Rumors of coal’s death have been greatly exaggerated. As evidence placing 2021 among the hottest years ever recorded rolled in last week, new data demonstrated just how difficult it is to relegate the burning of dirty black rocks to the slag heap of history.
In one study, the independent research center Rhodium Group estimated that 2021 greenhouse gas emissions in the U.S. experienced a surge of 6.2 percent compared with 2020′s pandemic lows, thanks in large part to a 17 percent bump in coal-fired electricity generation. A second study, by the International Energy Agency, reports that the global demand for coal hit an all-time high in 2021, and that it will rise further in 2022 and remain steady at record levels through 2024, largely thanks to China and India.
Limiting warming to 1.5 degrees Celsius, the goal set in the Paris Agreement that scientists say would help stave off the worst effects of climate change, necessitates leaving almost all remaining coal in the ground. However, the world’s biggest coal consumer, China, has committed only to start curbing its use by the end of the decade, and it faces some serious political and economic hurdles. On the domestic side, the picture is slightly brighter: Experts say the 2021 U.S. numbers don’t do anything to alter coal’s long-term outlook, and its decline should continue apace — if slower than some might prefer.
“The long-term trends are unchanged, that you have a lot of coal retirements ongoing now and planned in the coming years,” said Mark Thurber, of Stanford University’s Program on Energy and Sustainable Development and author of the 2019 book “Coal.” Data from the U.S. Energy Information Administration bears this out, with almost 14 gigawatts of coal power — almost six percent of the U.S. output — scheduled to close down in 2022 alone; a recent report said that 85 percent of all power plant retirements this year will be coal plants.
The surge in coal power use in 2021 does show that even in the U.S., where economics makes it is essentially impossible to build new coal power infrastructure, easing off the fossil fuel is hard.
“It’s a blip that also shows our vulnerability … if we continue to rely on this kind of bygone-era energy system, where we take black stuff out of the ground and we burn it,” said Claire Fyson, of the international nonprofit research organization Climate Analytics, “it just doesn’t work anymore.”
The Rhodium Group’s analysis found that coal’s 17 percent surge was largely a response to spiking natural gas prices. With 2021 gas prices more than double the average price seen in 2020, power companies saved money by decreasing gas use and relying more on coal. As long as the coal plants are standing by, natural gas price volatility could lead to similar such coal surges in the future.
Just 28 percent of U.S. coal power plants are slated to shut down by 2035. “There has been a lot of spare capacity among the existing coal-fired fleet and, as we have seen this [past] year, those plants are willing and able to ramp up during these high-gas-price periods,” said Harrison Fell, a senior research scholar at Columbia University’s Center on Global Energy Policy. “Absent any federal or regional policies that mandate some decarbonization or otherwise increase the cost of generation from coal plants, if these recent high gas prices persist, the long tail of coal’s demise could get seriously elongated.”
Some states have instituted policies that would hasten coal’s death, such as aggressive emissions reduction targets and renewable energy incentives, Fell said. But by and large, they are not the states where coal plants are concentrated. About 30 states have enacted renewable portfolio standards, which require some proportion of a state’s energy come from clean sources — but Wyoming, West Virginia, Kentucky and other coal powerhouses aren’t among them.
At the federal level, there is one very uncomfortable elephant in the room: The sprawling social-program spending bill backed by President Joe Biden. It’s now stalled in the Senate.
“The Build Back Better Act, at least as it was written in 2021, provides tremendous support for renewables” and other cleaner alternatives, Fell said. “Massively expanding these generation sources undermines the economics of existing coal and would certainly speed up their retirements.”
The legislation, which includes significant climate funding, has been stymied by the objections of Senate Republicans and West Virginia Democratic Sen. Joe Manchin, who is severely entangled with the coal industry. Manchin has suggested he opposes coal-unfriendly policies because the “market” is already tamping down coal use — an idea belied by last year’s surge and the too-slow pace of plant retirements.
The bill’s fate remains nebulous. Fell said that the Biden administration could take other actions to hasten coal plant retirements through the Environmental Protection Agency, but the Supreme Court would likely rip the teeth out of any such approach.
“If, for existing coal plants, the economic conditions remain positive (e.g., gas prices remain high) and the regulatory hurdles remain low, I don’t think it’s unreasonable for these plants to continue generating for another 10 to 15 years and possibly longer,” Fell said.
That may sound disappointingly slow, but it’s still a rosy scenario when compared with coal’s trajectory among the world’s biggest consumers.
China isn’t quite ready to let coal go
Zooming out, China — which accounts for more than half the world’s annual coal consumption — will be a major player in deciding how long coal’s death throes last.
Like the U.S., China saw a surge in coal consumption last year. But it was a record high after several years of climbing consumption, not just a blip.
In many ways, coal is an indicator of China’s overarching economic transition. Chinese leadership has been attempting to steer China away from a GDP-centric growth model that relies on heavy industry toward a higher-quality, and lower-carbon, economy.
It has been a jagged transition. In 2020 and 2021, the Chinese government unleashed huge stimulus spending on infrastructure to boost the economy in the wake of the initial covid outbreak in Wuhan. That drove a spike in coal consumption to produce the cement and steel needed to build everything from airports to roads. At the same time, the pandemic spending spree in the U.S. and other affluent countries increased Chinese exports, raising manufacturers’ electricity use.
Gang He, an energy expert at Stony Brook University, sees it as a short-term trend. “It cannot change the long-term trajectory of coal phasing out or coal phasing down,” he said, pointing to the government’s commitment to peaking emissions before 2030 and reaching carbon neutrality by 2060.
China’s longer-term energy and development priorities did start to reemerge in the second half of 2021. Coal power, steel and cement consumption fell — a byproduct of China trying to rein in excessive real estate development. That’s a long-term priority for the government as it shifts the economy and should help bring about the end of coal’s reign.
But the future of China’s favored fuel is also tied up in other political considerations. In the fall, China will hold its 20th Party Congress, where President Xi Jinping is expected to be anointed for his third term. The government usually approves a short-term stimulus in the run-up to these party congresses to ensure the economy looks good ahead of the political event, according to Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air. That could mean more coal-intensive construction projects.
At the same time, after an energy crisis led to skyrocketing coal prices this past fall, the Chinese leadership is also very focused on energy security, He said. During an October visit to one of China’s largest oil fields, Xi compared energy to a rice bowl that “must be held in our own hands.” Because China is rich in coal resources, that could mean an extra boost for coal in the short term.
A final political challenge when it comes to phasing out coal is that local governments hold a lot of power. Provinces have the authority to approve new coal power plants, and many are still interested in doing so to boost GDP and jobs.
In northern China’s Shanxi province, for instance, the coal mining industry employed nearly 1 million people as of 2016, compared with 11,000 in West Virginia, a state roughly half its size by area. For these provinces, getting off coal is a huge social and political predicament. “How we guarantee their jobs and support their families — that is a challenge,” said He.
These political and economic pressures create a highly uncertain path for coal over the next few years. China has committed only to start decreasing coal use between 2025 and 2030.
India, the world’s second-biggest consumer of the fuel, is projected to decrease coal’s share of power generation from 70 percent to 50 percent over the coming decade. But that comes in the context of a rapidly expanding power sector — so overall coal use should continue to increase. The IEA report projects that India will expand its coal consumption by about 4 percent per year through 2024. It’s not clear when the trend will finally start to reverse.
China’s tipping point could come sooner. Myllyvirta said he predicts coal use could start decreasing there as early as 2023, as China backs off of rounds of short-term stimulus and homes in on its long-term priority of creating a less energy-intensive economy.
But he points out that this timeline is still far from ideal climate-wise: “I’m cautiously optimistic — of course it is still far away from what would need to happen to get on the 1.5 degree trajectory.”