Australia's power sector is at risk of a "utility death spiral" due to its reliance on coal, along with utilities in the US, Japan and Germany, according to a report highlighting the environmental-related risk of coal producers.

Additional pressures on the coal industry is coming from the shift by countries such as China and India to rely on domestic sources for coal, rather than imports, to feed their surging demand for electricity generation.

Government greenhouse accounts released in December showed national emissions were rising. Credit:Jonathan Carroll

The report, by the University of Oxford's Smith School of Enterprise, pointed to the emergence of renewable sources of energy such as solar and wind, along with competition from gas as additional pressures for the sector.

Other issues include water stress, concerns over air pollution, changes to government policies and the challenge of carbon capture and storage technology, the report noted.