Energy Musings - May 21, 2026
Across the world, coal use is rising amid the loss of LNG supplies from the Middle East. Dirty coal has been targeted by environmentalists with little success. Electricity use drives coal use.
Rebirth Of Coal, As If It Ever Died
Mark Twain reportedly told a New York journalist questioning him about his health that “the report of my death was an exaggeration.” Twain was living in London at the time, and a cousin living there was seriously ill several weeks earlier. The health prospects of his cousin were attributed to Twain, leading to numerous reports of his serious illness and death.
Much like Twain’s death being an exaggeration, coal’s demise has been predicted many times, especially by the International Energy Agency (IEA), only for global demand to climb to new highs. The IEA’s World Energy Outlook 2025 summed up coal’s status, which helps explain why the agency continues to get its coal demand forecasts wrong.
The IEA wrote, “Countries are prioritizing energy security and affordability but are reaching for different levers to achieve them. Some, including many fuel-importing countries, lean towards renewables and efficiency as solutions. Others focus more on ensuring ample supplies of traditional fuels.” In some regards, the division is between advanced economies and developing economies. Fossil fuels are often used more in developing economies because their production creates jobs, something the national economy needs to grow and prosper. The advanced economies are more inclined to favor renewable energy because policymakers are more concerned about climate change than economic prosperity.
The magnitude of coal’s role in the global energy market was highlighted in this IEA observation: “Driven mainly by China, since 2019 demand for coal has grown 50% faster than the next fastest growing fossil fuel, natural gas, a key reason why energy-related emissions have continued to grow.” The demand for coal is currently climbing rapidly, driven by the closure of the Strait of Hormuz, which has cut off the flow of crude oil, refined petroleum products, and natural gas. In the absence of fossil fuel shipments, many Asian countries have been forced to resort to more readily available fuels, such as coal.
The Wall Street Journal recently reported that coal is making a comeback due to the war in the Middle East. They cited Taiwan restarting idled coal-fired power plants. Why? Taiwan generates about 50% of its electricity from imported liquefied natural gas (LNG), which is currently in short supply.
In South Korea, the amount of electricity generated by coal plants rose by more than a third in April compared with March. This reflects the government’s decision to lift its cap on coal power generation, which previously was set at 80% of capacity. Interestingly, South Korea had joined the global Powering Past Coal Alliance, dedicated to ending the use of coal power, at the COP30 climate conference in Belém, Brazil, last year. Now it appears to be turning its back on the organization’s goal.
Italy put its coal plants on standby amid the energy shock and the growing risk of severe natural gas supply shortages. The country relies on natural gas (largely LNG) for roughly 40% of its total energy supplies. More significantly, the Italian Parliament passed a resolution to delay the phaseout of its coal-fired power plants from 2025 to 2038, by more than a decade. How does that fit with the European Union’s climate change policies, or is it an admission that the policies are unworkable?
Elsewhere in Europe, German Chancellor Friedrich Merz raised the possibility of delaying the closure of individual coal power plants in the event of a gas shortage. This was an interesting move by a nation and government dedicated to transitioning to renewable energy sources and ceasing the use of fossil fuels. Germany has the greatest coal power capacity of any nation in Europe, but it was the first country to reopen a previously mothballed coal power plant earlier this year.
Another interesting move was in India, where the western state of Gujarat directed its utility company, Tata Power, to restart a power plant that runs on imported coal. This move comes from a government entity in one of the leading nations consuming coal, largely from domestic sources. Coal generates over 74% of India’s electricity, up 3.5% in fiscal year 2025. India’s Ministry of Coal has established a target to increase domestic coal production by 42% over the next five years to support increased electricity consumption.
Global Energy Monitor’s Global Coal Mine Tracker chronicled the state of the global coal industry in 2025. It is estimated that total coal production reached 9,100 million tons (Mt), led by China, India, and Indonesia. At the end of 2025, 2,533 Mt of proposed capacity was under development, with 30% (783 Mt) under construction or in test operation. Approximately 18% (450 Mt) is permitted for further development, with roughly half in early-stage development. Last year, only about 58 Mt of new coal production capacity across 39 countries began operating in 2025. The pace of new coal mines opening is certainly accelerating to meet projected demand growth. China, India, and Australia are the top three countries for new mining projects, accounting for 85% of the projects under development.
Much has been made about China’s push to install renewable energy – wind and solar – generating capacity. People point to it as marking the end of China’s fossil fuel era. As energy writer and friend Robert Bryce has noted, China is a natural gas story, contrary to the popular narrative about renewables. He shows how much power came from the respective energy sources in 2024, and how each increased since 2010.
Natural gas is key to China’s future energy production.
As Bryce noted, China burns more coal than the rest of the world combined. Furthermore, it is constructing 227 gigawatts (GW) of new coal-generating capacity, some of which is likely to replace some significantly older plants. If none of the new capacity replaces existing generation capacity, China will have the capacity to generate 1.4 terawatts of electricity, roughly 0.1 terawatts more than the entire U.S. electricity grid.
If Twain were alive today, he might cite the coal forecasting record of the IEA as proof of the exaggeration of coal’s death. In 2015, it declared, “The golden age of coal in China seems to be over.” It predicted global coal demand to fall to 5,500 Mt by 2020.
It followed up that projection with the following prediction in the World Energy Outlook 2017. “China remains a towering presence in coal markets, but our projections suggest that coal use peaked in 2013 and is set to decline by almost 15% over the period to 2040.”
Having missed its 2020 coal-demand collapse projection of 2015, the IEA said, “Looking ahead to 2025, coal demand is expected to flatten.” Once again, it proffered, “Unless there are unforeseen developments that significantly boost coal demand in emerging Asian economies and China, it is likely that global coal demand peaked in 2013 at just over 8B tons.” In late 2024, the IEA’s coal report said global coal consumption would rise by 1% to an all-time high of 8,770 Mt that year.
In 2025, the IEA suggests that global coal demand reached a peak of 8,850 Mt, but is likely to rise further in 2026, and then peak/flatten in 2027. While the IEA has consistently gotten its coal demand forecasts wrong for a decade, it has identified the driver of consumption: electricity generation in Asian nations.
We know 2026 coal demand will rise. It will be higher because the world needs more electricity and a reliable supply, which means dispatchable power. The Middle East conflict has highlighted the risk of dependence on that region for petroleum-related energy, primarily LNG. The factor the IEA is overlooking is the growing backlash against green-energy mandates that are rapidly driving up electricity bills. The Italian Parliament may be highlighting the path forward that many countries will take with their electric generating supplies. Reliability and affordability are overtaking the demand for cleaner power at any cost. Coal will remain a significant supplier of electricity globally into the next decade. Coal’s death is widely exaggerated and wrong.