World Coal Consumption

Investment Analysis Clubs Macro Economic Trends and Risks
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From the Statistical Review of World Energy, the following list shows the amount of energy from the combustion of coal in each of the world regions for the year 2022. Units are in exajoules (EJ) of energy.

From largest to smallest…
Energy from coal, 2022

Asia-Pacific  130.50 EJ
N. America     10.51 
Europe         10.07
CIS *           4.87
Africa          3.97
S. America      1.19
Middle East     0.37
-  -  -  -    -  -  - 
Total         161.47

There is one large outlier in the list. Can you spot it?
Obviously, the Asia-Pacific region burns the large majority of the world’s coal. Coal is the worst emitter of CO2, on a per unit of energy basis, as well as on an absolute basis of millions of tons of CO2 emitted. India is included in the Asia-Pacific region, and India burns over twice as much coal as the United States. China burns 9 times more coal than the US.

A few news items from this month…

And…

Looks like CO2 emissions from coal combustion will go up, which means the atmospheric CO2 concentration will keep on rising 2 to 3 ppm each year, for the foreseeable future.

If China’s economy is truly slowing right now, as discussed in other threads, those 50 GW of new power plants may not be built all at once. But, assuming China goes into recession, and then comes out the other side, those power plants will eventually get built.

* CIS is the Commonwealth of Independent States

CIS is composed of Russia, plus most of the nations of the old Soviet Union. Ukraine is now considered part of Europe.

Americans driving Tesla automobiles or putting solar panels on their roofs, isn’t going to stop China or India from burning as much coal as they want. I’m not saying you shouldn’t buy a Tesla. If that is what you want to do, then fine. But people need to understand where the real issues lie, when it comes to greenhouse gas emissions.

  • Pete
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To some extent China, I expect, chose to get those planned coal plants “officially” on the books so that IF there are ever serious discussions of a treaty to mutually “give up” and “pay for” CO2 China has more big chips at the start of the game they can give up that cost next to nothing. I will be amazed if they actually build all of those, and a little surprised if they build any of them.

david fb

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If China’s coal consumption was flat or declining, then I could see those 50 GW of new capacity as being bargaining chips. However, coal consumption has been going up for the last 6 years. From the same source, below are the EJ of energy from coal, for each year listed.

China (excluding Hong Kong and Taiwan)

Year   Coal consumption, EJ
2012     80.72 EJ
2013     82.45
2014     82.10
2015     80.38
2016     78.03
2017     78.90
2018     80.47
2019     82.52
2020     84.25
2021     87.54
2022     88.41

Coal consumption went up throughout the COVID crisis in China. There seems to be a growing demand for that nasty fossil fuel in China, as well as elsewhere in Asia. Indonesia’s coal consumption went up 60%, just in 2022.

  • Pete
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Pete, I am very hesitant to disagree with you, but my argument is that the steady increase we see is overwhelmingly making use of already built sunk costs generating plants. (or am I wrong on that?)

I would be amazed if the Chinese did not do everything than can to “game” the system, following the glorious example of carbon fuel industries and nations everywhere.

Meanwhile, the cost of solar keeps falling, and China now has significant skills as well for nuclear and wind energy.

david fb

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Several sources say China has been building new coal-fired power plants at a high rate, so they are not just using existing power plants.

Yes, China is building solar and wind farms, nuclear plants and large hydro projects. But they still need to add more coal-fired capacity. The only thing I see slowing that down is an economic downturn that removes the need for building new power plants. Maybe the current real estate crisis will bring about a nationwide recession. But if coal consumption goes down in a significant way, it won’t be because all of the new wind and solar farms. Just the way I see it.

  • Pete
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It doesn’t help any that China’s hydroelectric generation is down YoY.

“Generation in the first half of 2023 was down by 22% compared to the same period in 2022.”
Global hydropower generation to fall in 2023, EIU report reveals.

DB2

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“In 2022, US renewable energy growth slackened its pace due to rising costs and project delays driven by supply chain disruption, trade policy uncertainty, inflation, increasing interest rates, and interconnection delays. Many of these challenges will likely carry over into 2023, creating strong headwinds.”

DB2

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@flyerboys that is true about the chips.

Bigger truth China is energy starved. China is also a leader in alternative energy.

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Just want to add a bit of nuance. From 2002-2006, China’s coal plants were running at 70% capacity. In 2022, it was at 53%. China is using coal in the same way the west is transitioning the use of natural gas, as a dispatchable energy source to support renewables. China’s newer coal plants are all designed for rapid up/down cycling. Projections are that by 2050, China’s coal plants will be running at 26% capacity, acting primarily as a peaker source.

In addition, coal plants are seen in China in much the same way as housing. Local governments build plants more to provide jobs and support companies than for any actual energy need. As a result there may be an oversupply:

More than half of the country’s large coal power firms were loss-making in the first half of 2022, according to the China Electricity Council. Analysis: China's new coal plants set to become a costly second fiddle to renewables | Reuters

Admittedly coal energy profitability depends on coal prices so these plants could at times be profitable. But from what I can see, there doesn’t seem to be a compelling economic reason to be building so many coal plants. It looks like another example of inefficiencies resulting from a command economy. Like ghost cities.

Water shortages that impact hydroelectric generation will also negatively impact coal. Coal plants are very water intensive.

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That is an interesting projection. Predicting “Peak China Fossil Fuels” could turn out to be as tricky as the way the experts once predicted “Peak Oil”. The date may be further in the future than what some people might want to believe right now. I guess the world will eventually find out.

  • Pete
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I wonder if China might stop building coal facilities due to their population having begun to decline? There is the balancing act of “more people entering middle class” and using far more energy than before, and “fewer people overall” slowing the growth of energy usage. Of course, as well reported over the last few years, China tends to overbuild because, at least until recently, there were way too many incentives in place to overbuild. Maybe they will also overbuild in the energy sector for a decade as they did with housing?

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People invest in real estate for different reasons than people invest in power plants. In the case of China, it may be more the government investing in the energy sector, through state controlled corporations. That sort of top-down control could be less prone to the excesses seen in the real estate sector. But I am definitely not an expert in the Chinese “communist” system, so this is just speculation.

One thing is clear, though. More coal is being burned every year. If yearly consumption tops out, or declines, and they still continue to build power plants, then I might conclude those power plants may not have been needed in the first place. But in this period of increasing coal consumption, the new power plants seem to be needed.

  • Pete
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I’ve read that there was substantial incentive for localities to sell property to developers because that was the primary way they could raise money for projects they wanted to do. That source of money has dried up in many regions. Similarly, localities may “lobby” for power plants in their region to bring in the large amounts of CCP money (like “federal money”) into their region. Maybe. I’m also not an expert.