CCC/220 ISBN 978-92-9029-540-2

July 2013

copyright © IEA Clean Coal Centre

Abstract

Global consumption of commercial energy totalled 18 Gt of coal equivalent in 2010. With a 28%

share, coal ranked second after oil as one of the major sources of primary energy and natural gas (at

21%) ranked third. Gross power generation with coal was approximately 41% and gas 22%. Natural

gas as a global commodity is growing rapidly with the advent of unconventional sources such as shale

gas. Recently, gas has become the fuel of choice for new power generating plants in some countries.

Overall production of coal has increased in the same time-frame. The share of coal in electricity

production was constant in Europe from early 2000 but recently increased. This was due to the high

cost of gas in Europe and a low emissions penalty levied by the regulator, making coal currently more

competitive in Europe compared to gas. Coal utilisation continues to increase in Asia but is facing

serious competition with gas in the USA, where the share of electricity generated with coal dropped in

2012. However, natural gas used to generate electricity in early 2013 was below the high level seen

during the comparable 2012 period, when low natural gas prices led to significant displacement of

coal by natural gas for power generation. The current consensus in the USA is that while coal may

recover ground in the short term, it loses in the long term as coal plants are retired. The discovery,

production and availability of significant amounts of gas have implications for not only the price of

natural gas but also the price of coal as well as supply and demand, and utilisation of both fuels

internationally. The interaction between coal and gas in the global markets today is investigated in this

review and the near-term outlook and impact on both fuels is presented. In this report, reserves,

production and trade, supply and demand, pricing, utilisation and consumption, public attitudes and

finally near/short to medium-term prospects are discussed for both coal and gas.