Tagging the commodity as the "main loser" among fossil fuels globally, a recent energy report from BP Plc projects that coal will see its growth lag its competition through 2040, but remain the largest source of energy for electricity generation.
According to BP's "evolving transition" scenario, the main focus of its 2018 energy outlook and one of the six scenarios discussed in the report, coal will account for just 13% of the increase in power generation by 2040 but will continue to have the largest share in power generation, at 28%. Renewables, which will account for around half of the increase in power, will increase to 25% of the generation mix by 2040. Natural gas will have the third-largest share, at 23%.

A spate of coal plant retirements in the U.S., an environmental crackdown in China, massive price declines in renewable energy sources in India and coal phase-out movements launched by the governments of Canada and the U.K. are only a few of the major events driving the global momentum away from coal.
In the U.S., demand for coal is projected to drop to 112 million tonnes in 2040, from 358 million tonnes in 2016.
Although U.S. coal companies are finding relief in the export market, S&P Global Ratings analysts say seaborne coal offers "an uncertain and perhaps short-lived respite from coal's domestic woes."
The International Energy Agency concurred and projected that U.S. coal production will fall to 459 million tonnes of coal equivalent, or mtce, by 2040.
"Europe, the traditional market for coal from the eastern United States, continues to import less coal, while other suppliers to Europe, especially Colombia, have a more favorable cost base," the IEA wrote. It said U.S. net coal exports will drop from just under 45 mtce in 2016 to around 30 mtce in 2040.
China, which has long been the largest global coal consumer, has been drastically changing its energy profile over the past years.
In BP's report, coal consumption in the country is forecast to decline to 1.55 billion tonnes in 2040, from 1.89 billion tonnes in 2016.
"China's coal intensity declines sharply, with its overall coal consumption falling, more than offset by a large rise in renewable energy," BP said. Renewable energy, together with nuclear and hydropower, is projected to account for over 80% of the increase in China's energy demand out to 2040.
Analysts recently told S&P that China's environmental crackdown is expected to result in more closures and higher operating costs for the country's mining sector in 2018. The government plans to consolidate the coal sector to create several large mining companies by the end of 2020, each with an annual capacity of 100 million tonnes.
"Even so, China remains the world's largest market for coal, accounting for 40% of global coal demand in 2040," BP said.

A passenger airliner flies past steam and white smoke emitted from a coal-fired power plant in Beijing in February 2017. Source: Associated Press |
For India, the second-largest importer of coal, BP sees coal consumption more than doubling to 955 million tonnes in 2040, from 412 million tonnes in 2016.
Although one advocacy group says peak thermal coal use in India could be "just around the corner" due to massive price declines in renewable energy generation, IEA believes coal will remain a key player in India's power system.
IEA senior coal analyst Carlos Fernandez Alvarez told S&P that the country's rapid increase in energy demand growth means "it's a little bit premature to talk about coal peaking in India" based on its current policy scenario. BP estimates that India will account for 45% of the increase in global energy demand in 2040.
Combined coal consumption in countries that are members of the Organization for Economic Co-operation and Development, which have committed to phase out coal by 2030 to meet the Paris Climate Agreement's goals, is expected to plunge to 433 million tonnes in 2040, from 927 million tonnes in 2016, according to BP.
S&P Global Market Intelligence and S&P Global Ratings are owned by S&P Global Inc.
