World’s Largest Coal Consumers Unlikely to Ditch Fossil Fuel Soon

World’s largest coal consumers, namely China and India, set ambitious renewable energy goals, experts assert that their expanding economies will maintain a substantial demand for coal. 

China, the largest global energy consumer, and India, ranking third, are pivotal consumers of coal to propel their economic growth.

The International Energy Agency (IEA) projects that China’s share of global electricity consumption, with 60% generated from coal, will rise to one-third by 2025, a significant increase from a quarter in 2015. 

Meanwhile, India’s growing economy, driven by Tortoise Capital’s Rob Thummel, emphasizes the continued significance of coal in meeting the country’s escalating energy demands.

Ian Roper, a commodity strategist at Astris Advisory Japan KK, notes that if economic growth persists in India and China, coal demand will remain a global fixture. In 2023, global coal usage hit a record 8.5 billion tons, driven by robust demand in emerging countries like India and China, according to the IEA.

Contrary to the global trend, the United States, the second-largest coal consumer, witnessed a 62% reduction in daily coal consumption, dropping from 2.8 million to 1.1 million tons, according to the Institute for Energy Economics and Financial Analysis.

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Coal Challenges Amid Renewable Ambitions

world's-largest-coal-consumers-unlikely-ditch-fossil-fuel-soon
World’s largest coal consumers, namely China and India, set ambitious renewable energy goals, experts assert that their expanding economies will maintain a substantial demand for coal.

While these trends reflect a setback in emission reduction efforts globally, with carbon emissions from fossil fuels reaching record levels, China and India face intensified scrutiny due to their growing coal consumption. The two nations, however, are committed to aggressive renewable energy targets.

India aims to derive 50% of its electricity from renewables by 2030, making progress with renewables currently contributing 22% to its power generation. 

Nevertheless, 75% of India’s power still comes from coal-fired plants, with plans to add 80 gigawatts of coal-based thermal capacity over the next eight years.

China, despite being a renewable energy leader, relies on coal for 61% of its power generation. The country has ambitious plans to become carbon neutral by 2060, but the intermittent nature of renewables compels it to consider coal as a critical fallback option.

China’s experience of power shortages due to weak hydroelectric power and India’s reliance on coal during periods of reduced hydro generation highlight the challenges posed by the intermittency of renewables. 

Even in October, when coal’s share of electricity generation in India rose to 80%, compared to 73% in 2022, due to lower-than-usual monsoon rains affecting hydro generation, coal emerged as a crucial energy source.

Experts, like Ian Roper, predict that China and India will continue to heavily depend on coal for primary power generation for at least the next decade, emphasizing the persistent role of coal in their energy landscapes.

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