SA coal consumption fell last year and is unlikely to recover in 2023, says IEA

SOUTH Africa’s coal use dropped last year making it one of a handful of countries that used less of the fuel, according to Business Live.

Citing the International Energy Agency (IEA), Business Live said consumption fell 5% to 157 million tons (Mt) owing to increased power rationing imposed by the state-owned energy utility, Eskom.

The IEA said in a forecast that coal consumption would stabilize in South Africa but it would not recover to former levels. In addition to load shedding, the IEA also said slow economic growth would have a bearing on coal consumption.

Globally coal demand increased to a record in 2022, said the IEA.

“The world is close to a peak in fossil fuel use, with coal set to be the first to decline, but we are not there yet,” said Keisuke Sadamori, IEA director of energy markets and security.

Despite “stubborn” coal demand, there were signs the global energy crisis was accelerating the deployment of renewable energy. “This will moderate coal demand in the coming years, but government policies will be key to ensuring a secure and sustainable path forward.”

Global coal consumption increased 1.2% in 2022, surpassing 8-billion tons in a single year for the first time, but it was forecast to remain flat at that level through 2025 as coal consumption declines in mature markets such as Europe while remaining robust in emerging Asian economies, said Business Live.

“In our forecast, global coal demand plateaus around the 2022 level. However, given the current energy crisis with all its uncertainties, a lurch into growth or contraction is possible,” the report said.

The IEA expects coal production and exports from South Africa to fall over the next three years.

In 2021, the country’s coal production dropped almost 8% to 229-million tones. The decline is expected to continue in 2022, falling 3.3% due to weak domestic consumption and the poor performance by railway operator Transnet Freight Rail.

Key issues, said the IEA, were large-scale cable theft (1,500km of cable has been stolen in the past five years), unavailability of locomotive and spare parts, vandalism and infrastructure bottlenecks. “For the coming years, we expect some stabilization of South Africa’s coal production but no recovery. In 2025, we forecast total coal production of 217-million tons,” the IEA said.