While some countries are closing fossil-fuel power plants and shifting policy towards cleaner energy sources, others are upping the contribution of coal to their power sectors.

A recent analysis of the global coal industry by the International Energy Agency highlights the growing number of countries adopting climate policy goals that facilitate the move away from coal. But despite growing awareness of the impact of climate change and a number of high-profile divestments away from fossil fuels, global demand for coal remains strong.

Growing demand for coal

Following two years of decline, expanding economic growth resulted in coal demand rising by 1% in 2017 and this trend is expected to continue, the report says.

Image: International Energy Agency

Coal power generation grew by 3% in the year to 2017 and kept its share in the power mix at 38%, after a downward trend over the last few years.

Demand is expected to stabilize over the next five years, however, as declining coal use in North America and Europe offsets growth in markets like India and China.

India saw the largest annual demand growth, reaching 3.9%, but a large-scale boost to the nation’s renewable energy sector should help slow it down in future, according to the report.

Currently, China accounts for nearly half of the world’s coal consumption. But anti-pollution policies, along with the country’s commitments to developing renewable energy alternatives, could see its demand for coal grow at a slower rate in the coming years.

Elsewhere in Asia, coal is seen as an affordable and abundant resource and the report forecasts growing demand in Pakistan and Southeast Asian nations like Indonesia, Vietnam, Philippines and Malaysia.

But change is in the air. The growth of renewable energy sources and natural gas is set to reduce coal’s contribution to the global energy mix from 27% to 25% within five years.

‘A tale of two worlds’

Keisuke Sadamori, the IEA’s Director for Energy Markets and Security, said: “The story of coal is a tale of two worlds with climate action policies and economic forces leading to closing coal power plants in some countries, while coal continues to play a part in securing access to affordable energy in others.

“For many countries, particularly in South and Southeast Asia, it is looked upon to provide energy security and underpin economic development.”

While many European countries like Sweden, France and Denmark are accelerating their transition to renewables, it’s a different story in much of Eastern Europe, with new coal-fired plants being constructed in Poland, Greece and the Balkan states.

The divide between countries phasing out coal and those seeing increasing demand for it makes agreeing global controls on fossil-fuel power generation and emissions levels difficult.

Approximately two-thirds of global greenhouse gases are the result of energy production and consumption. Fossil fuels currently account for more than 80% of the world’s energy mix, a figure that has remained unchanged for three decades.

While some countries are leading the charge towards clean energy, the transition needs to be made inclusive, sustainable, secure and affordable to all.

The World Economic Forum’s System Initiative on Shaping the Future of Energy is exploring new approaches that would reduce emissions while generating enough power to meet growing demand. These include innovation, partnerships between the public and private sectors, and effective policies that support solar, wind and other clean energy sources.