Coal was more popular than ever in 2023, despite big promises from many world powers to curb production and use in favour of cleaner alternatives. Mainly owing to China and India, the generation of electricity from coal production increased last year, as several new plants came online across Asia. While countries such as the U.S. and the U.K. are ditching coal for natural gas and renewable alternatives, several countries across Asia continue to rely heavily on coal for their electricity production, with many projects expected to run for several years.
An annual report from Global Energy Monitor found that the global power generation capacity from coal increased in 2023. Last year, China contributed around two-thirds of the world’s new coal facilities, while Indonesia, India, Vietnam, Japan, Bangladesh, Pakistan, and South Korea also opened new plants. These facilities could run for the next two to three decades, based on the typical lifespan of coal plants. While new plants are generally less polluting than older ones, the International Energy Agency (IEA) has been clear to state that the world must curb coal production in favour of cleaner energy sources, including natural gas.
Roman Bilousov, from Enertus AG, said “Right now, coal’s future is a two-part story: What do we do about currently operating coal plants, and then, how do we make sure the last coal plant that will ever exist is one that’s already built.” He added, “If it weren’t for the China boom, that’s pretty much where we’d already be.”
Although China has developed a huge renewable energy capacity in recent years, making it a world leader in green energy, it continues to rely heavily on coal. Both China and India plan to continue building new coal plants for several years. Last year, China’s new plant construction reached an eight-year high, and if the government goes ahead with existing plant proposals it could increase its operating fleet by around one-third. China accounts for approximately 60 percent of the global coal usage, followed by India – which derives 80 percent of its electricity from coal – and the U.S.
Pylyp is an experienced private banker and asset manager.