There is an ongoing debate in Ukraine about switching to renewable energy sources and phasing out coal. However, economist Oleksiy Kushch believes that such a step may be too premature for a country facing economic difficulties and energy dependence.
Does Ukraine need its own coal, or where is the “green transition” heading?.
And I will start not with coal, but with the forecast for oil consumption, since this hydrocarbon is a key energy resource, and its price and consumption volume are an energy benchmark.
So, the oil forecast from OPEC World Oil Outlook:
Total global demand for primary energy in conventional oil equivalent will increase by 24% by 2050, or from last year's 301 million conventional barrels per day to more than 374 million.
This is not just about oil, but all primary energy sources. That is, the world's primary energy consumption will continue to grow, despite technology.
At the same time, oil will remain a key energy carrier, despite a decrease in its share in the global energy balance from 31% to 29.3%. As we can see, the decrease is indeed purely conditional.
And global demand for oil will increase by an average of almost 18 million barrels per day by mid-century, from the current baseline of 100-103 million to more than 120 million barrels per day.
In this context, the issue of the impact of the “green transition” on the consumption of primary energy resources in the world remains important.
There are now two irreconcilable camps: some believe that the “green deal” will sharply reduce demand for fossil fuels, while others laugh at this hypothesis.
My attitude towards the “green course” is approximately this.
The transition to alternative energy sources, such as electric vehicles, undoubtedly reduces the demand for fossil fuels. But only as part of the overall trend of increasing energy demand.
That is, the demand for energy resources in the world is increasing faster than the technological progress of the "green deal" and, moreover, faster than real technical readiness and the mass market.
The second golden billion emerging in China is shaping this long-term trend of increasing energy demand.
It's one thing when a family of ten has one light bulb and a bicycle as their means of transportation, and quite another when the middle class in China (which is already 400 million people) aspires to Western standards of consumption: an apartment, a house, household appliances, air conditioners, two or three cars per family, vacation flights, mass consumption of goods and services, the production of which again requires energy, and much more.
And in the near future, a third golden billion will appear in countries such as India, Indonesia, Vietnam, Malaysia and others.
This is what is causing global coal consumption to increase overall. First of all, due to China: an increase from 12 exajoules in 1965 to 136 in 2023. That is, more than 11 times. China now accounts for 56% of global coal consumption.
And this compensated for the decrease in coal consumption in Europe, the US and other countries of the world from 40 to 25 exajoules, meaning that global coal consumption fell by 15 exajoules.
That is, in total, excluding China, the world reduced consumption by approximately 15 exajoules, and China increased it by 124. As a result, consumption did not fall, but, on the contrary, increased sharply.
And this situation will persist until the standard of living in the global economy is equalized between the main economic clusters.
Green energy is expensive and can be afforded by rich countries, while fossil fuels, especially coal, are cheap and in demand among the poor.
That is, until Asia approaches Europe in terms of living standards (mostly represented by its key clusters, such as China, India, and Indochina), demand for fossil fuels will only increase, and the “green course” will only act as a “brake” on this growth.
Therefore, it is very dangerous for Ukraine, as a poor country (let's call a spade a spade), to copy the behavior models of developed countries, especially in terms of the "green course".
And we will still need our coal, like our oil, natural gas, and even peat. Although there is a risk of losing our coal basins in the east of the country, they still remain in the west.
