A coal industry revival has been accelerated in recent months, boosted by the Russian invasion of Ukraine that has upended energy markets and left many countries scrambling to meet power demand. The fossil fuel that many climate experts believed was finally on the way out is now experiencing its strongest demand in years, exacerbated by a natural gas crunch that has worsened since last year.
After generating the most electricity ever from coal in 2021, global coal consumption is expected to set another record this year and remain at those levels through at least 2024. Coal-fired power plants that were once decommissioned are now being brought back online as the European Union focuses on trying to keep the lights on. Despite renewable energy initiatives spreading across the globe, coal has re-asserted its critical role in the global energy portfolio as countries prepare to boost production.
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Coal Revival Boosted by Ongoing European Energy Crunch
Despite greater renewable energy development and climate friendly initiatives spreading across the globe, the world’s reliance on coal continues to play a significant role in the global energy portfolio.
The coal industry comeback was first sparked by a natural gas crunch facing the European Union for much of the last year. While tight natural gas supplies first began in the fall of 2021, markets have yet to find balance with prices remaining historically elevated, hitting a 13-year high recently in the United States. In Europe, prices continue fluctuate in line with the news coming out of Russia, with the most recent update being that Russia has halted gas deliveries to Poland, per Bloomberg.
MRP highlighted the European energy crunch back in December, noting that countries across the region were increasingly reliant on coal-fired power plants to keep the lights on. That trend looks to continue as the Russian invasion of Ukraine has upended energy markets once again.
In 2021, the world generated more electricity from coal than ever before, up 9% compared to the previous year according to the International Energy Agency (IEA). Now, much of the world is shunning Russian energy supplies, including coal, and demand is higher than it has ever been before.
Bloomberg believes the Russian war has turbocharged the coal market, causing power producers to scramble for supplies while prices climb near record levels.
According to Reuters, European countries imported a total of 7.1 million tons of thermal coal in March, a 40.5% increase year-over-year and the highest level since 2019. However, that those shipments included imports from…
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