The International Energy Agency (IEA) says worldwide demand for coal will not grow significantly over the next five years. It sees worldwide coal demand in 2021 roughly at the same level as in 2014. In a report published on Monday (12/12) the agency says it detects rising demand for renewable energy sources (at the expense of coal) in Europe and North America, while in China coal consumption is also expected to stagnate. However, the IEA believes that coal will remain the most important energy source as it is cheap and easy to produce.
Although coal consumption in China is expected to fall in the years ahead due to the country's new economic growth model and diversification of coal, the IEA believes China remains the largest coal consumer over the next five years. Coal demand in China is expected to decrease (slightly) from 2.896 billion tons of coal equivalent in 2014 to 2.816 billion tons by 2021. Whether the IEA's forecasts come true largely depends on developments in China as this nation accounts for about 50 percent of the world's total coal demand.
While the IEA sees coal demand in advanced economies and China declining, it sees coal demand growing in India and Southeast Asia where nations seek a cheap solution for power generation. Nations like Indonesia (with large populations, expanding middle classes, and rapidly growing economies) need to meet increasing power demand at home.
Overall, coal demand will only grow modestly over the next five years. The IEA projects global coal consumption in 2021 to reach 5.63 billion tons of coal equivalent, just above 2014 levels (5,400 billion tons). This would imply a 0.6 percent average annual growth between the years 2015-2021 (down from a 2.5 percent annual average growth over the past decade).