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Global Coal-Fired Power Generation Falls as Prices Soar and China Slows

SINGAPORE—Global coal-fired power generation fell by 1.2% during the first half of 2022 from a year earlier, according to an analysis of energy consumption data, as a sharp economic slowdown in China and a surge in global coal prices after Russia’s invasion of Ukraine crimped demand.

Meanwhile, power generation from renewable sources increased 17% year-over-year in the first half, led by capacity increases in the U.S. and China, according to a report published Thursday by S&P Global Commodity Insights, a market research firm.

The two concurrent developments mean that global emissions fell by about 1% in the first half of 2022, even as power demand increased by 2.5% and European nations turned to coal in a bid to wean themselves off Russian natural gas.

“The drop in emissions may seem surprising given the popular narrative that focuses on fossil energy security, but in reality it is quite straightforward—high fuel prices lead to less demand,” said Xizhou Zhou, Washington-based vice president at S&P Global Commodity Insights.

Developments in China, which accounts for more than half of global coal consumption, had perhaps the largest impact.

Coal-fired power generation had been expected to grow 4.1% in China from 2021 through 2024, according to the International Energy Agency. But in the first half of the year, the world’s second-largest economy sputtered amid renewed Covid-19 restrictions and a slump in the real-estate sector, causing economists to sharply downgrade their growth expectations for the year.