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New Delhi: Worldwide coal generation will fall 5 percent in 2020 to 2012 levels, marking the largest annual decrease on record, the International Energy Agency (IEA) has said in a new report. Coal use will likely bounce back in 2021, but growth in renewables will remain the lead story in electricity generation, the agency said in its first-ever Electricity Market Report. The drop in coal generation came against the backdrop of a 2 percent decline in global electricity demand due to the historic shock created by the COVID-19 pandemic, said the IEA.
Coal-fired capacity will be flat in 2020 at 2,125 GW, the IEA said. However, if developers delay new plants or if power generators move retirements forward in 2020, it could be the first year with a coal capacity decline in this century.
After experiencing its biggest decline in decades, global electricity demand is expected to rebound modestly next year, led by growth in China, India and other emerging economies, said the IEA report. With the recovery of the world economy in 2021, electricity demand is forecast to grow by around 3 percent. That would be significantly weaker than the rebound in demand of over 7 percent in 2010, the year following the global financial crisis. China will be the only major economy to see higher electricity demand in 2020. However, its expected growth of around 2 percent is well below its recent average of 6.5 percent. Other big electricity consumers, including the United States, India, Europe, Japan, Korea and Southeast Asia are all set to experience declines for the year as a whole.
Electricity generation from renewable energy – such as hydropower, wind and solar – is forecast to grow by almost 7 percent in 2020, squeezing conventional power sources. Coal-fired generation is set to fall by around 5 percent, the largest decrease on record; nuclear power generation by around 4 percent; and gas-fired electricity generation by 2 percent. Overall, CO2 emissions from electricity generation are on course to fall by 5 percent in 2020.
"Electricity has a central role in today's energy world – a role that will only increase in importance as clean energy transitions accelerate," said Dr Fatih Birol, the IEA's Executive Director. "Based on the very latest data available, the IEA's new Electricity Market Report provides fresh insights on this critical sector. Starting next year, we will publish a new edition of the report on a half-yearly basis," said Dr Birol.
The growth of renewable power generation is forecast to continue in 2021 with an increase of more than 6 percent, expanding the share of renewables in the power mix to 29 percent from 28 percent in 2020. Nuclear power is set for growth of 2.5 percent next year on rebounds in France and Japan and new plants coming online in China and the United Arab Emirates.
In advanced economies, the growth of renewables and nuclear power will continue to shrink the space remaining for fossil fuel generation. Natural gas is likely to be impacted more than coal as a result of an expected rise in natural gas prices. In emerging and developing economies, demand growth is forecast to outpace increases in renewables and nuclear power, leaving some room for coal and gas generation to expand.
The expected net result globally is that coal-fired generation increases by around 3 percent in 2021, while gas-fired plants increase output by roughly 1 percent. This would lead to a rise in CO2 emissions from the power sector of around 2 percent in 2021.
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