Wood Mackenzie Report Warns of Extended Coal Dominance Due to Energy Security Concerns and Technological Advancements

Strategic Insights -

A new Horizons report from Wood Mackenzie suggests that global coal demand could remain stronger for longer, potentially staying dominant through 2030, well beyond current projections for peak coal. The report, titled 'Staying power: How new energy realities risk extending coal's sunset,' attributes this extended dominance to a confluence of factors, including energy security priorities rising from geopolitical and cost shocks, Asia's young and evolving coal fleet, and rapidly electrifying global economies. According to Anthony Knutson, global head, thermal coal markets at Wood Mackenzie, extending coal's prominence through 2030 would fundamentally alter the global energy transition timeline, delaying the phase-out of the world's most carbon-intensive fuel source during a critical decade for climate action.

Key Takeaways:

  • Wood Mackenzie's base-case Energy Transition Outlook projects a decline of nearly 70% in coal-fired power generation between 2025 and 2050, driven by decreasing renewable energy costs, advancements in battery storage technology, and an increase in natural gas capacity.
  • A 'high coal demand' case, which offers a significantly different perspective, suggests coal generation could average 32% higher than the base case through 2050, with output from global coal fleets optimized to help meet steep and rapid load growth expectations.
  • Under the high coal demand case, total global coal electricity generation, unabated, is 8,146 TWh in 2025, increasing to 10,313 TWh by 2030 and 12,455 TWh by 2050.
  • Investment headwinds and shifting market forces, including a lack of commensurate investment, pose significant risks to coal markets, potentially raising prices by 2030.
  • The report emphasizes the importance of carbon capture, utilisation, and storage (CCUS) technologies in order to extend coal's operational life in a decarbonising world, stating that CCUS could theoretically transform coal's environmental profile by capturing carbon dioxide emissions before they enter the atmosphere.

Statistics:

  • Global coal demand could remain stronger for longer, potentially staying dominant through 2030, well beyond current projections for peak coal.
  • Coal-fired power generation is projected to decline by nearly 70% between 2025 and 2050 in Wood Mackenzie's base-case Energy Transition Outlook.
  • Under the high coal demand case, output from global coal fleets could increase by 2,100 GW (gigawatts) less global wind, solar, energy storage, and natural gas capacity between 2025 and 2050.
  • Abundant emissions from the coal sector would increase by 2 billion tonnes compared to the base case scenario, without carbon capture and storage investment.
  • Total global coal electricity generation, unabated, is 8,146 TWh in 2025, increasing to 10,313 TWh by 2030 and 12,455 TWh by 2050.

Sources:

  • Wood Mackenzie, 'Staying power: How new energy realities risk extending coal's sunset' (2025)
  • Wood Mackenzie, Energy Transition Outlook (2025)
  • Wood Mackenzie, 'CCUS could transform coal's environmental profile, but economics remain challenging without substantial policy support and capital investment' (2025)