India Blackouts: India and China Increasing Coal Demand Could Lead to a Global Energy Crisis

Impact

India received global attention after the historic blackouts last month that put over 600 million people in the dark. Following the media aftershock thereafter, one thing was made abundantly clear: coal is existential for developing economies.

India and China are heavily dependent on thermal or non-coking coal for electricity generation. In India, for instance, 60% of electricity capacity is dependent on coal-fired generators. In China it’s as high as 80%. As a result, both countries have been characterized as drivers (and dampeners) of the global thermal coal market – and the demand is indeed robust. In the last fiscal year, India purchased $3.5 billion worth of thermal coal, importing up to 42 million tons from trade partners like Indonesia and South Africa. That number is expected to double this year.