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Tuesday, 04 June 13
WOOD MACKENZIE SAYS THE CHINA'S THERMAL COAL DEMAND WILL REACH NEARLY 7BTPA BY 2030
 COALspot.com - The Illusion of Peak Coal' says that despite efforts to limit coal consumption and seek alternative fuel options, China's strong appetite for thermal coal will lead to a doubling of demand by 2030. China’s demand will grow to approximately seven billion tonnes per annum (btpa) of thermal coal which is contrary to speculation that China's thermal coal demand may be reaching a peak in the next decade.
"It is very unlikely that demand for thermal coal in China will peak before 2030," states Mr. William Durbin, Wood Mackenzie’s Beijing-based President of Global Markets. "Why? Because China’s aggressive investment program for nuclear, natural gas and renewables capacity is centred in the coastal region while coal-fired capacity grows in the central and western provinces. Indeed, there are also a plethora of coal-intensive conversion projects being built or planned that are significantly adding to demand.”
"Wood Mackenzie’s analysis already takes into account a rapid improvement in energy efficiency the likes of which have not been seen. We expect power demand per unit of GDP to fall by half in just 17 years, an extraordinary achievement for an economy experiencing such sustained growth. In spite of this efficiency improvement, power demand is still set to nearly triple to 15,000 Terawatt hours (TWh) by 2030. Indeed, if expected efficiency improvements do not materialise, then in the absence of alternatives, coal demand could increase further."
Coal is an important natural resource for a number of provinces seeking investment, jobs and tax revenues. Already there are government-approved coal conversion projects (coal-to-gas, coal-to-liquids, coal-to-petrochemicals) that account for over 0.25 btpa of thermal demand. Additionally, there are planned projects that will increase demand by another 0.6 btpa. Mr. Durbin notes that “Total Chinese industrial demand for thermal coal is expected to grow from 1.5 to nearly 2.1 btpa by 2030. In comparison, the US, the world’s second largest domestic market for coal, consumes only 1.0 btpa in total. If a cap on coal consumption in China is imposed, it will come at a cost to provincial economies.”
In order for China to reduce power-driven demand for coal, a significant increase in the availability of natural gas for the power and industrial sectors is required. But Wood Mackenzie believes natural gas supplies will struggle to meet demand growth due to modest investment in conventional reserves and the very slow development of domestic unconventional shale gas reserves. Additionally, the high cost of LNG and pipeline imports is uncompetitive with low cost coal.
China’s gas price and power tariff regulations will need to be reformed in order to create incentives for the national oil companies (NOCs) to make expensive investments in unconventional gas. Mr. Durbin highlights, “Our analysis already assumes an intensive investment program in unconventionals post-2020. To ramp up shale gas developments and production faster to displace coal will require a near-doubling of investment. We expect coal to hold its cost advantage until shale gas breakeven costs fall by 40-50%."
Aside from coal substitution by natural gas, China hopes to reduce coal usage in the coastal demand centres by building Ultra High Voltage (UHV) electricity transmission lines from the Northwest and Southwest. Wood Mackenzie's report says this will have a limited impact on coal demand. The transmission lines from the northwest will transmit coal-fired generation; hence, it just moves coal demand from the coast to the interior. The UHV lines from the southwest will transmit seasonal hydro, requiring base load coal when hydro output falls. The net effect of the UHV lines and the non-coal-fired capacity is a flattening in thermal coal demand in the coastal power region.
Mr. Durbin concludes, "Government mandates to improve the environment by reducing coal use will require steep investments in alternatives, the use of emission control technology or reduce economic growth rate targets further—options which are not currently happening. But what is noteworthy, however, is that there is greater potential for further demand growth beyond our expectations. Failure to meet an aggressive non-coal power capacity build, investment in more efficient technologies and the expansion of the UHV network will increase the dependence on and use of coal. In the end, China's thermal coal demand will see persistent growth until 2030, rendering peak coal an illusion.”
Source: Wood Mackenzie
About Wood Mackenzie
Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries. We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
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Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Bhushan Steel Limited - India
- Indonesian Coal Mining Association
- Bulk Trading Sa - Switzerland
- Savvy Resources Ltd - HongKong
- Binh Thuan Hamico - Vietnam
- ASAPP Information Group - India
- London Commodity Brokers - England
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- Africa Commodities Group - South Africa
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- ICICI Bank Limited - India
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- Kohat Cement Company Ltd. - Pakistan
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- Kaltim Prima Coal - Indonesia
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
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- Asia Pacific Energy Resources Ventures Inc, Philippines
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- Australian Coal Association
- Wood Mackenzie - Singapore
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- Coalindo Energy - Indonesia
- India Bulls Power Limited - India
- Mintek Dendrill Indonesia
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- White Energy Company Limited
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- Indian Oil Corporation Limited
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- Anglo American - United Kingdom
- Planning Commission, India
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Minerals Council of Australia
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- The State Trading Corporation of India Ltd
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Australian Commodity Traders Exchange
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
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- Medco Energi Mining Internasional
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Goldman Sachs - Singapore
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Therma Luzon, Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- PTC India Limited - India
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Gujarat Sidhee Cement - India
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- Agrawal Coal Company - India
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- Eastern Coal Council - USA
- Krishnapatnam Port Company Ltd. - India
- Bhatia International Limited - India
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- Star Paper Mills Limited - India
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- Sindya Power Generating Company Private Ltd
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- Banpu Public Company Limited - Thailand
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- Sojitz Corporation - Japan
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- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Transport, Egypt
- Wilmar Investment Holdings
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- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Bukit Makmur.PT - Indonesia
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Parliament of New Zealand
- Holcim Trading Pte Ltd - Singapore
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Edison Trading Spa - Italy
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bank of Tokyo Mitsubishi UFJ Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Meenaskhi Energy Private Limited - India
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- Sakthi Sugars Limited - India
- Riau Bara Harum - Indonesia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Power Finance Corporation Ltd., India
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Global Business Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- The University of Queensland
- Formosa Plastics Group - Taiwan
- International Coal Ventures Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Kapuas Tunggal Persada - Indonesia
- Essar Steel Hazira Ltd - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- SN Aboitiz Power Inc, Philippines
- Cement Manufacturers Association - India
- Indo Tambangraya Megah - Indonesia
- Chamber of Mines of South Africa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Oldendorff Carriers - Singapore
- Xindia Steels Limited - India
- PetroVietnam Power Coal Import and Supply Company
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Aditya Birla Group - India
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Economic Council, Georgia
- Port Waratah Coal Services - Australia
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Singapore Mercantile Exchange
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Coastal Gujarat Power Limited - India
- IEA Clean Coal Centre - UK
- South Luzon Thermal Energy Corporation
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- New Zealand Coal & Carbon
- Siam City Cement PLC, Thailand
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Uttam Galva Steels Limited - India
- Salva Resources Pvt Ltd - India
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Manunggal Multi Energi - Indonesia
- Romanian Commodities Exchange
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