The biggest annual growth rate for any nation will be seen in India’s need for coal in 2022, driven by increased thermal power output to meet higher-than-average summer demand and escalating economic activity. The second-largest consumer of coal in the world increased its consumption by 14% year over year (yoy) to 1,033 million tonnes (mt) in 2021, according to the International Energy Agency’s most recent data. According to the report, “the highest growth in coal consumption this year is forecast in India (7% or 70 mt), followed by the European Union (6% or 29 mt) and China (0.4 percent or 18 mt), which would be primarily driven by increased power sector use.
India’s consumption has increased by a factor of two since 2007 at a rate of 6% annually, according to the IEA research, and it is expected to continue to dominate the world in terms of coal demand. “In India, the government has long attempted to boost production in order to decrease imports. Production of coal surpassed 800 mt for the first time in 2021. We anticipate that India would produce more than 1 billion tonnes by 2025,” it continued.
“We anticipate a 7% increase in coal demand in 2022. The Indian economy is doing extraordinarily well, with GDP expected to grow by 7.3% this year, the IEA stated, despite the decline in global growth. In 2022, around 73 percent of the electricity consumed will be produced by coal-fired plants, significantly driving up demand. “Due to the strong economic growth, we anticipate a 7% increase in electricity demand. The extreme heat wave that occurred from March to early May also helped to increase demand. The daily power deficit in April was up to 15% in a few States and was roughly 5% of the total supply nationwide.
We anticipate a 7% increase in coal usage in the power sector in 2022 due to the tight electricity markets, the report stated. Steel and cement, two coal-intensive industries, grew further in 2022. The average monthly increase in cement production from January to September was 11% year over year. Before slowing down in July as the start of the monsoon season slowed down construction, the growth rate peaked in May. Production of hot metal and sponge iron climbed by an average of 6% and 1% per month, respectively. Coal demand growth is anticipated to drop significantly in 2022, increasing by just 1.2%, but still breaking previous records, totaling 8,025 mt, slightly more than in 2013. (7,997 mt).