Coal faces a crippling demand roadblock: Goldman Sachs.

Business Spectator: “Within the space of little more than a year it (Australia’s coal mining sector) has gone from boom to breaking point. The reason is superbly illustrated in our chart of the week from the Goldman Sachs report, The window for thermal coal investment is closing.” “Goldman Sachs states that demand for coal in power generation will be gradually eroded due to three global trends:
1. Environmental regulations that discourage investment in coal-fired power plants in OECD countries, and to a lesser degree in non-OECD countries as well.
2. Strong competition from gas and renewable energy, partly driven by the shale gas revolution on the one hand (with other regions poised to emulate the success of US producers) and the maturing of wind and solar technology on the other hand (for instance in China, Europe and the US).
3. Improvements in energy efficiency at the macro level (e.g. lower electricity demand per unit of GDP) and in the power sector (e.g. lower coal burn per unit of electricity).
….The analysts conclude, “seaborne thermal coal demand could peak in 2020, and this will undermine the profitability of growth projects in the current project pipeline; the window for profitable investment in thermal coal is gradually closing.”