A year of two halves?

Ember's analysis reveals a bounceback in global coal power after unprecedented declines in the first half of the year.

Euan Graham

25 November 2020 | 2 min read

Executive summary

2020 looks set to be a year of two halves

We saw unprecedented declines in coal power in the first two quarters, but coal generation bounced back in Q3 and continues to recover into Q4.

In spite of the unprecedented impact of Covid-19 globally, we project coal generation to fall by 5% in 2020.

This falls short of the progress needed to stay below 2 degrees of warming, and if continued could put 1.5 degrees out of reach.

Key findings

Coal generation trends in 2020

Looking back at coal generation in the first three quarters of 2020

The first half of 2020 saw unprecedented falls in coal-fired power generation, with global coal generation falling by about 8%. This was driven partly by falling electricity demand across the globe due to the impact of Covid-19, but also due to the building of new wind and solar and retiring of coal plants, particularly in the US and EU-27. The graph below shows the % fall in coal generation seen in each quarter of 2020, compared to the same period in 2019. By Q3, although falls in coal generation were still being seen in a number of countries, these falls were small compared to those seen earlier in the year.

Globally, coal was only down by 1% in Q3, having been down 11% and 6% in Q1 and Q2. In the US, coal fell by 11% in Q3, compared to 34% in Q1 and 28% in Q2. Most notably, China’s coal generation went from being down 8% in Q1, to +5% in Q2, with growth of +2% seen in Q3. In the EU-27, coal generation was down 9% in Q3 – not an insignificant amount but much lower than the -34% and -28% seen in Q1 and Q2. A large reason for this was the return of electricity demand as countries exited national lockdowns.

Looking ahead to the rest of the year

If Q4 shows similar falls in coal to Q3, then 2020 could be a year of two very different halves. And early data for October supports this. Coal generation in the EU-27 fell by 6% (compared to 9% fall in Q3), and by around 11% in the US (in line with Q3). And tentative figures released by the CEA indicate that October coal generation is up 13% in India compared to a rise of just 1% over Q3.  In China, October saw a fall in thermal generation of 1.5%, although this fall was largely due to favourable Hydro conditions – greater increases in thermal generation could still be seen.

Below we estimate what the total % change in coal generation will be for different countries in 2020, assuming the falls in Q3 are seen again in Q4. Under these changes the world would see a fall in coal generation of 5% when compared with 2019. This would constitute a record, but given the unprecedented nature of 2020, it is perhaps less than expected. More significantly, it isn’t fast enough to avoid the worst impacts of climate change.

Conclusion

Where do we need to be

In their latest World Energy Outlook, the IEA present a range of scenarios designed to indicate where the power sector needs to be headed. The lower ambition Sustainable Development Scenario (SDS) mandates falls in coal generation of 5.3% per year until 2030, to be on track for a 66% chance of holding global temperature rises below 1.85 degrees. But more importantly, their new NZE2050 scenario, shown below, would require falls in coal generation of around 12% each year, with all subcritical coal being phased out before 2030.

The projected fall of 5% this year does not reach either of these targets, and highlights the importance of ensuring that any net zero pledges are accompanied by real change in the short-term.

Supporting Material