How a Super El Niño Could Reshape Global Coal Markets
Most countries are finding ways to reduce their use of coal and coal-burning power plants as they strive to meet climate commitments. The pariah fossil fuel has wide-ranging impacts on human health and the environment, from extraction through combustion and waste disposal. Burning coal releases fine particulate matter, sulfur dioxide, nitrogen oxides and heavy metals. Inhaling these fine…
The world is witnessing an unprecedented El Nino event, dubbed the "Super El Nino," which could significantly reshape global coal markets. This intense climate pattern, projected by the World Meteorological Organization and the National Oceanic and Atmospheric Administration, is forecasted to be the most destructive in 50 years. El Nino events typically last between nine and twelve months, but this one could persist through February 2027, raising concerns about extreme weather risks.
The Super El Nino is already impacting coal consumption differently across regions. In India, the world's second-largest coal consumer, the El Nino is driving up coal usage due to a generation gap caused by reduced hydropower and wind output. This could lead to a nearly 18 TWh increase in coal-fired power generation, releasing an estimated 17 million tonnes of CO2.
India's coal-fired generation has already surged by 25.7% in October 2024, with 100 of its 191 coal-fired power plants operating with critically low fuel stocks.
On the other hand, regions like China, Japan, South Korea, and Taiwan may experience less coal consumption during the Super El Nino. Warmer and wetter winters in China, coupled with stronger regional hydropower due to heavier winter rainfall, could lower the requirement for thermal coal power generation. Meanwhile, Indonesia, the world's largest thermal coal exporter, faces drought conditions during El Nino, which can slow down coal transport and reduce export volumes.
The Super El Nino's effects on renewables are also noteworthy. Solar power may drop in places like California and southwestern China, while hydropower could dry up in the US Pacific Northwest and southern Africa. Overall, the Super El Nino could lead to a shift in global coal markets, with increased demand in some regions and reduced demand in others, driven by the complex interplay of climate patterns and energy demands.
Written by urgent.news from OilPrice's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
