Sunday, July 21, 2013

Coal use booming in Asia and headed much higher says IEA report. Governments across the region ordering new coal-fired power stations-WSJ

7/19/13, "Asian Coal Use Grows Despite Gas Challenge," Wall St.. Journal, by JACOB GRONHOLT-PEDERSEN

"Sometimes dismissed as the dirty fuel whose day is nearly over because of environmental concerns and ballooning output of cleaner-burning gas, coal is on a roll in Asia, with governments across the region ordering new coal-fired power stations. 

Economic realities are outweighing worries about pollution, and coal's lower cost means its share of the energy mix in most Asian countries will rise for years, or even decades ahead. While investments in more expensive and cleaner power production are continuing, a greater emphasis on coal will provide life support for some mining companies grappling with a demand downturns elsewhere. 

It is the reverse of the scenario in the U.S., where coal's dominance is being usurped by fast-growing and cheap shale-gas output, prompting a rise in coal exports, some of which is making its way to Asia. In the U.S., gas sells for around a quarter the price it does in Asia.

The fastest shift to coal is in Southeast Asia, where local gas output can't keep up with energy demand and increasingly available supplies of Australian and Qatari gas are seen as too costly. Southeast Asians are embracing coal even as additional gas projects are rolling out around the world, including in Russia, East Africa, not to mention North America.

Coal demand across Southeast Asia may almost double between 2010 and 2020 to 230 million tons, according to the International Energy Agency, which in an April report warned that its growing use to generate electricity is undermining efforts to rein in global greenhouse-gas emissions.

“If you’re a local politician in Southeast Asia, you would definitely consider coal to have a bigger role in your energy mix,” said Graham Tyler, who heads energy research firm Wood Mackenzie’s gas and power research team in Southeast Asia.

According to Wood Mackenzie, the share of coal-fired power generating capacity in Southeast Asia’s energy mix will likely rise to 48% by 2030 from 35% now.

In Indonesia, the world's largest thermal coal exporter, the government proposed in May to alter a long-term plan to increase power generation using a variety of energy sources by raising coal's share. Malaysia is building four large coal-fired plants, adding five gigawatts of power capacity by 2019. 

Vietnam is adding nine large coal-fired plants, due online in 2015-2016, in part because exploitation of its domestic gas reserves is going more slowly than expected. A significant exporter of coal just a few years ago, it recently started importing and plans to raise coal-fired electricity capacity more than fivefold by 2020. 

In Thailand in April, power supplies became a hot issue after maintenance on a gas platform in Myanmar cut pipelined gas imports, creating power shortages that forced manufacturers to halt operations. Thailand uses gas for over two-thirds of its power needs, but officials want coal to play a larger role. 

"It is highly crucial for Thailand to introduce the use of coal in power generation in order to help shoulder the cost of natural gas," Thailand's energy minister, Pongsak Raktapongpasal, told The Wall Street Journal, adding that coal will help keep electricity prices low and enhance energy security. "When compared with other types of energy sources, coal remains cheaper," Mr. Pongsak said....

China, the world's largest coal consumer, uses it for over two-thirds of its energy, and demand is expected to rise steadily until at least the end of the decade. India could become the world's largest thermal coal importer in coming years due to mining and transport bottlenecks and stagnant domestic natural gas output. 

Japan is burning more. Tokyo Electric Power Co., operator of the Fukushima nuclear power plant, said it used roughly three times more coal in June
than a year earlier, helping offset idled nuclear reactors.
All this is good long-term news for Australia, where for the past 18 months the mining sector has been hit by falling prices and softening demand. "The construction of new thermal power plants [in Southeast Asia] is very exciting in terms of being able to sustain our industry here in Australia," said Paul Flynn, chief executive of Whitehaven Coal Ltd., one of Australia's largest coal miners.

Australian thermal coal exports are expected to rise to 183 million metric tons this year, up 7% on year, and by a further 7% in 2014, the government has forecast, despite some producers having shut mines and cut investments.

"We don't foresee a glut of LNG in Asia and don't think marginal costs for gas will come down in the long run to where they can compete with coal," said Mr. Tyler of Wood Mackenzie." via Junk Science


No comments: