Coal is often seen as the controversial black sheep of the energy world. Images of plumes of black smoke rising from power station chimneys, workers down coal mines and smog lingering over city skylines are stark images known to generations across the western world, especially in Europe.

However, at a time when you would think coal was about to confined to the pages of history, as renewables become cheaper and trendier (especially solar, wind and hydro), global demand for coal is actually on the rise, according to a new report published this week by the International Energy Agency (IEA).

Below is some of the key findings from the new IEA report:

• After two years of declines, coal demand rose 1 percent last year, as global economic conditions improved, industrial output rose and demand for electricity increased.
• Global coal power production rose 3 percent and accounted for 40 percent of all new power generation.
• Despite the United States and Western countries looking to reduce usage, coal has managed to maintain its market share and accounted for 38 percent of the global power mix.
• Demand is rising in China and India and across most of Asia, so much so that global demand is forecast to remain stable until at least 2023.
• While Europe is shrinking its usage, coal importation saw a rebound in many countries, with Brazil, Taipei, Korea, Malaysia, Mexico, Morocco, Philippines, Pakistan, Turkey and Vietnam boosting usage. In fact, Chile, Japan and Thailand saw record usage.
• Despite healthy demand and high prices, there has been little investment into the sector. “Banks, insurance companies, hedge funds, utilities and other operators in advanced economies are exiting the coal business. In many parts of the world, growing opposition to coal projects has provided strong disincentives for investors,” the IEA report said.
• Western Europe is accelerating its exit on coal, citing climate concerns. Along with the expansion of renewable energies, by 2023 at least two more countries, France and Sweden, will have closed their last coal power plants, leaving Germany as the only major coal consumer in Western Europe.

(Read a PDF of the report's summary here and download the full report here).

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The continued popularity of coal in Asia is also reflected in the Middle East, even in United Arab Emirates. According to the UAE Energy Strategy 2050, unveiled last year, the government wants to increase the contribution of clean energy, but coal will still account for 12 percent of power generation by the time we reach the middle of the current century. (Read more here).

Dubai is also building the Hassyan Clean Coal project, which is currently under construction and due to begin operating in 2020. Commissioned by the Dubai Electricity and Water Authority (DEWA) in November 2016, the $3.3 billion power station is a joint venture with ACWA Power Harbin Holding Company, consisting of Saudi Arabia's ACWA Power and China's Harbin Electric International.

"Once fully completed by 2023, this clean coal power station will be the first of its kind in the Middle East, a symbol of UAE-China green energy partnership, and a successful joint venture under China's Belt and Road Initiative," Tie Sijia, deputy manager of the Dubai Hassyan Power Plant project, was quoted as saying by the Xinhua Chinese news agency in July.

Similarly, Oman is embracing coal and in April announced its first coal-fired independent power project will be built in Duqm, according to a report in the Muscat Daily, citing information from the Oman Power and Water Procurement Company (OPWP). (Read more here).

Further reading:
War on coal is heating up but China is still the key - Russell 
Coal's lingering role complicates climate change efforts - Kemp 
Chinese consortium wins Egypts Hamrawein coal-fired power plant construction 
India boosts purchases of Indonesian coal as prices drop - Russell 
Oman's first coal-fired power plant to be established in Duqm 
GE eyes role in Oman's clean coal power ambitions 
DEWA reaches financial closure for 2400MW Hassyan clean coal power project 

(Writing by Shane McGinley; Editing by Walid El Tigi)
(shane.mcginley@refinitiv.com)

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