Coal is the world's most abundant fossil fuel and the global coal consumption hovers around 7.7 billion tons of coal per year. By 2030, forecasters expect consumption to be closer to 11 billion tons.

Coal is an important input in power generation as well as the production of steel, cement, and liquid fuels. Coal is also essential for making aluminum, various chemicals and pharmaceuticals, paper manufacturing, filters for water or air purification, carbon fibre, and silicon metals.

By-products from the coal industry are recovered and used in manufacturing of creosote oil, naphthalene, phenol, benzene, ammonia salts, nitric acid, agricultural fertilisers, soap, aspirins, solvents, dyes, plastics, nylon, and rayon.




Coal's primary use is for generating electricity. This makes up approximately 70% of all coal demand, or 5.5 billion tons per year. Coal is a preferred source of electricity in many places because it is plentiful, cheap, and has low price-volatility compared to other fossil fuels such as oil and gas. Coal generates 41% of all power in the world, making it the single most important energy source.

The amount of coal used by a country for energy depends on availability of other energy types (ie. Hydro) as well as other factors such as logistics and coal reserves. For example, South Africa (94%), Poland (93%), China (81%), Australia (71%), India (68%), and the United States (49%) are some countries that use more coal for power generation than others.





Current global electricity generation breakdown

Coal accounts for 41% and is expected to make up 43% of power supply in 2030 because of its abundance, reliability, and the growth of emerging markets.

Source and image credit: http://www.worldcoal.org



In Canada, where hydro electricity is readily available and accounts for 58% of electricity generation, coal has a lower percentage of overall power generation at 19%. However, it is the still the second most important source of power in Canada as nuclear, oil, natural gas, geothermal, wind, solar, and other energies only aggregate to 23% of total power generated.


Coal is expected to remain an important player in the global energy market. In 2030, it is estimated that coal will account for 44% of electricity generated (this is an increase from 41% in 2008). In the United States alone, coal usage is expected to increase 73% by 2030. Coal has much larger reserves than other fossil fuels. It is expected that proven coal reserves will last up to 147 years , while oil is only expected to last 40 years and natural gas is only expected to last 60-70 years. In fact, demand for coal as a source of energy is growing faster than for other sources. In 2000-2008, the average annual demand growth rate for coal was 4.7%, higher than for gas at 2.7% and 1.4% for oil.

While there are concerns about the environmental impact of coal, coal has become much cleaner over the years. Almost all effects with regard to acid rain have been negated through improved technology. And while CO₂ remains a rising concern because of climate change, coal is still the cheapest, most plentiful, and least volatile fuel type. As such, it is the preferred source of power for developing nations.



Low ash, low sulphur, bituminous coal is used to make coke, which is a fuel and reducing agent for smelting iron ore in a blast furnace.

Steel production accounts for 12% (or 650 million tons per year) of hard coal usage worldwide. Currently, 68% of all steel made uses coke. Developing markets in South Asia and the Far East make the most steel - in 2008, they accounted for over 57% of all world steel production. China alone accounted for 36.6%. Approximately 0.66 tons of coke is used for 1 ton of steel production.




Silicon metal manufacturers require a special grade of coal to produce silicon optimally. In fact, very few coals in the world can be processed to yield such a low ash level at the hardness level required by silicon manufacturers.

There are three types of coal suitable for production of silicon metals in the world. They are specific high-carbon coals that originate from Colombia, West Virginia, and the Kentucky/Tennessee border. The latter, referred to as Blue Gem Coal, is shipped to destinations such as Norway, Iceland, Egypt, South Africa, India, France, and Canada because of its exceptional value in producing silicon metals.





The market for silicon metals is 1.8 million tons in 2010. This is a 15% rise from 2009. It takes approximately 1.6 tons of special grade coal to make 1 ton of silicon metal, which means the specific global market for the special quality of coal input is 2.88 million tons. It is expected that the market will grow at a substantial rate because of rising demand from industries that use silicon metal: aluminum, solar energy, steel, and semi-conductors.

Experts anticipate that by 2025, we will need another 1.2 million tons of silicon metals produced per year solely for the purpose of fueling the demand for solar energy. This figure does not include any other demand from other industries, so it is possible that the demand in 2025 could be even higher.

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Sources

Coal prices ready to burn hot in 2010? - Stockhouse.com

World Coal Institute
Energy Information Administration - US Government
Natural Resources Canada - About Coal Decoupling from oil prices on strong global energy demand - The Jakarta Post
JP Morgan Securities 2009 forecast