Latest news with #coal
Yahoo
4 hours ago
- 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.
Forbes
6 hours ago
- Business
- Forbes
China, India's Coal Usage Delivers Energy Transition Reality Check
Excavators unload coal from rail cars into a coal storage facility of a logistics company in ... More Binzhou, in eastern China's Shandong province on May 9, 2025. (Photo: STR/AFP via Getty Images) The global market consensus suggests that coal, regarded as the dirtiest of fossil fuels, has to go out first, and fastest, from the world's power mix for a meaningful energy transition to a low-to-zero carbon future. In tandem, Asia's burgeoning power sector is seen as the cornerstone of the transition in many climate change mitigation models. But on both counts, the continent's two big powerhouses - China and India - continue to deliver a sobering reality check. Market data points to both nations still incrementally motoring on coal, despite their visible overtures on renewable energy. Both saw a rise in their coal-fired power plant capacity by several gigawatts last year. According to the International Energy Agency, China approved almost 100GW of new coal-fired plants in 2024, and India a further 15GW. It meant that approvals for such plants hit their highest level since 2015. 'Nearly all of the growth in coal investments in 2024 came from China and India to meet domestic demand,' it noted in a recent report. Furthermore, investments in coal supply continue to tick upward with another 4% increase expected in 2025, albeit a slight slowdown compared with a 6% annual average growth seen over the last five years. No Shortage Of Finance Aggregated data, including government figures, on China indicates that over 300 coal power plants are currently under construction in the country. It equates to nearly 80% of all such construction around the world. Meanwhile, 46 are under construction in India, according to the country's Central Electricity Authority. Financing does not appear to be a problem at all. According to Urgewald, global banks provided finance for more than $385 billion to the coal power industry over the past three years, with annual inflows increasing last year. Unsurprisingly, Chinese banks are the leading providers of coal financing having allocated almost $250 billion to the industry between 2022 and 2024, the non-profit firm's data suggests. Meanwhile, president Donald Trump's return to the White House has further buoyed the coal industry. After having won the Powder River Basin states of Montana and Wyoming — home of the largest coal mines in the U.S. — on his way to the White House, Trump made his stance on coal abundantly clear to the world. On January 23, speaking at the World Economic Forum just days into his second presidential stint, Trump said: 'Nothing can destroy coal — not the weather, not a bomb — nothing. And we have more coal than anybody.' Less than three months on from those remarks, on April 8, Trump's issued an executive order 'reinvigorating America's beautiful clean coal industry.' Ahead of signing the order, the president said: 'Pound for pound, coal is the single most reliable, durable, secure and powerful form of energy. It's cheap, incredibly efficient, high density, and it's almost indestructible.' U.S. banks, already the second-largest lenders to the coal industry, having lent around $50 billion to it over the last three years, also took their cue from the changing American political climate. Ahead of Trump's inauguration in January, Bank of America, JPMorgan and Citi - who were among the biggest coal financiers stateside - quit the Net Zero Banking Alliance, considered the financial sector's low-to-zero carbon target-setting group. Goldman Sachs, Morgan Stanley and Wells Fargo also joined them. Neighboring Canada's big six banks - Royal Bank of Canada, Toronto-Dominion, Bank of Nova Scotia, Bank of Montreal, National Bank of Canada, and Canadian Imperial Bank of Commerce - also announced their departure in February. Ironically, the UN-sponsored initiative was set up in 2021 by former Bank of Canada Governor, and current Canadian prime minister Mark Carney to encourage financial institutions to push toward achieving net zero emissions by 2050. Australia's Macquarie bank did likewise in February, and Japan's Nomura and Sumitomo Mitsui quit in March. U.K.'s HSBC became the latest to ditch the NZBA in July. It indicates nothing short of a full-blown exodus from the initiative. Sobering Reality Check But it also attests to the point that many banks now accept financing fossil fuels, including the dirtiest one, isn't going to end anytime soon. And if the world's three leading economies - U.S., China and India - aren't giving up on coal just yet, why should they jump the gun. Of course, that's despite repeated assertions by the International Renewable Energy Agency that the majority of new renewables projects are now cheaper than fossil fuels alternatives, including, and especially coal. In 2024, solar photovoltaics were, on average, 41% cheaper than the lowest-cost fossil fuel alternatives, while onshore wind projects were 53% cheaper, it noted in its latest global market assessment. But these market realities are not necessarily being ignored. Both China and India are investing heavily in renewables. Yet, they find themselves unable to ditch coal, along with several peers in Asia due to a number of reasons. To quote research and consulting outfit Wood Mackenzie: '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.' That's nothing short of a check on the global energy transition and a carbon heavy weight on its trajectory to a potential net zero emissions future.
Bloomberg
15 hours ago
- Business
- Bloomberg
China Launches Inspections to Halt Excessive Coal Production
The Chinese government warned it may shutter coal mines guilty of producing above permitted levels, in the latest sign that regulators are getting serious about reining in overcapacity across industries. The National Energy Administration is carrying out monthlong inspections in eight provinces and regions, including the biggest coal hubs of Shanxi, Inner Mongolia, Shaanxi, and Xinjiang, as part of a crackdown on overmining that it says has distorted the market. That's according to a document from the agency dated July 10, which first began circulating on Chinese social media on Tuesday morning, and which people familiar with the matter later confirmed as authentic to Bloomberg News. The people declined to be named discussing a sensitive matter.
Reuters
21 hours ago
- Business
- Reuters
Philippines set for first coal power decline in 17 years amid rising LNG use
SINGAPORE, July 22 (Reuters) - The Philippines is on track for an annual decline in coal-fired electricity output for the first time in nearly two decades, an analysis of market and government data showed, driven by rising liquefied natural gas-fired power generation. The Philippines has the most coal-dependent grid in Southeast Asia but its electricity tariffs, which are not subsidised, are the second highest in the region behind Singapore. The archipelago's liberalised market enables power retailers to pivot to LNG, analysts say, unlike in Indonesia and Malaysia, where cheap coal keeps subsidies manageable. Gas-fired generation surged more than 25% in June year-on-year and rose 5.2% to 10.36 terawatt hours (TWh) in the first half of this year, data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed. That helped push the share of gas-fired power output to 17.5% in the first half of 2025, up from a record low of 13.9% in 2023, which was due to depleting reserves at the key Malampaya field, according to government data dating back to 2003. LNG is expected to meet a rising share of the Philippines' projected 5% annual growth in power demand over the next decade as coal-fired power output is set to peak in 2030 due to a moratorium on new coal capacity construction, said James Ha, head of research for Asia-Pacific at Aurora Energy Research. In 2020, the Philippines stopped accepting new proposals for coal-based power projects to encourage investment in other energy sources like natural gas and renewables. Higher LNG imports will drive annual gas-fired output up by 65% by 2030 from 2024 levels, Aurora's Ha said. Philippine consortium LNGPH signed the country's first long-term LNG deal in March with global trader Vitol, doubling down on improved prospects for the super-chilled fuel in the country of 114 million people. Consultancy Energy Aspects expects the Philippines' LNG import demand in 2025 to rise by more than 50% to 2.1 million metric tons from 2024 due to the addition of new gas-fired capacity, senior LNG analyst Kesher Sumeet said. Price-sensitive Asian nations with high reliance on coal have largely boosted renewable additions to slash emissions and address growing power demand instead of using LNG as a transition fuel. However, the Philippines has instead bet on LNG, whose usage has started inching up after it began importing the fuel in mid-2023. The country registered a 40% increase in the generation capacity of its gas-fired power fleet in 2024 from end-2023 levels, IEMOP data showed. Meanwhile, coal-fired power output fell 5.5% to 33.8 TWh during the period, IEMOP data showed, with generation falling for the fourth straight month in June and its share of the power mix dropping to 57.2% from 61.9% in 2024. Falling coal-fired power demand led to the first decline in coal imports since the COVID-19 pandemic during the six months ended June, while LNG imports rose 51% in the same period, Kpler data showed. Coal's retreat - the first since 2008 - was also compounded by hydropower generation accounting for a higher share of Philippines' electricity mix during the first half of the year. Asian spot LNG prices have fallen about 13% this year on tepid demand, further boosting the competitiveness of the fuel against coal. IEMOP data also showed a wave of planned outages in early 2025 at coal-fired power plants, which helped to boost the share of gas. "We think that the rising power demand in the Philippines will outpace renewables' growth and that combined with the coal phase-out policy would sustain Philippines' call on LNG in coming years," Energy Aspects' Sumeet said. Electricity generated from renewable sources in the Philippines has been rising, but growth has fallen well short of its ambitious targets.
Yahoo
a day ago
- 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
