European Union coal demand is on course for a decades-long slide from a peak last winter as the growth in capacity of renewable power outstrips new coal-fired plants.
Across the European Union, a total of 28 gigawatts of old coal-fired capacity could come offline between 2012 and 2020, Deutsche Bank said in a recent report.
Data from the European Commission and Point Carbon show that the bloc will add around 21 GW of wind, solar and hydro capacity this year and another 140 GW between 2014 and 2020.
"Coal demand will drop this winter. Additional renewable capacity will displace gas first, but coal is next in line," Kris Voorspools, an analyst with 70 Watt Consulting, said.
"Meanwhile the new plants that have come online this year are vastly more efficient than the recently retired museum pieces," he added.
This winter, new hard coal-fired power stations will need less coal to generate the same amount of power than older plants did last winter.
Over the past decade, coal's share of the EU's power generation fuel mix has stayed roughly around a quarter as utilities pay low prices for coal and for emissions permits under the EU's carbon trading scheme.
But EU member countries' policies on renewables and new power plants are finally starting to have an impact on the need for coal.
The European Union's coal-fired generation is likely to be down by 3 per cent in the final three months of this year from the 2012 fourth quarter and by 5 per cent in January-March from the 2013 first quarter, Point Carbon estimates.
Last winter, northern Europe endured some of the coldest temperatures for March on record. Long-range forecasts for next winter are unlikely to be finalised for another few months, but few analysts expect this winter to be as cold or last as long.
"This winter is likely to be milder than the previous one, meaning exports of power from coal-intensive Germany to its neighbours is likely to fall and drive down demand for fuel," said Yan Qin, a Point Carbon analyst, a sister company of Thomson Reuters.
Goldman Sachs has forecast that Europe's total hard coal demand will fall 7 million metric tons (7.716 million tons), or 3.5 per cent, to 191 million metric tons for 2014 as a whole.
A fall in coal burn would worsen the woes of coal producers in Britain, Poland and Spain, many of which have already asked for government help in view of weaker prices, mounting losses and cheap imports.
The 28-nation bloc imports almost the same amount of thermal coal as China, and its demand is vital for coal miners in Russia and the United States, where domestic demand has stalled as gas has become a more attractive option.
"Demand growth for power generation, wind power output and the type of winter are probably the big three drivers of coal demand in the short term," said Christian Lelong, a coal analyst with Goldman Sachs.
Germany this year is expected to add around 5 GW of renewable energy capacity, according to figures from the European Commission and Point Carbon.
Germany is also adding substantial coal-burning capacity – 5 GW this year and another 3 GW in 2014.
The yield on its new coal plant capacity, or load factor, will run 75-80 per cent over the winter, compared with the average for its wind and solar production at 25 per cent, consultants Poyry said.
"There is little doubt that these new efficient coal plants will run baseload (24 hours)," Poyry consultant Phil Hare said.
In Britain, meanwhile, coal-fired generation is expected to fall by 1 to 2 per cent from last winter after around 5 GW of capacity at antiquated plants have been taken offline this year under the EU's Large Combustion Plant Directive.
These older power stations had operated at around 40 per cent of their overall generating capacity, however, and the impact on coal demand is likely to be less than the closures might first suggest, the IEA Clean Coal Centre said.
No new coal-fired plants can be built in Britain unless they capture and store carbon emissions.
Germany is also likely to build few, if any, new coal power stations from 2015 because of weak wholesale electricity prices, falling demand, environmental opposition and subsidies for renewables.
The prospect that coal demand will start to tail off sharply is likely to make it tougher for coal miners to stay in business.
This year UK Coal, Britain's biggest producer, asked for government support to stave off bankruptcy, and Poland's Kompania Weglowa, the biggest EU hard coal producer, is considering asking a state agency for a bailout, Reuters reported earlier this month.