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Demand from Indian power sector will upkeep global coal industry growth to 2022
India’s growing appetite for coal arising from a burgeoning coal-fired power sector will drive demand for coal globally, albeit marginally, says leading data and analytics company GlobalData.
The company forecasts that the global demand for coal will rise marginally at a compound annual growth rate (CAGR) of 0.6% from 6.9 billion tons in 2017 to reach 7.2 billion tons in 2022, supported in particular by rising demand from India.
Vinneth Bajaj, Senior Mining Analyst at GlobalData, says: “After declining for three consecutive years, global coal demand picked up marginally by 0.9% in 2017 owing to increasing demand from Russia, China, and India. Growth through 2022 will be concentrated primarily in Asia, except China. On the other hand, demand is forecasted to drop in Europe and the US. As a result of these contrasting trends, coal demand across the globe will be only marginally higher than current levels.”
Coal demand in India is expected to rise from 0.89 billion tons in 2017 to 1.2 billion tons in 2022, supported by growth in coal-fired power, with generation capacity surging from 194 gigawatt (GW) in 2017 to over 250GW in 2022.
Meanwhile, coal demand in China, which grew significantly over the last two decades as a result of huge investments into coal-fired power generation, is expected to decline slightly from 3.8 billion tons to 3.7 billion tons during the forecast period.
Bajaj adds: “Since 2016, China, which is the largest consumer of coal, is cutting down its domestic coal power capacity to reduce environmental damage. This is expected to result in a marginal reduction in demand.”
Out of the 6.9 billion tons of coal consumed globally in 2017, China accounted for 55%, followed by India (12.8%), the US (9.5%), Germany (3.1%) and Russia (2.5%). However, of the 7.2 billion tons of global demand predicted for 2022, India’s share is expected to rise to 16.4%, while China’s share is expected to fall to 51.6%.