The Future of Coal

More than 2400 coal-fired power plants are in operation in 79 countries. The installed capacity of these power plants is approaching 2100 GW and 176 GW more is currently under construction. Reducing greenhouse gas emissions by phasing out coal to stop the climate crisis is arguably one of the top priorities on the global agenda. According to the Intergovernmental Panel on Climate Change (IPCC), the share of coal in global primary energy supply should be reduced to between 1-7 per cent by 2050. Coal is currently second only to oil in the global primary energy supply with a share of 26.8 per cent.

In its 2019 study, Climate Analytics said that coal-fired electricity generation should end in 2040 worldwide to keep the global temperature rise below 1.5 degrees. The report recommends that coal use in electricity generation should be reduced by 80 per cent below 2010 levels by 2030, and coal use in OECD countries should end in 2030. In its “Net Zero Emissions Scenario” for 2050 (World Energy Outlook 2021, page 37), the International Energy Agency (IEA) also suggests that the share of coal in electricity generation should fall to 8 per cent by 2030 and to 0 per cent by 2040. The Intergovernmental Panel on Climate Change (IPCC), on the other hand, states that in all scenarios aiming to stay below 2 degrees Celsius by 2050, all coal plants without carbon capture and sequestration technology should be closed.

The World Energy Council expects global coal demand to peak in 2025 at the latest and then decline. By 2050, the share of coal in primary energy supply is expected to fall to between 7 per cent and 18 per cent, depending on the scenarios. The decline in coal demand is not in line with the commitments of countries and scenarios.

In 2021, global coal consumption rose again after the coronavirus (COVID-19) outbreak, exceeding 2019 levels (IEA Coal 2021). The process that started with Russia’s invasion of Ukraine has also brought to the agenda the issue of temporarily protecting/re-commissioning coal power plants, especially in European countries, against the possibility of a decrease/interruption of gas from Russia. So far, this trend has not affected European countries’ coal phase-out plans. Most of the European countries have officially announced the dates when they will shut down their coal-fired power plants. You can follow the current situation on the map in the Coal in Europe section of our website.

In 2020, coal demand in the US and the European Union (EU) fell by around 20 per cent, India and South Africa by 8 per cent, while demand growth in China was limited to 1 per cent. However, the decline in demand started to rise again after the pandemic. Global coal demand, which broke a record in 2022 with a robust growth in Asian countries and the US, is expected to peak in 2024 at a slow pace. In parallel with the increase in demand, electricity generation from coal also increased in many regions. In 2021, electricity generation from coal increased by 16% in the US and 18% in the EU compared to a year ago. The increase in gas prices played an important role in this development. The expected increases in India and China (12 per cent and 9 per cent respectively) will mean that these countries will set new generation records in 2021. Nevertheless, coal’s share of global electricity generation is expected to reach 36 per cent in 2021, five percentage points below its peak in 2007.

Before the war between Ukraine and Russia, forecasts predicted that global coal demand would peak within two years and then decline. The timing of the peak could change due to attempts to replace gas from Russia with coal, albeit temporarily.

According to the Boom and Bust Coal 2022 report, global coal plant capacity increased by 18.2 GW in 2021. More than half of the capacity increase was due to new power plants in China. China started construction of new coal-fired power plants with a total capacity of 33 GW in 2021. When we look at the global capacity excluding China, we see that the four-year decline continues. The installed capacity of coal power plants under construction decreased by 5 GW compared to 2020 to 176 GW. While 12.9 GW of coal-fired power plants were shut down in the EU, Portugal ended coal-fired electricity generation nine years ahead of its target date. The number of countries in the world that want to build new coal power plants decreased from 41 to 34 compared to a year ago.

Projected Evolution of Turkey’s Electricity Mix, 2015 – 2023. 2015 and 2019 data obtained from TEİAŞ Electricity Statistics, 2023 targets obtained from 11th Development Plan

Future of coal-based electricity generation in Turkey

Coal-fired power generation is among the main targets of Turkey’s energy strategy. Between 2015-2019, coal-based power generation capacity increased by 50 per cent. According to the 2019-2023 Strategic Plan of the Ministry of Energy and Natural Resources, the installed capacity of domestic coal-fired power plants is targeted to reach 14,664 MW in 2023. Although the Strategic Plan does not coincide with TEİAŞ’s projections and it is difficult to reach this target by the end of 2023, it shows that the target is to increase the capacity of domestic coal power plants by 40%.

Turkey’s coal power plant project pipeline also continues to shrink. In 2021, 10.6 GW of coal power plant projects were cancelled. The imported coal-fired Hunutlu Thermal Power Plant, the first unit of which was commissioned in Adana in 2021, was realised with Chinese financing. Due to the restriction of external financing opportunities, it is expected to be difficult to realise new coal-fired power plant projects in Turkey. You can find detailed information on this issue in the Turkey section of the Rise and Fall 2022 report in the Reports section.

There are alternative perspectives on the future of the energy mix in Turkey. Turkey has abundant renewable energy resources. The utilisation of renewable energy sources, particularly wind and solar, is expected to grow significantly within Turkey’s energy system, mainly due to the impressive decline in the costs of solar, wind and other renewable energy technologies. In 2015, the combined share of wind, solar and geothermal in Turkey’s electricity generation was 5.8 per cent. By the end of 2021, the share of this mix in electricity generation increased to 16.7 per cent. Solar, wind and hydroelectric power plants with dams led the increase in installed capacity in the last five years. The total installed capacity of solar and wind power reached 18% of Turkey’s total installed capacity.

It has been widely claimed that the increasing share of wind and solar will negatively affect Turkey’s energy system. An analysis showing how the addition of large amounts of renewable energy to the grid will affect the electricity transmission system was conducted by SHURA Energy Transformation Centre. One of the important conclusions of this report is that Turkey can meet 65% of its electricity needs from renewable energy sources without making additional investments in the transmission system. In the Coal Phase Out Scenario of the report, wind and solar installed capacities go up to 74 thousand MW.