UK, and only 6% in Spain and Italy, across the first half of 2019. The UK had two weeks in May with all its coal plants switched off for the first time since the Industrial Revolution began.
Germany has seen by far the biggest cut in coal generation in absolute terms, with both hard coal and lignite falling substantially.
[Read the full article here]
It was always likely that a pincer movement would decimate coal. On the one hand, the public's awareness of the climate emergency (and therefore politicians' willingness to act) was likely to rise inexorably as the world warmed. Record droughts, floods, heatwaves and bushfires have seared themselves into our memory. We know that the world is getting too hot, whatever the soothing lies from denialists.
Simultaneously, the costs of wind, solar and storage are plunging. 10 years ago, in the USA, electricity generated by solar cost 3 times per MWh the cost of electricity generated by (new) coal power stations. Now it costs 1/3rd. In Los Angeles, recently, a contract was signed to provide "near firm" electricity from solar at less than the cost of a new gas plant and about the same as the operating cost of coal. At that point it stops being economically rational to keep coal power stations going. And with rising awareness of global heating, the political pressure to replace coal with renewables is only going to intensify. The huge financial risk for any developer of a new coal power station, or a new coal mine, is that they will be stranded assets, unable to pay back the loans they used to get built.
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