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Page added on February 2, 2017
Coal and oil demand ‘could peak in 2020’
Solar power and electric vehicles will wreak havoc on the energy sector, say analysts from Carbon Tracker and Grantham Institute, in contrast to rosy industry forecasts
Spain’s Gemasolar power plant spied from the historic Solar Impulse round-the-world flight in July (Pic: Solar Impulse)
Fossil fuel giants are vastly underestimating the disruptive power of solar panels and electric cars, which could see coal and oil demand peak by 2020.
That is the conclusion of a report by the Carbon Tracker Initiative and Grantham Institute published on Thursday.
Energy companies pursuing business as usual are in for a rude awakening, by this analysis, with many mines and oil fields likely to become surplus to requirements.
Based on dramatic cost reductions in recent years, the model foresees these two technologies taking a 10% chunk of market share from carbon majors in a decade. That may not sound like much, but was enough to devastate the US coal sector.
“If people are just waiting on policy to happen, they could get bitten by clean technology coming up behind them,” said James Leaton, an author of the report.
Solar panel costs have fallen 85% in the past seven years and car battery costs 73%. Despite these advances, the traditional energy companies continue to forecast linear growth at best.
BP predicts electric cars will make up 6% of the market by 2035. Carbon Tracker reckons a third is feasible.
Exxon Mobil expects all renewables to supply 11% of electricity in 2040. Carbon Tracker says solar alone could produce 23%.
It is not enough to meet the Paris Agreement upper limit on global warming of 2C, but bends the curve to 2.4-2.7C, compared to 3-4C under industry scenarios. Policies targeting other sectors would bring the international climate goal within reach.
8 Comments on "Coal and oil demand ‘could peak in 2020’"
Newfie on Thu, 2nd Feb 2017 9:45 am
Fossil fuels currently account for 85% of world energy consumption. It isn’t going change dramatically in just 4 years. Solar powered airplanes, ships, tractor trailers are a fantasy. So dream on…
rockman on Thu, 2nd Feb 2017 10:10 am
Same exact title for this article but spun differently: “Coal and oil demand will increase at least through 2020”.
Due to a slowing of the INCREASING rate of coal consumption prices took a hit a few years ago. That had a huge impact on the market cap of public coal companies. But since last summer coal prices have increased more than 60%. King Coal IS NOT DEAD…he just took a nap for a while. LOL.
From May 2016 – http://www.mining.com/web/china-and-india-could-destabilize-global-coal-market-2/
Coal’s continued relevance – Often the debate on coal’s future centers on pollution, climate change, and the increasingly low-cost attractiveness of renewable energy production. Though these arguments are valid, over 473GW of coal power capacity was brought online in the period 2010-15, led by China and India. A further 338GW is currently under construction, rendering coal an indissoluble cog in global energy production in the medium to long-term.
China alone accounted for 297GW of coal power capacity in the period. By way of comparison, the entire US coal fleet is 315GW, with China annually adding on average roughly half (49GW) of the UK’s total installed capacity in coal power alone.
This also does not take into account the role of coal as a fuel source used in industrial furnaces for smelting and baking processes, or as an additive in chemical derivatives and industrial applications.
Ironing out inefficiencies – In China, pollution, climate change, and overcapacity concerns have, however, provided impetus for the country to review the role of coal in its energy mix. With its total installed electricity capacity increasing on average by 10% in the period 2007-2013 to 1257.68GW, China has halted the construction of over 200 approved coal fired power stations until 2018.
Halting the approved build program with combined electricity output of 105GW – equivalent to 73% of Africa’s total installed capacity – must be seen in light of arguably the most significant growth phase in modern industrial history, with total installed electrical capacity more than tripling since 2000 (298GW). The peak of this growth phase (2007-2011) saw China building the equivalent of two 500MW coal power stations per week.
The hiatus in new plant construction comes on the heels of significant losses in plant utilization rates, plummeting from 60% in 2011 to 49% in 2014, expected to fall to 46% in 2016. Coal power plants with less than 100MW output have also been earmarked for closure, with 60GW of coal power announced to be removed from the grid in the 2016-2020 period.
In a similar vein, over 4300 small, inefficient coal-mining operations have been earmarked for closure in addition to the 7250 that have been closed in the last 5 years, slashing a further 560 Mt. In total ,1.3 million coal and 500 000 steel jobs will be lost as part of a broader economic restructuring. India too has beenstruggling with inefficiencies following a remarkable growth phase that saw its total installed electricity capacity practically double in the period 2006-2014, from 124GW to 245GW.
Along with China, India’s coal-fired power stations are among the most inefficient globally. Due to bottlenecks in the supply of coal to power stations by rail, with over 50Mt of coal stranded at mines in 2014, modernization of existing coal power plants has been identified as essential to keep pace with an electricity demand of 4.9% per year.
Further corrections to the global coal market are expected in the short-term as China and India grapple with weighty inefficiencies at mine, power plant level and factory level.
penury on Thu, 2nd Feb 2017 1:08 pm
re always WAGS and I would not buy stock based upon anything that I had not done research on myself. Apparently these people feel that they are the world, and therefore every one else will be doing the same as the affluent. Pity the poor outnumber the affluent by quite a large margin.
JN2 on Thu, 2nd Feb 2017 2:44 pm
>> Solar powered airplanes, ships, tractor trailers are a fantasy <<
The plane in the photo is solar powered.
Davy on Thu, 2nd Feb 2017 2:54 pm
Right JN2, an inconvenient problem and just another part of the unlikely scalability of the technology to a real transition paradigm that eliminates fossil fuel.
Harquebus on Thu, 2nd Feb 2017 7:13 pm
“The plane in the photo is solar powered.”
Manufactured using the resources of a fossil fueled society and was at its limit carrying 2 people. Fifty years ago we were making our way to the moon.
Dream on.
Pat on Fri, 3rd Feb 2017 2:39 am
there are many factors that going to reveal the oil capacity to continue bau, demand and growth. if seen the declining eroei, ponzi scheme, end of bau, only seeing last stages of oil age. if one read smuch into renewables to power economy,growth is fantasy. world has already see the peak of demand in 2008,2010 and peak conventional oil in 2003. we are on falling slope of oil curve with oil shortages from 2020……
Mark Ziegler on Fri, 3rd Feb 2017 8:36 am
No.
https://www.youtube.com/watch?v=eccGKSBrAC8