According to the latest IEA’s Medium-Term Coal Market Report, the share of coal in the global energy mix will continue to increase and will even surpass oil as the most consumed energy in the world by 2017.
Although the growth rate of coal will slow from the rapid pace of the last decade, global coal consumption by 2017 stands at 4.32 billion tonnes of oil equivalent (btoe), versus around 4.40 btoe for oil. The IEA expects that coal demand will increase in every region of the world except in the United States, where coal is being pushed out by natural gas. China and India lead the growth in coal consumption over the next five years. The report says China will surpass the rest of the world in coal demand during the outlook period, while India will become the largest seaborne coal importer and second-largest consumer, surpassing the United States. In the absence of a high carbon price, only fierce competition from low-priced gas can effectively reduce coal demand. As US coal demand declines, more US coal is going to Europe, where low CO2 prices and high gas prices are increasing the competitiveness of coal in the power generation system. This trend, however, is close to peaking, and coal demand by 2017 in Europe is projected to drop to levels slightly above those in 2011, due to increasing renewable generation and decommissioning of old coal plants.