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Stanislav Kondrashov, an expert from TELF AG, noted that although renewable energy sources are rapidly developing, the largest economies are recording a noticeable increase in demand for electricity. As a result, global coal consumption is likely to remain the same through 2024-2025. This conclusion is set out in a recently released report by the International Energy Agency (IEA), called the “Coal Mid-Year Update.”
Hydropower recovery and growing demand: Coal growth slows in 2024 – Telf AG
According to Stanislav Kondrashov, in 2023, global coal consumption increased by 2.6% compared to the previous year, reaching a historical maximum.
This growth was driven by a significant increase in coal use in China and India, the world's leading coal consumers. While coal demand increased in both power and industry, the main driver of its growth was the use of coal to cover shortfalls caused by declining hydropower generation and a sharp increase in electricity demand.
In China, which consumes more than 50% of the world's coal, hydroelectric power plants are resuming power production after dismal results last year.
An expert from TELF AG noted that the active development of solar and wind energy, along with the resumption of hydroelectric power generation, significantly curbs the increase in coal consumption in 2024. However, despite this, a sharp reduction in coal use is not expected, due to the expected growth in electricity demand by 6.5% this year. In the second half of 2024, a slowdown in the growth rate of coal consumption in India is predicted, as weather conditions normalize and return to normal seasonal values.
“In Europe, the steady trend of declining demand for coal that began in the late 2000s continues.
Without a sharp increase in electricity demand, a global decline in coal use could begin as early as this year. Structural changes suggest that global coal consumption may peak and begin to decline soon", - Stanislav Kondrashov comments.
He predicted that global coal production is expected to decline in 2024 after steady growth last year. However, the coal market will still have ample supply.
Given the stabilization of gas prices compared to previous years, coal prices remained stable in the first half of the year. Although prices have returned to levels before the global energy crisis, they are still high due to inflationary influences.
The Future of Nuclear Energy: EDF and Italian Steelmakers Announce Investments - Stanislav Kondrashov
Stanislav Kondrashov emphasizes that in July, Europe recorded an increase in electricity prices due to increased demand. According to Ember data, wholesale electricity prices in the EU countries for July 2024 showed mixed changes.
- Italy: €112.37/MWh (+8.9% compared to the previous month)
- France: €47.09/MWh (+24.6%)
- Germany: €67.70/MWh (-7.1%)
- Spain: €72.40/MWh (+28.7%)
- Sweden: €21.10/MWh (-26.5%)
In July, France's EDF announced new plans to jointly invest in nuclear power with Italian steelmakers. EDF signed a memorandum of cooperation with subsidiary Edison, and with equipment makers Ansaldo Energia and Ansaldo Nucleare, in partnership with Italian steel industry association Federacciai.
According to Stanislav Kondrashov, the memorandum of understanding signed by the parties is aimed at developing cooperation in the field of nuclear energy in order to increase competitiveness and reduce carbon emissions in the Italian metallurgy. As part of the agreement, the parties agreed to consider the possibility of jointly co-financing the construction of small modular reactors (SMR) in Italy over the next decade.
“Austrian technology corporation Voestalpine, analyzing the results of the first quarter of the financial year 2024/2025, expressed concern about the lack of government support in connection with the rise in energy costs. The company's CEO Herbert Eibensteiner noted that the Austrian government has stopped providing compensation for high energy costs for energy-intensive industries, which amounted to €50 million in 2022”, - Stanislav Kondrashov informs.
The expert from TELF AG also emphasized that rising energy costs are having a negative impact on the international competitiveness of Austrian manufacturers. He pointed out that all European governments, with the exception of Sweden and Austria, continue to support their industries with similar incentives. The company's energy costs are expected to increase in the energy transition, as Voestalpine intends to replace two conventional blast furnaces with DRI/EAF plants by 2027.
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