War and weather is driving demand

In 2021, COP26 in Glasgow had a breakthrough that climate negotiators heralded as a step towards the goal to “consign coal to history.” Three months later, Russia attacked Ukraine, sending global energy markets into disarray, reshuffling national energy mixes, and challenging the world’s climate ambitions.


As natural gas prices rose is response to the drop in Russian gas, Europe switched to coal. Droughts and heatwaves in China and technical issues with France’s nuclear fleet—the largest in Europe—meant less hydro and nuclear power that solar and wind couldn’t replace, driving even more demand towards coal and natural gas.

Overall, both Europe and India’s demand for coal rose in 2022. China’s increased slightly from a high base, while coal use declined in the US.


Despite the overall global increase in coal use, it could be worse. Some dynamics are tempering the demand, including high coal prices and the looming recession. China uses about half the world’s coal, but strict covid lockdowns, followed more recently by waves of covid infections that have hobbled factory production, slowed down economic activity, and reduced demand for coal.

The same dynamics are driving renewable energy generation

On the brighter side, the tumultuous year in energy has also spurred investment in renewables. According to the IEA’s 2022 renewables report, the world is expected to install 2,400 gigawatts (GW) of renewable power in the next five years, equivalent to China’s entire power capacity, and a sharp acceleration from previous years. The war in Ukraine may have caused a step backward towards coal, but it also may have caused two steps forward on renewables.

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