Houston — Coal-fired power generation in 2019 is expected to drop a record 3%, or about 300 TWh in total, below that in 2018, analysts said in a report Monday.
The drop in coal generation would be "more than the combined output from coal in Germany, Spain and the UK last year," according to the report authored by Lauri Mylluvirta, lead analyst at the Centre for Research on Energy and Clean Air, Dave Jones, electricity and coal analyst at Sandbag, and Tim Bucknely, director at the Institute for Energy Economics and Financial Analysis.
In the past three and a half decades, the analysis noted, only two other years had declines in coal generation - 2009 with a 148 TWh drop and 2015 with a 217 TWH drop.
Within the OECD, the drop is largely driven by strong growth in wind and solar generation in 2019, in addition to decreasing in electricity demand related to slower global economic growth and trade.
While there is growth in coal power plants, particularly in Southeast Asia, "demand from these countries is still small relative to the global total," the report said.
The largest drop in coal-fired power is coming from the US, while record falls are expected from Germany, the EU and South Korea.
In the US, coal-fired power generation was down 13.9% through August compared with the year-ago period. While year-to-date 15 GW is set to retire this year, slightly down from last year's retirement of 15.5 GW.
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"About 60% of the fall in coal came from switching to gas, as coal plants closed and new gas plants opened" in the US, the analysts said.
The analysis also noted strong drops in Japan and South Korea, where nuclear power has increased substantially and taken coal's share of generation.
South Korean coal generation through July this year was down 9.8% compared with the year-ago period, while Japanese thermal coal imports are down 3.5% through nine months of the year compared with the same period last year.
In China, electricity demand grew 3% this year, compared with 6.7% over the past two years, and "non-fossil fuel energy sources have met almost all this demand growth," the analysts said.
Chinese power firms have continued adding new coal-fired power plants, driving utilization rates 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%," the report said.
Overall, "the global average utilization of coal-fired power plants is on track to hit an all-time low this year, affecting the profitability of both existing and planned capacity," the analysis said.
The low utilization rate also "implies that the electricity they generate is more expensive, as capital costs are paid for by output during fewer running hours," it continued.
India, as well, has average utilization rates of below 58%, "meaning substantial idle coal capacity," the analysts said.
Overall in India, electricity demand growth has slowed dramatically through October this year, the analysis said, in addition "a broad slowdown in industrial output is becoming increasingly apparent." In this downturn, generation from non-coal sources grew approximately 12% this year over nine months, "leading to a downturn in coal-fired generation that is accelerating sharply."
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