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Energy

Column: Developing nations need help to quit coal addiction

4 minute read

Smoke billows from the chimneys of Belchatow Power Station, Europe's biggest coal-fired power plant, in this May 7, 2009 file photo. REUTERS/Peter Andrews

LONDON, July 20 (Reuters) - Coal-fired power plants are proving hard to shutdown in developing economies because they are cheap and convenient, but keeping them going is pumping out carbon dioxide at a rate far beyond the level needed to achieve net zero emissions by 2050.

Coal, which is being phased out of the power system in many industrialised nations, is still a vital fuel for generation in many developing economies and may remain so for decades to come.

Countries outside the Organization for Economic Cooperation and Development, a grouping of mainly industrialised nations, accounted for 80% of worldwide coal consumption in 2019, the last year before the pandemic, BP's annual energy report says. ("Statistical review of world energy", 2021)

If emissions from coal combustion are to be reduced and global emissions cut to net zero by mid-century, then progress towards phasing out coal-fired power in non-OECD economies is essential.

But there is little evidence that developing economies are lessening dependence on coal as power demand climbs because of urbanisation, industrialisation, rising incomes and growing populations.

OECD countries relied on coal to meet less than 13% of their total primary energy in 2020. That figure rises to more than 21% in the non-OECD outside China and 57% in China itself.

OECD countries obtained around 27 exajoules (EJ) of energy from coal, rising to 42 EJ in the non-OECD outside China, and another 82 EJ in China itself.

Chartbook: (https://tmsnrt.rs/3Bn5bkx)

In relative terms, China has reduced the share of coal in its energy mix steadily since 2007, although in absolute terms Chinese consumption rose by 1.2% a year from 2010 to 2020. In non-OECD states excluding China, consumption rose 2.7% a year.

Reduced consumption in the OECD in past decade (-18 EJ) has been more than offset by increased use in China (+9 EJ) and the rest of the non-OECD (+10 EJ).

Non-OECD countries including China consumed 124 EJ worth of coal in 2020, up from 105 EJ in 2010, 52 EJ in 2000 and 48 EJ in 1990.

COPING WITH CHANGE

For developing countries, coal-fired plants remain cheap to build and easy to add to grids that have limited capacity to cope with the intermittent generation of renewable power.

Coal is cheaper and more secure than gas, particularly when imports rely on shipments of liquefied natural gas (LNG), technically simpler and cheaper than nuclear, and more predictable than renewables such as solar and wind power.

In OECD economies, coal is rapidly being replaced by a mix of wind, solar and gas-fired generation, aided by advanced grid management with battery storage being developed as a back up.

Outside the OECD, especially outside China, newer forms of generation are spreading more slowly and coal remains in favour.

With any innovation, higher-income countries tend to be early adopters, while lower-income nations usually stick with older technology for longer. (“Diffusion of innovations”, Rogers, 2003)

Coal has become the default choice for the poor, and is set to remain so even as wealthier states shift to new technology.

If OECD countries want to cut global coal combustion faster, they must provide more technical and financial help to non-OECD counterparts to overcome barriers and adopt new technology.

For OECD policymakers and climate campaigners, the focus has been on restricting coal mine production and the provision of concessional finance to build new coal-fired power stations.

This strategy has sought to compel a shift to alternatives by raising the cost of coal generation.

But non-OECD countries need positive encouragement too, with cash and technology transfer, if they are to switch to more gas, hydro, wind and solar generation, and adapt their grids to deal with the change.

Without that kind of assistance, coal-fired generation outside the OECD is unlikely to reduce significantly by 2050.

John Kemp is a Reuters market analyst. The views expressed are his own.

Related columns:

- CO2 emission limits and economic development (Reuters, April 16)

- Global CO2 emissions far off net-zero trajectory (Reuters, April 12)

- Coal’s lingering role complicates climate change efforts (Reuters, Dec. 6, 2018)

Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.

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