A ton’s worth of coal has never been more expensive in human history. Global governments and utilities are willing to fork out record amounts to keep the lights on. Global leaders will face this month’s harsh reality at high-stakes climate negotiations in Glasgow as hopes for a deal to end world dependence on dirty fuels fade.
The biggest obstacle to achieving the Paris Agreement goal to limit global warming to 1.5C is coal burning. It is a “deadly habit,” according to Antonio Guterres, UN Secretary-General. Alok Sharma, the COP26 president, has urged leaders “to consign coal to history.”
Some progress has already been made — the global coal-fired power plant pipeline has dropped almost 70% since 2022. President Xi Jinping declared last month that it would cease building new coal-fired power stations abroad. Germany, however, wants to stop using coal in the next decade. More than 40 countries have also committed to no new coal.
However, the recent dramatic rise in coal prices has shown far from enough. The human race is still dependent on coal.
One reason is that coal dominates the global total electricity generation mix. As coal-power usage rises, there are more new coal plants. The International Energy Agency predicts that emissions from the power sector could surpass the record level in 2022.
According to a Carbon Brief analysis of global emissions scenarios, coal emissions must drop by about two times to meet the 1.5C target. For example, to achieve the target, coal emissions must fall by 79% between 2019 and 2030 in one of many possible pathways.
This is a huge task and made more difficult by the growing demand for electricity-generating coal. Due to a global power shortage and rising demand for coal, prices have soared to record levels, and supplies are being squeezed.
While production has been limited as the largest mining companies have pulled away from coal due to investor pressure, high prices will attract smaller private players, which means more coal is burned.
As with almost all aspects of the global economic story, the story of coal demand over the past 30 years has been about rise. The demand for cheap and easy power to build grew as the manufacturing base in the west moved east. This was needed to fuel everything, from steel plants to cities.
The U.S. has seen a halving of coal demand since 1990. This is due to power companies switching to natural gas. European demand has fallen by nearly two-thirds. China’s rapid growth easily offset these gains. China’s growth has brought its consumption to a staggering 87,638 Terajoules. This is more than half of the global demand.
It’s not just China. India currently burns more coal per capita than Europe and the U.S. combined. Miners are betting that India will continue to grow its demand for coal over the next decade, despite concerns about pollution and cheaper alternatives.
There is no better way to highlight the migration of coal from west to east than by looking at where power stations are being built and retired. Plants have been closing across Europe for decades. This has been made possible by climate policy pressure, falling renewables costs, and an abundance of cheap gas.
The U.K. was the poster child of the coal-powered Industrial Revolution. It went 67 days without burning any fuel in the last year. Spain closed seven of its 15 coal-fired plants in 2020. Half of the region’s remaining coal plants will be closed by 2030 or have already been shut down.
The European power crisis has exposed the system’s vulnerabilities. The U.K. was particularly affected by calm weather that disrupted the wind-power supply. This has exacerbated the regional gas shortage.
New constructions across Asia have helped to offset closures in Europe. China, India and Indonesia plan to build more than 600 new coal power plants. China alone has six times the coal-burning capacity of Germany and is building or planning more than 600 coal power plants.
The decade of renewable energy has been 2010. Rapid technological advances, substantial government subsidies, and falling costs have made installing huge numbers of solar panels and wind turbine forests possible.
Despite the massive renewable rollout, coal remains the preferred way to generate power. It accounts for 35% of all the electricity. While renewables have increased from 20% to 29% in the global mix over the past decade, coal has only lost five percentage points.
The single largest source of carbon dioxide emissions is coal, while the electricity sector is the biggest emitter of greenhouse gases. Global CO2 emissions saw their lowest level in a decade last year. However, this was due to a drop in demand caused by the pandemic and not a change in fossil fuel consumption. As the economy recovers and power crunches spread around the globe, global emissions are rising back.
Continue reading: Fossil Fuels Redeemed in a World Fighting Climate Change
(Michael Bloomberg is the founder and majority shareholder of Bloomberg LP, the parent company of Bloomberg News. He has committed $500 million for Beyond Carbon. This campaign aims at closing all remaining coal-powered U.S. plants by 2030.