fossil fuels
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In 2018, the African Development Bank announced its intention to back coal-fired projects in Nigeria, Kenya and Senegal in a departure from the International Monetary Fund (IMF) policy, which has a ban on fossil fuels.

“Africa must develop its energy sector with what it has. Endowed with many different energy sources – both renewable and conventional – Africa needs a balanced energy mix. This must include renewable and conventional sources of power,” remarked Akinwumi Adesina, president of the African Development Bank, in a statement delivered at the Africa Union Summit in 2017.


This article first appeared in ESI-Africa Edition 1, 2019. You can read the magazine’s articles here or subscribe here to receive a print copy.

“Africa must develop its energy sector with what it has. Endowed with many different energy sources – both renewable and conventional – Africa needs a balanced energy mix. This must include renewable and conventional sources of power,” remarked Akinwumi Adesina, president of the African Development Bank, in a statement delivered at the Africa Union Summit in 2017.

Notably the conventional sources of power that Adesina alludes to include coal-fired power. Let’s examine this market. Global coal demand is set to remain stable over the next five years, according to the International Energy Agency’s latest coal market report, Coal 2018.

However, air quality and climate policies, coal divestment campaigns, phase-out announcements, declining costs of renewables and abundant supplies of natural gas are all putting pressure on coal.

As a result, coal’s contribution to the global energy mix is forecast to decline slightly from 27% in 2017 to 25% by 2023. Notably, South Africa, Botswana and Zimbabwe obtain the majority of their electricity from coal, and new research at Wits University has shown how emissions can be reduced, and other chemicals captured for sale as a by-product in the making of steel.

Furthermore, the Coal 2018 report indicates that coal demand grows across much of Asia due to its affordability and availability. In the region, the report pinpoints India, which sees the largest increase of any country, although the rate of growth, at 3.9% per year, is slowing, dampened by a large-scale expansion of renewables and the use of supercritical technology in new coal power plants.

Significant increases in coal use are also expected in Indonesia, Vietnam, Philippines, Malaysia and Pakistan. Coal in China accounts for 14% of global primary energy, the largest in the world. Developments in the Chinese coal sector have the potential to affect coal, gas and electricity prices across the world, for instance through inter-fuel substitution or regional arbitrage.

This puts China’s coal sector at the centre of the global energy stage. While China accounts for nearly half of the world’s coal consumption, its clean-air measures are set to constrain Chinese coal demand going forward.

As such, Chinese coal demand is anticipated to fall by around 3% over the next five years.

Phasing out of coal-fired generation

Meanwhile, in a growing number of countries, the phase out of coal-fired generation is a key policy goal. But market trends are proving resistant to change. “The story of coal is a tale of two worlds with climate action policies and economic forces leading to closing coal power plants in some countries, while coal continues to play a part in securing access to affordable energy in others,” said Keisuke Sadamori, director of energy markets and security at the IEA.

“For many countries, particularly in South and Southeast Asia, it is looked upon to provide energy security and underpin economic development,” Sadamori added.

The IEA sees technologies like Carbon Capture, Utilisation and Storage (CCUS) as essential tools to bridge current and future energy needs with global and national climate ambitions.

To help build a new momentum behind the technology, the IEA and the government of the UK recently co-chaired an international summit where ministers, senior governmental officials across the world, CEOs from major energy companies and the financial community came together to identify practical steps to accelerate investment and deployment of CCUS.

“Tackling our long-term climate goals, addressing the urgent health impacts of air pollution and ensuring that more people around the world have access to energy will require an approach that marries strong policies with innovative technologies,” said Sadamori, adding that “it must rely on all available options – including more renewables, of course – but also greater energy efficiency, nuclear, CCUS, hydrogen, and more”. ESI

This article first appeared in ESI-Africa Edition 1, 2019. You can read the magazine’s articles here or subscribe here to receive a print copy.