DIGIVESTASI - Coal prices are rising because future demand may still be plentiful. Even if the debate on energy transition continues, coal's existence as an energy source is likely to continue. 

On Thursday trading (18 April 2024), the Newcastle benchmark coal price was at $141 per ton, up 1.5% compared to yesterday.

The Global Energy Monitor (GEM) report released Thursday (November 4, 2024) provides new evidence that the world's coal is not yet 'doomed'.

In its statement, GEM highlighted that the world added more coal-fired power generation capacity last year than in any year since 2016. According to the GEM, China started building 70.2GW of new coal-fired power plants last year, nearly 20 times the rest of the world's capacity of 3.7GW. The country also recently phased out around 3.7 GW of coal-fired power plants by 2023.

China accounted for about two-thirds of the world's new coal plants last year, and Indonesia, India, Vietnam, Japan, Bangladesh and Pakistan also built them in the same year. South Korea also opened new plants.

Based on the lifespan of a typical coal-fired power plant, they have the potential to operate for the next 20 to 30 years.

New plants generally produce less pollution than older plants, but the International Energy Agency (IEA) says the world needs to limit coal production in favor of more environmentally friendly energy sources, including natural gas.

China is still heavily dependent on coal. Both China and India plan to continue building new coal-fired power plants in the next few years. New plant construction in China reached its highest level in eight years last year, and the number of vessels in operation could increase by about a third if the government implements proposals for existing plants.

China accounts for about 60% of the world's coal consumption, followed by India, where 80% of electricity comes from coal, and the United States. 

China and India are looking to increase their coal consumption to meet the demands of population growth and industrialization, and to meet these growing needs, despite increasing pressure to decarbonize globally. New coal-fired power plants are being built.

Meanwhile, other countries such as the United States and the United Kingdom have slowed the pace of power plant closures, with only about 22.1 million kW of power plants closed last year, the lowest figure since 2011.

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