Doug Sheridan: Coal Is Far From Dead

Key Takeaways

• Iran war lifts gas prices, spurring coal use in Thailand, Japan, Korea
• Italy pushes coal phase‑out to 2038; Germany's coal now outpaces gas
• Global coal capacity up 6% to 2.2 TW, offset by European closures
• Renewable installations rose ~50% since 2022, yet coal remains reliability anchor
• Short‑term coal surge may accelerate long‑term renewable deployment, analysts say

Pulse Analysis

The escalation of the Iran‑Israel war has sent natural‑gas prices soaring, forcing governments in Asia and Europe to reconsider their energy portfolios. In Thailand, coal‑fired generators have been brought back online, while Japan and South Korea have lifted longstanding caps on coal consumption. Europe mirrors the trend: Italy postponed its coal‑phase‑out deadline to 2038, and Germany now generates more electricity from coal than from gas. This rapid policy pivot underscores how geopolitical shocks can quickly alter fuel preferences, especially when gas supplies appear vulnerable.

Despite the renewed reliance on coal, the broader energy landscape is still moving toward cleaner sources. Global renewable capacity has expanded by roughly 50% since the end of 2022, driven by aggressive wind and solar deployments across the United States, China, and the EU. Yet coal remains attractive for its dispatchability and independence from weather conditions, offering a reliable back‑stop during price spikes. The net increase of 6% in global coal capacity—about 2.2 terawatts—reflects new builds in Asia offsetting plant retirements in Europe, highlighting a regional divergence in energy transition pathways.

The dual dynamics of short‑term coal resurgence and long‑term renewable growth have significant policy implications. Energy‑security concerns may encourage governments to maintain a strategic coal reserve while accelerating investments in storage and grid flexibility to support renewables. However, the temporary coal boost could delay emissions reductions if not paired with clear decarbonisation roadmaps. Stakeholders—from utilities to investors—must weigh the cost of higher‑priced renewables against the environmental and geopolitical risks of prolonged coal dependence, shaping the next phase of the global energy transition.