There's no question that the 'greenification' of the global economy has returned many industrial countries to coal in 2021. New data from the International Energy Agency (IEA) shows that the amount of electricity generated worldwide from coal is on track to hit a record high.
IEA's Coal 2021 report says global power generation from coal soared 9% in 2021 to an all-time high of 10,350 terawatt-hours. The rebound comes amid a rash of green policies and stupid political choices, such as decommissioning oil and gas-fired power plants and fossil fuel exploitation projects, ironically resulting in an energy crisis worldwide.
"The rebound is being driven by this year's rapid economic recovery, which has pushed up electricity demand much faster than low-carbon supplies can keep up," IEA said. Also, the dramatic rise in natural gas prices forced power plants to source coal as a cheaper alternative.
Overall coal demand, including energy-intensive industries such as cement and steel, is expected to increase 6% this year. Though it shouldn't surpass the record consumption levels of 2013/2014, IEA said. It added coal demand could hit a new record high in 2022.
IEA Executive Director Fatih Birol said the increase was "a worrying sign of how far off track the world is in its efforts to put emissions into decline towards net zero."
The IEA said that China is responsible for half of the coal-fired power generation worldwide and will increase by 9% year-on-year increase.
"The pledges to reach net zero emissions made by many countries, including China and India, should have very strong implications for coal – but these are not yet visible in our near-term forecast, reflecting the major gap between ambitions and action," said Keisuke Sadamori, Director of Energy Markets and Security at the IEA.
We've discussed in-depth the transformation taking place in the energy sector where the recent ESG mania has deprived legacy fossil-fuel companies of much-needed capital (not just growth CAPEX but also maintenance), which has instead flown to "virtue-signaling" green projects that have been unreliable power sources (such as UK wind).
The biggest irony is that we're in a world deprived of fossil fuels where a green energy transition is not feasible in this decade. It'll take about $100 and $150 trillion to complete the green energy transition over the next three decades.