Market Trends Are ‘Permanently Eroding’ Demand for Coal

Louise Watt for the Associated Press:

An analysis released Monday by the Institute for Energy Economics and Financial Analysis suggests coal consumption peaked globally in 2013 and is set to decline a further 2 to 4 percent in 2015 because of declining consumption by China and other big coal consumers.

The institute said China’s coal consumption had fallen 5.7 percent from January to September. In the U.S., domestic consumption was down 11 percent and coal’s share of the electricity market has fallen to 35 percent, from 50 percent a decade ago. Record-low U.S. gas prices, record expansion of renewable energy and a decoupling of electricity demand from economic growth are “permanently eroding” coal demand in the U.S., the Cleveland, Ohio-based IEEFA said.

Still, coal provides more than 40 percent of the world’s electricity and 29 percent of its energy supply, second only to oil at 31 percent, according to the Paris-based International Energy Agency. The agency projects coal consumption to continue growing somewhat in coming years, largely owing to increased coal demand in India and Southeast Asia.

Coal’s future is closely tied to China, the world’s biggest coal user, producer and importer. It burns 4 billion tons of coal a year, four times as much as the United States.

Coal accounts for nearly two-thirds of China’s energy, but in 2014 its coal consumption fell 2.9 percent year-on-year according to official statistics, or 2.6 percent according to the IEEFA report — the first annual decrease in 15 years. A revision to official Chinese data released earlier this year showed the country had greatly underestimated its coal consumption from 2000 to 2013, but still showed a dip last year.

Source : IEEFA, November 16th, 2015

URL : http://ieefa.org/market-trends-are-permanently-eroding-demand-for-coal/

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