India’s coal demand grew at highest pace globally in 2022
COAL & MINING

India’s coal demand grew at highest pace globally in 2022

The biggest yearly growth rate of any nation will be seen in India's demand for coal in 2022, driven by increased coal-based power generation to combat above-average summer heat and growing economic activity.

The second-largest consumer of coal in the world increased its consumption by 14% year over year (Y-o-Y) to 1,033 million tonnes (MT) in 2021, according to the International Energy Agency's most recent data.

The analysis predicted that stronger power sector use would drive the highest growth in coal demand this year, which would occur in India (7% or 70 MT), the European Union (6% or 29 MT), and China (0.4% or 18 MT).

The IEA research noted that India's consumption has increased by a factor of two since 2007 at an average annual growth rate of six percent, and it is expected to continue to drive growth in the world's demand for coal.

"In India, the government has long attempted to boost production in order to decrease imports. The first occasion that coal production exceeded 800 MT was in 2021. We anticipate that India would produce more than 1 billion tonnes by 2025," it continued.

Power sector

"We anticipate a 7% increase in coal demand in 2022. The Indian economy is performing extraordinarily well, with GDP expected to grow by 7.3% this year, according to the IEA, despite the slowdown in global growth.

A significant growth in energy consumption, of which 73% will be produced by coal-fired power plants in 2022, is substantially driving up demand.

"Due to the strong economic growth, we anticipate a 7% increase in electricity demand. The extreme heat wave that occurred from March to early May also helped to increase demand. The daily power deficit in April was up to 15% in a few states and was roughly 5% of the total supply nationwide. We anticipate a 7% increase in coal usage in the power sector in 2022 due to the tight electricity markets, the report stated.

Non-power sector

Steel and cement, two sectors that rely heavily on coal, grew in 2022. Average monthly cement production increased year over year by 11% from January to September. Before slowing down in July as the start of the monsoon season slowed down construction, the growth rate peaked in May. Production of hot metal and sponge iron climbed by an average of 6% and 1% per month, respectively.

According to the paper, "overall, we anticipate 2022 thermal coal usage outside the power industry to climb by 7% and met coal by 2%.

Global demand

Coal consumption growth is anticipated to drop significantly in 2022, increasing by just 1.2%, but still breaking previous records, totaling 8,025 MT, slightly more than in 2013. (7,997 MT).

First, limited natural gas supplies and high gas prices are pushing several nations and businesses to switch to relatively less expensive coal. Second, increased electricity consumption and decreased hydropower production in some parts of the world caused a gap that had to be supplied mostly by dispatchable thermal power plants.

Finally, the production of nuclear electricity was incredibly low in 2022, particularly in Europe where France had to shut down a sizable amount of its nuclear capacity for maintenance.

The biggest yearly growth rate of any nation will be seen in India's demand for coal in 2022, driven by increased coal-based power generation to combat above-average summer heat and growing economic activity. The second-largest consumer of coal in the world increased its consumption by 14% year over year (Y-o-Y) to 1,033 million tonnes (MT) in 2021, according to the International Energy Agency's most recent data. The analysis predicted that stronger power sector use would drive the highest growth in coal demand this year, which would occur in India (7% or 70 MT), the European Union (6% or 29 MT), and China (0.4% or 18 MT). The IEA research noted that India's consumption has increased by a factor of two since 2007 at an average annual growth rate of six percent, and it is expected to continue to drive growth in the world's demand for coal. In India, the government has long attempted to boost production in order to decrease imports. The first occasion that coal production exceeded 800 MT was in 2021. We anticipate that India would produce more than 1 billion tonnes by 2025, it continued. Power sector We anticipate a 7% increase in coal demand in 2022. The Indian economy is performing extraordinarily well, with GDP expected to grow by 7.3% this year, according to the IEA, despite the slowdown in global growth. A significant growth in energy consumption, of which 73% will be produced by coal-fired power plants in 2022, is substantially driving up demand. Due to the strong economic growth, we anticipate a 7% increase in electricity demand. The extreme heat wave that occurred from March to early May also helped to increase demand. The daily power deficit in April was up to 15% in a few states and was roughly 5% of the total supply nationwide. We anticipate a 7% increase in coal usage in the power sector in 2022 due to the tight electricity markets, the report stated. Non-power sector Steel and cement, two sectors that rely heavily on coal, grew in 2022. Average monthly cement production increased year over year by 11% from January to September. Before slowing down in July as the start of the monsoon season slowed down construction, the growth rate peaked in May. Production of hot metal and sponge iron climbed by an average of 6% and 1% per month, respectively. According to the paper, overall, we anticipate 2022 thermal coal usage outside the power industry to climb by 7% and met coal by 2%. Global demand Coal consumption growth is anticipated to drop significantly in 2022, increasing by just 1.2%, but still breaking previous records, totaling 8,025 MT, slightly more than in 2013. (7,997 MT). First, limited natural gas supplies and high gas prices are pushing several nations and businesses to switch to relatively less expensive coal. Second, increased electricity consumption and decreased hydropower production in some parts of the world caused a gap that had to be supplied mostly by dispatchable thermal power plants. Finally, the production of nuclear electricity was incredibly low in 2022, particularly in Europe where France had to shut down a sizable amount of its nuclear capacity for maintenance.

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