Latest news with #AnthonyKnutson
Yahoo
22-07-2025
- Business
- Yahoo
Wood Mackenzie sees extended ‘sunset' for costly coal power
This story was originally published on Utility Dive. To receive daily news and insights, subscribe to our free daily Utility Dive newsletter. Dive Brief: Rising electricity demand and a slowdown in the buildout of alternative sources of power generation could extend the use of coal globally and displace 2,100 GW of gas and renewables by 2050, Wood Mackenzie said in a report earlier this month. Under a high demand scenario, coal-fired power generation could peak in 2030, four years later than the analysis' 'base case' forecast. The economics and politics of coal are strongest in Asia. In the United States, coal is more expensive than gas or solar and storage, but the cost of building new gas power plants has nearly doubled and long-duration energy storage technology is not yet mature enough to convert solar and wind into true 'baseload' resources, the report said. Dive Insight: In Asia, national security concerns and economics favor coal for now, said Anthony Knutson, global head of thermal coal markets at Wood Mackenzie, although when it comes to just levelized cost, hybrid solar and storage remain cheaper than coal or gas. 'While the long-term trajectory towards renewables remains intact, the path is proving far more complex than many anticipated as countries grapple with energy security and affordability concerns,' Knutson said in a statement. Wood Mackenzie expects the levelized cost of unabated coal-fired power in the Asia and Pacific region to remain below $100/MWh in 2030, lower than the expected levelized cost of gas-fired power there. Coal-fueled power in the United States will cost about $230/MWh in the United States and about $270/MWh in Europe in 2030, according to the report. By then, gas-fired power will cost about $100/MWh in the United States and about $150/MWh in Europe, it said. Hybrid solar and storage will undercut coal and gas in all three regions, coming in around $60/MWh in Asia, $70/MWh in Europe and $80/MWh in the United States. Though the economics of gas-fired generation are more favorable in the U.S. than in Asian and European countries that rely on liquefied natural gas imports, its ability to match surging AI load growth forecasts is limited, the report said. While long-duration energy storage technology has advanced significantly in recent years, it cannot provide baseload power yet, it said. It's also becoming more expensive to replace aging coal plants with gas and renewables, causing 'sticker shock' for power producers looking to make the switch, the report said. It blamed tariffs, reshoring of production and infrastructure delays for pushing up the cost of new solar while noting a near-doubling of U.S. costs for new gas power plant builds.
Yahoo
21-07-2025
- Business
- Yahoo
New energy realities could extend coal's role in global energy markets
Wood Mackenzie new Horizons report shows how energy security concerns, unprecedented power demand, and technological advances could extend coal's life and reshape the global energy transition Global coal demand could remain stronger for longer, with coal-fired power generation potentially staying dominant through 2030, well beyond current projections for peak coal, according to a new Horizons report from Wood Mackenzie. The report titled 'Staying power: How new energy realities risk extending coal's sunset' suggests that a confluence of factors, from a rapidly electrifying global economy to energy security priorities rising from geopolitical and cost shocks to Asia's young and evolving coal fleet, could extend coal's role as a vital power source well into the next decade and beyond. 'Extending coal's prominence through 2030 would fundamentally alter the global energy transition timeline. We're talking about delaying the phase-out of the world's most carbon-intensive fuel source during a critical decade for climate action,' said Anthony Knutson, global head, thermal coal markets at Wood Mackenzie. 'While the long-term trajectory towards renewables remains intact, the path is proving far more complex than many anticipated as countries grapple with energy security and affordability concerns.' In Wood Mackenzie's base-case Energy Transition Outlook, coal-fired power generation is projected to decline by nearly 70% between 2025 and 2050. This decline is driven by decreasing renewable energy costs, advancements in battery storage technology, a resurgence in nuclear energy, and an increase in natural gas capacity. However, Wood Mackenzie's latest Horizons report highlights the potential for coal to remain demand to be stickier than expected. A 'high coal demand' case that offers a significantly different perspective: coal generation could average 32% higher than the base case through 2050. Under the high coal demand case, output from global coal fleets is optimized to help meet steep and rapid load growth expectations, leading to significantly less renewable and gas energy deployment. This equates to 2,100 gigawatts (GW) less global wind, solar, energy storage, and natural gas capacity between 2025 and 2050. Without carbon capture and storage investment, unabated emissions from the coal sector would increase by two billion tonnes compared to the base case scenario. Total global coal electricity generation, unabated, terawatt hours (TWh) Source: Wood Mackenzie Investment headwinds and shifting market forces The latest Horizons report notes that a higher coal demand case will expose investment gaps in replacement coal supply, potentially raising prices by 2030. 'Private equity and sovereign wealth funds will be needed to fund greenfield and brownfield mine expansions,' said Knutson. 'We expect most Western financial institutions to continue limiting thermal coal investments, with the strongest impact on supply growth from 2025-2030 and longer-term market implications if supply replacement momentum is not maintained.' According to the report, lack of commensurate investment is the largest risk facing coal markets now. Wood Mackenzie expects higher coal prices to erode the fuel's core cost advantage if demand increases without a supply response. 'While we understand coal demand may remain resilient in coming years, eventually supply constraints will emerge, and this could accelerate price increases globally and erode future demand,' said Knutson. Reimagined coal power offers potential pathways The potential for carbon capture, utilisation, and storage (CCUS) offers a pathway to extend coal's operational life in a decarbonising world. 'CCUS could theoretically transform coal's environmental profile by capturing carbon dioxide emissions before they enter the atmosphere, but the economics remain challenging without substantial policy support and capital investment,' said David Brown, director, energy transition practice at Wood Mackenzie. 'Higher coal utilisation rates would improve the investment case, but we're still years away from cost-competitive deployment at scale, particularly in Asia, where carbon storage costs are likely to limit widespread adoption,' he added. As governments and asset owners reposition for a low-carbon future, technologies that reduce the carbon intensity of coal must be prioritised. Without innovation in areas like CCUS, co-firing and flexible, load-following coal capacity to work in concert with renewables, a high coal demand scenario becomes increasingly difficult to justify. Where CCUS is deployed, pairing it with gas-fired generation may offer a more efficient path, given the lower CO₂ capture requirements per unit of electricity produced. A new paradigm for global energy planning While increased coal consumption represents neither an inevitable outcome nor an optimal scenario, current market trends indicate a significant transformation in global energy priorities. As nations develop comprehensive energy planning strategies, they are increasingly prioritizing energy sovereignty and domestic resource control to support their long-term objectives. This shift reflects countries' efforts to accelerate electrification initiatives that are both cost-effective and dependable for their populations, while maintaining greater autonomy in their energy planning decisions. 'Despite potential higher coal demand, we have the tools to phase it out,' Brown concluded. 'Without urgent actions, the world faces a growing risk of drifting towards a 3°C pathway. Our high coal demand case is not a forecast, but it's a warning of what inaction could bring, and a reminder of what can still be prevented.'Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
