SA recorded the biggest drop in coal use in the world in 2022 — one of only a handful of countries to do so — with consumption dropping 5% to 157-million tonnes.
The decrease is hardly surprising given that 2022 was the worst year of load-shedding on record.
In its latest forecast and analysis of global coal markets, the International Energy Agency (IEA) expects some stabilisation of SA’s coal usage and production but no recovery due to slow economic growth and the poor performance of Eskom’s coal-fired power stations.
SA has installed electricity generation capacity to produce about 46,000MW of electricity. At peak times the country uses about 32,000MW of electricity. However, less than 60% of the capacity is available, causing a gap of about 6GW.
According to the IEA, SA’s coal consumption may recover the 5% drop experienced in 2022 over the next three years, but only if the coal power plant fleet’s performance increases.
Globally coal demand increased to a record in 2022.
“The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, IEA director of energy markets and security.
Sadamori said that despite “stubborn” coal demand, there were signs the global energy crisis was accelerating the deployment of renewable energy.
“This will moderate coal demand in the coming years, but government policies will be key to ensuring a secure and sustainable path forward.”
Record consumption
Global coal consumption increased 1.2% in 2022, surpassing 8-billion tonnes in a single year for the first time, but it was forecast to remain flat at that level through 2025 as coal consumption declines in mature markets such as Europe while remaining robust in emerging Asian economies.
“In our forecast, global coal demand plateaus around the 2022 level. However, given the current energy crisis with all its uncertainties, a lurch into growth or contraction is possible,” the report said.
The IEA expects coal production and exports from SA to fall over the next three years.
In 2021, the country’s coal production dropped almost 8% to 229-million tonnes. The decline is expected to continue in 2022, falling 3.3% due to weak domestic consumption and the poor performance by railway operator Transnet Freight Rail. Key issues, said the IEA, were large-scale cable theft (1,500km of cable has been stolen in the past five years), unavailability of locomotive and spare parts, vandalism and infrastructure bottlenecks.
“For the coming years, we expect some stabilisation of SA’s coal production but no recovery. In 2025, we forecast total coal production of 217-million tonnes,” the IEA said.
In response to the global energy crisis coal export prices increased about 400% over the past two years, but logistical challenges caused exports from SA to decline 10-million tonnes in 2021 to 63-million tonnes. The IEA said there might have been some recovery in 2022 but it forecasts coal exports from SA to decline to 53-million tonnes in 2025.
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