The Future of Coal

The future of electricity generation from coal in the world 

There are currently over 2,400 coal-fired power plants in operation across 79 countries. The installed capacity of these power plants is approaching 2100 GW, with a further 176 GW currently under construction. Reducing greenhouse gas emissions by phasing out coal is arguably one of the top priorities for the global business community. The Intergovernmental Panel on Climate Change (IPCC) has set a target of reducing the share of coal in global primary energy supply to between 1-7 per cent by 2050. Coal currently accounts for  26.8 per cent of the global primary energy supply, making it the second most significant source of energy after oil.

In its 2019 study, Climate Analytics recommended that coal-fired electricity generation should end worldwide by 2040 to stay below a 1.5-degree temperature rise. The report recommends a reduction of coal use in electricity generation by 80 per cent below 2010 levels by 2030, with the complete cessation of coal use in OECD countries by the same year. In its “Net Zero Emissions Scenario” for 2050 (World Energy Outlook 2021, page 37), the International Energy Agency (IEA) also suggests that the share of coal in electricity generation should fall to 8 per cent by 2030 and to 0 per cent by 2040. The Intergovernmental Panel on Climate Change (IPCC) has stated that in all scenarios aiming to stay below 2 degrees Celsius by 2050, all coal plants without carbon capture and sequestration technology should be closed.

The World Energy Council anticipates that global coal demand will reach its peak in 2025 at the latest and subsequently decline. By 2050, the share of coal in primary energy supply is projected to range between 7 per cent and 18 per cent, contingent on the scenarios. The decline in coal demand is not aligned with the pledges made by countries and scenarios. 

Following the outbreak of the coronavirus (Covid-19) pandemic in 2020, global coal consumption rose again in 2021, exceeding 2019 levels (IEA Coal 2021). The situation that began with Russia’s invasion of Ukraine has also highlighted the need to temporarily protect or recommission coal power plants, particularly in European countries, in case of a potential reduction or interruption in gas supplies from Russia. To date, this trend has not impacted the coal phase-out plans of European countries. The majority of European countries have formally set the dates for the closure of their coal-fired power stations. Please refer to the map in the Coal in Europe section of our website for the latest updates on the situation.

In 2020, there was a significant decline in coal demand in the US and the European Union (EU), with figures falling by approximately 20%. India and South Africa also saw a notable reduction in demand, at 8%. In contrast, China experienced a more modest decline in demand, with growth limited to 1%. However, the decline in demand began to reverse after the pandemic. Global coal demand, which reached an all-time high in 2022 due to robust demand growth in Asia and the US, is projected to reach its peak in 2024 at a gradual rate. In parallel with the growth in demand, there has been an increase in electricity generation from coal in many regions. In 2021, there was a 16% increase in electricity generation from coal in the US and an 18%  increase in the EU compared to the previous year. The rise in gas prices has been a significant contributing factor to this development. . The expected increases in India and China (12 per cent and 9 per cent respectively) will mean that these countries will set new generation records in 2021. Nonetheless, it is anticipated that coal will account for 36% of global electricity generation in 2021, which represents a five-percentage point decline from its peak in 2007. 

Prior to the conflict between Ukraine and Russia, projections indicated that global coal demand would reach its peak within two years and subsequently decline. The timing of the peak may be subject to change as a result of efforts to replace gas from Russia with coal, although this is likely to be a temporary measure.The Boom and Bust Coal 2022 report indicates that global coal plant capacity increased by 18.2 GW in 2021. Over half of the capacity increase was attributable to new plants in China. In 2021, China commenced construction of new coal-fired power plants with a combined capacity of 33 GW. A review of global capacity excluding China reveals that the four-year decline persists. The installed capacity of coal power plants under construction decreased by 5 GW compared to 2020, reaching 176 GW. While 12.9 GW of coal-fired power plants were decommissioned in the EU, Portugal achieved the goal of ending coal-fired electricity generation nine years ahead of schedule. The number of countries worldwide that are interested in constructing new coal-fired power plants has decreased from 41 to 34 compared to the previous year.

Projected Progress of Turkey’s Electricity Mix, 2015 – 2023. 2015 and 2019 data are from TEİAŞ Electricity Statistics, 2023 targets are from the 11th Development Plan. 

The future of coal-fired electricity generation in Turkey

Turkey’s energy strategy has identified coal-fired power generation as a key target. From 2015 to 2019, there was a 50% increase in the capacity of coal-based power generation. The 2019-2023 Strategic Plan of the Ministry of Energy and Natural Resources sets a target of 14,664 MW for the installed capacity of domestic coal-fired power plants by 2023. While the Strategic Plan does not align with TEİAŞ’s projections and it will be challenging to reach this target by the end of 2023, it demonstrates that the objective is to increase the capacity of domestic coal power plants by 40%. 

The number of coal power plant projects in Turkey continues to decline. In 2021, 10.6 GW of coal power plant projects were cancelled. In 2021, the first unit of the imported coal-fired Hunutlu Thermal Power Plant in Adana was commissioned with Chinese financing. The lack of external financing opportunities is likely to make it challenging to develop new coal-fired power plant projects in Turkey. Further details on this topic can be found in the Turkey section of the Rise and Fall 2022 report, available in the Reports  section.

There are alternative views on the future of Turkey’s energy mix. Turkey has a wealth of renewable energy resources. It is anticipated that the utilisation of renewable energy sources, particularly wind and solar, will grow significantly within Turkey’s energy system, mainly due to the impressive decline in the costs of solar, wind and other renewable energy technologies. In 2015, the combined share of wind, solar and geothermal in Turkey’s electricity generation was 5.8 per cent. By the end of 2021, the proportion of electricity generated from wind, solar and geothermal sources had reached 16.7 per cent. The growth in installed capacity over the past five years has been driven primarily by solar, wind and hydroelectric power plants with dams. The total installed capacity of solar and wind power has reached 18% of Turkey’s total installed capacity.

It has been widely asserted that the rising proportion of wind and solar energy will have a detrimental impact on Turkey’s energy system. A study was conducted by the SHURA Energy Transformation Centre to assess the impact of integrating significant renewable energy sources into the grid on the electricity transmission system. One of the key findings of this report is that Turkey has the potential to meet 65% of its electricity needs from renewable energy sources without the need for additional investment in the transmission system. In the Coal Reduction Scenario outlined in the report, the installed capacities of wind and solar power are set to reach 74 thousand MW.