Coal Power Generation Market

Market Overview

The global coal power generation market demand was valued at 2,016.86 GW in 2022. It is estimated to reach 2,285.69 GW by 2031, growing at a CAGR of 1.4% during the forecast period (2023–2031). Low cost, abundant reserves, and rising energy demand in developing countries drive the coal power generation market.

Coal is predominantly utilized as a source of energy for the purpose of electricity generation. A coal-fired power station, often known as a coal power plant, refers to a thermal power plant that utilizes the combustion of coal as its primary fuel source for electricity generation. Globally, there are over 2,400 coal-fired power plants with a combined capacity of over 2,000 gigawatts. They generate approximately one-third of the world's electricity. Coal is the most extensively used source for generating power worldwide since it is readily available and affordable.

Compared to nuclear power plants, coal-fired power plants are more dependable and secure. Coal-fired power plants are an example of fossil fuel power plants. Typically, pulverized coal is burnt in pulverized coal-fired boilers. The furnace's heat converts boiler water to steam, which is used to drive turbines that turn generators. Therefore, coal's chemical energy is successfully converted into thermal, mechanical, and electrical energy.

Market Dynamics

Global Market Drivers

Significant Availability of Raw Material

Raw material availability is a critical element that impacts all production processes, manages their setup, and contributes to market expansion. In the case of coal-fired power generation, coal is used as an energy source and is a significant basic material in producing electricity. China, India, Indonesia, and Australia are the leading coal producers in the Asia-Pacific region. In 2020, the Asia-Pacific region alone contributed approximately two-thirds of the global coal production. This readily available raw material lowers production costs and makes coal the most reliable resource for power generation, even during periods of peak demand.

In 2019, China emerged as the leading global coal producer, contributing to 46.6% of the overall coal consumption worldwide. This significant share has spurred the initiation of new ventures aimed at expanding coal-fired power generation. As a result, the Asia-Pacific region is anticipated to be the market's main growth driver for coal-fired power generation.

Transmission Infrastructure and Grid Connections 

Infrastructure and grid connections play a crucial role in developing the power infrastructure and heavily impact the contribution of different sources in the overall energy mix. Various countries in the Asia-Pacific region lack grid connections and transmission infrastructure, restricting the growth of renewable energy sources. Developing transmission infrastructure is costly and requires technical capability, limiting the growth prospects of renewable resource-based power generation.

Lack of proper transmission infrastructure, consistency in coal supply, and technological developments in coal-based plants are the factors projected to ensure stable coal-based power production over the coming years. Trends signify that the dominance of coal in the Asia-Pacific power sector is projected to limit the growth of the gas turbine industry in this region and across the globe over the next seven years, fueling the coal power generation market.

Global Market Restraint

Growing Demand for Electric Power through Clean Energy Sources

Considering the depletion of coal reserves and their negative environmental influence, there has been a surge in electricity generation from natural gas and other renewable energy sources. The abundance of natural gas and its fairly low price have increased natural gas-powered electricity generation. The increasing emphasis on generating electricity from cleaner sources and the depletion of coal reserves are expected to increase the proportion of gas turbines in the global energy balance, creating favorable conditions for expanding the gas turbine service industry.

According to a post-analysis of the preliminary data by the Energy Information Administration (EIA), natural gas overtook coal as the most common resource utilized for electricity generation in the United States in 2016. It continued to hold its position as of 2020. An increase in energy production through natural gas and renewable energy sources is anticipated to soon be a major restraint for the coal power generation market.

Global Market Opportunities

Technological Developments

Recently developed ultra-supercritical and supercritical technologies are enabling coal-fired plants to achieve higher efficiencies and significantly reduce emissions. With the assistance of these innovative technologies, coal-based power plants can significantly increase efficiency. Such technological developments by the key players are expected to offer tremendous opportunities for the market players.

Technological advancements in fly ash handling are expected to fuel the coal power generation market growth. Fly ash is a residue created upon coal burning in coal-fired power plants. Various government agencies around the world are implementing measures to control air pollution. In order to meet this requirement, manufacturers are developing ash removal systems that work well. Favorable government initiatives, such as measures to control air pollution, are anticipated to create growth opportunities for the coal power generation market over the forecast period.

Regional Analysis

Based on region, the global coal power generation market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global coal power generation market shareholder and is anticipated to exhibit a CAGR of 2.5% during the forecast period. The Asia-Pacific region has diverse economies, including developed and developing nations; however, trends in electricity generation are more or less similar across the region and favor coal-based electricity generation. New coal plants are planned to be set up in developed and developing countries in the region. Although China is a world leader in the renewable energy market, it relies primarily on coal to satisfy its power requirements. Coal power generation projects and growing industrialization in the region are the major factors boosting the expansion of the region's coal power generation market.

The availability of coal at low prices, predominantly found in the coal-rich countries of the Asia-Pacific region, is anticipated to continue to be a dynamic factor for market growth. The growing electricity consumption due to increasing energy needs in daily life, especially from developing markets, is expected to positively impact market growth.

The North American market is predicted to witness a slightly slower growth rate than the Asia-Pacific market owing to strict regulatory measures taken by the government regarding carbon emissions. Rising environmental concerns have caused the collective acceptance of alternate sources for power generation across the region. Such initiation for alternative energy generation sources is anticipated to hinder the market's growth. However, electricity-consuming countries in the region have substantially improved carbon emission intensity as the government urges to utilize green and clean fuel for power generation.

North American countries such as the U.S., Canada, and Mexico have planned/ implemented not having coal in their energy mix or have stopped using coal-based power generation. Growing environmental concerns have caused the region to collectively accept substitute energy sources for electricity generation. Such initiation for substitute energy sources for power generation is expected to hamper the growth of the markets.

Europe will likely exhibit a diminishing the coal power generation market demand. As a result, the market's growth is expected to be negative due to a greater preference for renewable energy in European nations such as France, the U.K., Germany, Italy, and Spain. Growing environmental concerns have resulted in the region's growing acceptance of substitutes for power generation. Such advent of alternative sources is anticipated to hamper the market growth throughout the European region. In addition, the governing bodies of Eastern Europe and the former Soviet Union aim to reduce 80% of its coal power generation by 2030. The European countries have planned/ implemented not have coal in their energy mix or have stopped using coal-based power generation: Countries such as Austria (free since 2020), Cyprus, Estonia, Belgium (free since 2016), U.K. (2024), France (2022), Italy (2025), Germany (end of 2021), Albania, Lithuania, Iceland, Latvia, Luxembourg, Switzerland, Sweden (free since 2020), and Malta.

In Central and South America, rapid urbanization and industrialization have resulted in rapid power demand growth over the years for both residential and commercial applications segments; hence, it is projected to create new the coal power generation market opportunities. Furthermore, the introduction of environmentally friendly technologies may hamper the market growth. Strict regulations related to GHG emissions are expected to restrict market growth further and favor alternative power generation technologies.

In contrast to coal, the Middle East and Africa region's natural gas power capacity is still growing because of the growth in new capacity addition that is anticipated to be put into service there. The region has nearly 210 GW of gas-fueled capacity, which has led to the increasing demand for power generation. With rising electricity demand in the African region, new coal power projects are being constructed, which will drive the market. However, the negative effect of the COVID-19 pandemic, a decline in power demand with the increasing share of renewables, and delays in multiple projects are expected to hamper the market.

Segmental Analysis

The global coal power generation market is segmented by technology and application.

Based on technology, the global market is bifurcated into pulverized coal (PC) systems, cyclone furnaces, and others. 

The pulverized coal (PC) systems segment dominates the global market and is projected to exhibit a CAGR of 0.8% over the forecast period. Pulverized coal firing is widespread in large-scale power plants because it offers flexible control. Coal is finely ground in this process, so 70% to 80% by weight passes through a 200-mesh sieve. Entrainment of the combustion air's particles causes the powder to burn in a combustion chamber. Since this finely ground coal has comparatively more surface area per unit weight than the larger particles, the combustion process takes place faster. In addition, pulverized coal burning is historically the largest technology category compared to cyclone furnaces or others because of increased thermal efficiency and lower pollutants. Factors such as high emission rates are expected to cater to cleaner circulating fluidized bed (CFB) systems growth over the forecasted period compared with traditional technologies.

The cyclone furnace is a fuel combustion unit used to generate heat by burning the coal contained therein, and the heat generated in the furnace is supplied to the boiler to generate steam by heating the water in the boiler. Cyclone furnaces were designed based on pulverized coal systems, which require less processing of the coal fuel. These furnaces can burn low-quality coals with a higher moisture and ash content of up to 25%. Furthermore, their ability to gather ash is one of cyclone furnace technology's greatest power generation benefits. Compared to 80 percent for pulverized coal combustion, just 40% of the ash is still present with the exhaust gases. Due to these advantages, coal furnace technology is anticipated to expand prominently throughout the forecast period.

Based on application, the global market is segmented into residential and commercial and industrial. 

The residential segment owns the highest market share and is estimated to exhibit a CAGR of 0.6% during the forecast period. Residential applications have recently contributed more than half of the coal power generation market share and are estimated to continue this dominance. Such an inclination can be ascribed to swift industrialization, especially in emerging nations. Residential buildings comprise single and multifamily homes, cooperative societies, apartments, and planned precincts. The projected rise in construction expenditure for the development of residential structures, driven by population growth and increased disposable income, is anticipated to result in higher energy consumption during the forecast period.

Moreover, as a consequence of the expanding process of urbanization, national power networks are experiencing heightened levels of strain, leading to a widening disparity between power demand and supply. This trend is fueling the need for the coal power generating market.

The commercial sectors of Asia-Pacific's developing nations have experienced rapid expansion. IT, telecom, hospitality, healthcare, and retail are a few major sectors that are growing rapidly in developing countries of Asia-Pacific, resulting in a high demand for coal power at these commercial facilities. In addition, the industrial application segment includes heavy industries, specialty chemical manufacturing, glass and cement manufacturing, pharmaceutical, and sugar mills. The industrial sector in emerging economies, including India, Mexico, Bangladesh, Brazil, and China, has highly contributed to the demand for coal power owing to the high industrial load in these countries.

Recent Developments

• July 2023- NV Energy, based in Nevada, announced that it will convert its lone coal-fired power facility to a natural gas plant. NV Energy stated in a news release that the amendment advances the company's commitment to retire its final coal-fired power facility by the end of 2025 and proposes new renewable resources for power generation within the state.
• October 2022- The Danish government ordered the energy company Ørsted to recommence operations at its oil- and coal-fired power stations to maintain the nation's electricity supply. Following the directive, Ørsted will continue operating Unit Three of the Esbjerg Power Station, scheduled to be decommissioned on March 31, 2019.