The Super El Niño phenomenon, which is predicted to be one of the most destructive climatic events in the last 50 years during 2026-2027, will have profound impacts on the global coal market. This phenomenon, which typically occurs every two to seven years and lasts between 9 to 12 months, can affect the demand and supply of coal in different regions of the world.
Impacts on Coal Demand in India
Recent reports indicate that India, as the second-largest coal consumer in the world, is currently facing an increase in demand for coal-based electricity generation. According to analyses, if El Niño continues, India may face a power production shortfall. Analysts estimate that this shortfall could reach 18 terawatt-hours (TWh), primarily supplied by coal. It is expected that the increase in coal production will lead to approximately 17 million tons of carbon dioxide emissions.
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Impacts on Coal Supply
While India is increasing its coal production, other countries like China, the largest coal consumer, may face a decrease in coal consumption. Heavy rainfall in southern China and improved hydropower production capacity could reduce the need for coal-based electricity generation. Additionally, countries like Indonesia, the largest exporter of thermal coal in the world, will face droughts, which will consequently reduce coal loading capacity in inland rivers.
As a result, Super El Niño could simultaneously increase demand in some regions while limiting supply in others. This situation could lead to fluctuations in coal prices in global markets and have significant impacts on the energy security of various countries.
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