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World coal generation on track to increase nearly 5% in 2021, 3% in 2022

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According to Market Intelligence, December 2022

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World coal generation on track to increase nearly 5% in 2021, 3% in 2022

Global electricity demand is expected to increase by nearly 5% in 2021 and 4% in 2022 as renewables are not expanding fast enough to prevent a sharp rise in the use of coal-fired power generation, according to the International Energy Agency.

Fossil fuels are expected to capture about 45% of the additional demand created in 2021 and 40% of the demand created in 2022, the agency said in a July 15 report. Coal-fired generation could rise by nearly 5% in 2021 and a further 3% in 2022.

In May, the IEA released a report outlining a path to net-zero emissions for the world by 2050. That plan called for an end to fossil fuel investments and for coal electricity generation to decline by more than 6% per year.

"Given the distant targets set up by most countries, the impact of phaseout policies on coal power generation capacity in 2021-2022 is limited," the agency stated in its July report.

The agency expects most of the increased electricity demand to come from China and India.

The rise in fossil fuels would increase carbon dioxide emissions from the power sector by 3.5% in 2021 and by 2.5% in 2022, pushing power sector emissions to an all-time high, the IEA reported.

"Renewable power is growing impressively in many parts of the world, but it still isn't where it needs to be to put us on a path to reaching net-zero emissions by mid-century," Keisuke Sadamori, the IEA director of energy markets and security, said in a news release.

The report noted that in the European Union, the share of coal in the electricity mix bounced back to pre-pandemic levels in the first quarter of 2021. However, coal's gains in the region are expected to be short-lived as many countries have accelerated plans to phase out the fuel.

Power generators in the U.S. increased the share of coal used to make electricity as gas prices began to climb in late 2020, the IEA wrote. Coal's share of U.S. electricity generation hit a monthly low of 15% in April 2020 but peaked at 30% in February 2021. From March to May, coal generated about 20% of the electricity in the U.S., the IEA reported.