Global coal power hits record as Spain shuts plants

Coal power: global record while Spain shuts plants

In 2021, the world burned more coal for electricity than at any other time on record. The International Energy Agency quantified this surge—a 9% annual increase—and warned that demand could reach new historical highs "as early as this year." The uncomfortable detail: this record in coal-fired generation occurred while Spain dismantled its last thermal plants and household bills faced consecutive hikes.

India and China, home to nearly 3 billion people combined, accounted for two-thirds of global demand and saw the largest increases, despite deploying massive volumes of renewables. This is not a contradiction; it is a race where low-carbon energy does not grow as fast as consumption.

Which countries are driving coal demand?

The agency stated precisely: the economic recovery in 2021 boosted electricity demand "much faster than low-carbon supplies could keep up with." Expensive natural gas made coal more cost-competitive, pushing its use higher. A 9% rise in one year for a technology that had declined for two years prior. This is market arithmetic, not mystery.

Industrial trends reinforce this. At the time of discussion, there were 458 new coal-fired thermal plants under construction worldwide. Europe legislates against coal while importing electricity generated by it outside its borders: the EU, led by Spain, has increased purchases from non-EU plants.

Why did Spain close its thermal plants if it has coal?

Spain holds known reserves of 4.5 billion tonnes of coal, enough for centuries at an extraction rate of 5 million tonnes annually. It remains underground. What changed was the law: climate change legislation prohibits extracting coal, gas, oil, or uranium domestically, and the Government committed to Brussels to decommissioning thermal plants.

The argument supporting closure is climatic. The counterargument is economic: in 2017, domestic coal reduced electricity bills by over €350 million per year, and a mix of nuclear, coal, and hydro kept domestic prices around 4 cents per kWh, according to calculations cited in the thread. In 2021, the average price hit €288.53/MWh on October 7, peaking at €319.03.

Estimates circulating then suggested Spanish households would see bills rise by €475 between 2021 and 2022.

Coal not burned here comes from abroad

This pattern has repeated since 2018: Spain closes mines and plants while buying electricity produced with coal from Segarro, and Endesa reactivated the As Pontes thermal plant during the price surge. Proponents of domestic coal argue that importing kilowatts instead of burning them locally does not reduce atmospheric CO2 by a single tonne; it just moves the chimney elsewhere.

Does coal become expensive if demand rises?

Here lies the crux. Recurring analysis argues that abundant reserves make real supply issues unlikely until next century, and that coal prices did not trinc oil's trajectory after the post-WWII industrial boom: they even fell for twenty years.

The counterargument is basic capitalism: a good's price is set by what buyers can pay, and if gas is unavailable, coal is burned at gas-like prices. There is also the debated thesis that liquefied gas emits more CO2 than mine-mouth generation. The issue remains unresolved.

Are efficient coal plants available?

Several participants advocate for advanced ultra-supercritical (AUSC) plants, capable of operating above 700 degrees and exceeding 50% efficiency, reducing coal consumed per kWh. They argue that the most efficient renewables hover around 23-24% and depend on sun and wind.

The drawback is capital cost and construction time. The advantage is that China is already deploying them. Part of the analysis suggests Europe cannot ban such technology by decree. Meanwhile, the energy mix changes on its own.

Germany burns lignite, France keeps nuclear

The European mirror is uncomfortable. Germany restarted lignite burning in North Rhine-Westphalia—with relocation of several villages to access the mineral—after closing its nuclear plants without firm replacements. France maintains its nuclear fleet and has enjoyed cheaper electricity than Spain.

In short: countries that did not abandon firm baseload power avoided similar bill shocks. Price is determined by availability, not climate virtue.

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When widespread peninsular supply outages occurred later, the debate returned to the same point: without plants that start on demand, there is no energy to transport, regardless of grid capacity. 2022 data confirmed the 2021 record. Coal has not disappeared. It has simply changed countries.