Based on the assumption of a recovery in the world economy, a 2.6% rise in global coal demand in 2021, driven by higher electricity demand and industrial output is anticipated. China, India and Southeast Asian economies account for most of the growth, although the United States and Europe may also both see their first increases in coal consumption in nearly a decade. However, global coal demand in 2021 is still forecast to remain below 2019 levels and could be even lower if the report’s assumptions for the economic recovery, electricity demand or natural gas prices are not met (IEA, 2020).
The rebound in coal demand in 2021 is set to be short-lived, with coal use forecast to flatten out by 2025 at around 7.4 billion tonnes. This would make 2013, when global coal demand reached 8 billion tonnes, coal’s all-time peak. But while coal’s share in both the electricity mix and the overall energy mix are in steady decline, coal use in absolute terms is not set for a rapid decline in the immediate future. “Renewables are on track to surpass coal as the largest source of electricity in the world by 2025. And by that time, natural gas will likely have taken over coal as the second largest source of primary energy after oil,” said Mr Sadamori. “But with coal demand still expected to remain steady or to grow in key Asian economies, there is no sign that coal is going to fade away quickly” (IEA, 2020).
It is premature to assert that the observed decline in demand for coal-fired electricity will prevail as established by Mr. Sadamori. It is in this light that VIHK will remain poised to render support and assistance to project developers in meeting their equipment and project funding requirements.