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Tuesday, 17 March 15
GAS TO CHALLENGE COAL IN THE ASIAN POWER GENERATION MIX - WOOD MACKENZIE
 KNOWLEDGE TO ELEVATE
Wood Mackenzie says that coal is facing increasing competition from gas in the power sector. Coal has dominated as the fuel of choice in Asia, even in the gas-centric power markets of SE Asia since 2010. In recent years, it has been assumed that coal will remain the most economical option for power generation. However, downward pressure on gas prices as well as individual market conditions in Asia are creating conditions in which it might compete with coal in the region.
Mr Graham Tyler, Research Director for Asia gas & power says, "While gas-coal competition is more commonplace in the US and Europe, in Asia, this is a new dynamic as coal and gas prices have not been at close enough levels for this to be a consideration. Spot LNG prices have fallen to around US$7 per million British thermal units (mmbtu) in recent months and we do not forecast any sustained price recovery above US$10/mmbtu with over a 100 million tonnes per annum (Mtpa) of new LNG expected to be operational by 2020. This looming supply glut will create an environment where coal versus gas competition in Asia is a real possibility." Asia's near-term gas demand growth is slowing, primarily due to a weaker economic growth and structural changes in the key market of China.
Turning to coal, Mr Prakash Sharma Research Director for Asia coal markets, says, "Benchmark thermal coal prices in the seaborne market are trading below the marginal cost of supply for many producers, and therefore are unlikely to fall significantly lower in the future. Coal prices are sitting at multi-year lows due to several factors including weakening demand and domestic protectionism in China: Delivered thermal coal prices have fallen from a peak of around US$110 per tonne (US$/t) in 2012 to below US$80/t in recent months already and historically, coal prices only fluctuated within a narrow band of US$2-4/mmbtu." Currently coal accounts for half of all power generation across Asia, while gas only accounts for 11%. However with coal prices not expected to fall more dramatically and gas prices expected to see renewed softening after this summer, Wood Mackenzie asserts that the price differential between gas and coal will be one to watch.
Mr Tyler says; "The price differential is key but there is not one single price across Asia at which gas will compete with coal. Instead, environmental initiatives and individual market influencers will determine the points at which the scales will tip in favour to gas. This is because Asia is not a singular gas market. Rather, it is a diverse range of markets with differing characteristics such as levels of economic development, fuel resources, market structures and government policies. The power markets are also discrete and have different dynamics even within some countries. Consequently, the factors that set the price at which gas will compete with coal differs between each market."
Wood Mackenzie's analysis points to China, South Korea and Malaysia as examples of this market diversity. Mr Tyler explains, "South Korea reflects a mature economy with an energy market dependent on imported fuels, and therefore has relatively high fuel costs. It has also introduced a carbon cap and trade scheme in January, which will favour gas due to its lower carbon content and thus; lower related carbon costs. Whereas in China, air quality is a key issue and gas-fired power generation is subsidized in some provinces. China is also introducing a national carbon trading scheme; and other markets are also implementing or looking at carbon initiatives. These factors all make gas the more attractive option."
Wood Mackenzie expects that pressure on the regulated price will allow an increase in gas-fired operation For example, Peninsular Malaysia is currently oversupplied with pipeline gas - a situation forecast to continue until 2020. Mr Tyler says "We have already seen delays to new-build coal plants currently under-construction in Malaysia. In a low commodity price world, where local gas production is over-supplied, if gas prices stay attractive we may see gas having a greater role. With weak gas prices and increasing environmental pressures, the cost of switching to gas-fired plants could become more economical. This shift in the competitive dynamic between coal and gas must now be front of mind for energy planners, utilities and fuel suppliers."
Wood Mackenzie says that Asia's strong long term economic growth will see power demand growth average 5% a year through to 2030, which will require over 2,000 gigawatts (GW) of additional power generation capacity to be built between now and then. With gas prices set to remain soft and increasing environmental pressures, it's likely gas will account for a higher proportion of this new power generation. As long as gas prices remain low, industry players need to continue to watch for individual market influencers to see where the most upside for gas may emerge
About Wood Mackenzie:
Wood Mackenzie is a global leader in commercial intelligence for the energy, metals and mining industries. We provide objective analysis and advice on assets, companies and markets, giving clients the insights they need to make better strategic decisions.
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Thursday, 26 March 15
KYUSHU ELECTRIC POWER OF JAPAN HAS JOINED GLOBALCOAL ONLINE COAL TRADING PLATFORM
globalCOAL® announced today that Kyushu Electric Power, one of Japan’s largest utility companies, has joined its online coal trading plat ...
Wednesday, 25 March 15
MARKET INSIGHT: TANKER CHARTERING - KATERINA RESTIS
The 1st of January 2015, as broadly reported, denoted the beginning date of new and progressive emission regulations for vessels operating within t ...
Wednesday, 25 March 15
AUSTRALIA SET TO ONCE AGAIN BE THE WORLD'S LARGEST COAL EXPORTER - COAL, MINERALS COUNCIL OF AUSTRALIA
Greg Evans, Executive Director - Coal, Minerals Council of Australia
Media Release: The latest Resources and Energy Quarterly published by the ...
Wednesday, 25 March 15
AUSTRALIA UPSTREAM ENERGY FIRMS FACE RISING OIL PRICE EXPOSURE - FITCH
Fitch Ratings says the Australian oil and gas companies involved in exploration and production face higher exposure to oil price-linked revenues, w ...
Wednesday, 25 March 15
2014 : UK COAL IMPORTS DECLINED 17%; GERMANY COAL IMPORTS UP 6%
Hard Coal Market 2014: Despite The Energy Turnaround, Hard Coal Imports To Germany Rise By More Than 6%, Although Hard Coal-Fired Power Generation ...
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- Star Paper Mills Limited - India
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Semirara Mining and Power Corporation, Philippines
- McConnell Dowell - Australia
- Bukit Baiduri Energy - Indonesia
- Interocean Group of Companies - India
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mercuria Energy - Indonesia
- Indonesian Coal Mining Association
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- PNOC Exploration Corporation - Philippines
- Globalindo Alam Lestari - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Marubeni Corporation - India
- Pipit Mutiara Jaya. PT, Indonesia
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- SMG Consultants - Indonesia
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Mjunction Services Limited - India
- PowerSource Philippines DevCo
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- ICICI Bank Limited - India
- Anglo American - United Kingdom
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- White Energy Company Limited
- Miang Besar Coal Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Indika Energy - Indonesia
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Jaiprakash Power Ventures ltd
- Xindia Steels Limited - India
- Sinarmas Energy and Mining - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karbindo Abesyapradhi - Indoneisa
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- Africa Commodities Group - South Africa
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Altura Mining Limited, Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Agrawal Coal Company - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Aditya Birla Group - India
- Eastern Coal Council - USA
- Medco Energi Mining Internasional
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Makarim & Taira - Indonesia
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Siam City Cement - Thailand
- Maharashtra Electricity Regulatory Commission - India
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Essar Steel Hazira Ltd - India
- Standard Chartered Bank - UAE
- Energy Development Corp, Philippines
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Renaissance Capital - South Africa
- Kepco SPC Power Corporation, Philippines
- Australian Coal Association
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- CIMB Investment Bank - Malaysia
- Kartika Selabumi Mining - Indonesia
- Minerals Council of Australia
- Formosa Plastics Group - Taiwan
- IEA Clean Coal Centre - UK
- Vijayanagar Sugar Pvt Ltd - India
- Ind-Barath Power Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Karaikal Port Pvt Ltd - India
- Economic Council, Georgia
- Global Business Power Corporation, Philippines
- Gujarat Sidhee Cement - India
- OPG Power Generation Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Thai Mozambique Logistica
- Orica Mining Services - Indonesia
- CNBM International Corporation - China
- Madhucon Powers Ltd - India
- Heidelberg Cement - Germany
- GMR Energy Limited - India
- Siam City Cement PLC, Thailand
- Tata Chemicals Ltd - India
- Simpson Spence & Young - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Toyota Tsusho Corporation, Japan
- Energy Link Ltd, New Zealand
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Salva Resources Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Borneo Indobara - Indonesia
- Indian Oil Corporation Limited
- Manunggal Multi Energi - Indonesia
- Oldendorff Carriers - Singapore
- VISA Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Savvy Resources Ltd - HongKong
- Wood Mackenzie - Singapore
- PetroVietnam Power Coal Import and Supply Company
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Kohat Cement Company Ltd. - Pakistan
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Meralco Power Generation, Philippines
- London Commodity Brokers - England
- Malabar Cements Ltd - India
- Global Coal Blending Company Limited - Australia
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Independent Power Producers Association of India
- IHS Mccloskey Coal Group - USA
- Bharathi Cement Corporation - India
- Sarangani Energy Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Posco Energy - South Korea
- Electricity Authority, New Zealand
- Thiess Contractors Indonesia
- The State Trading Corporation of India Ltd
- Edison Trading Spa - Italy
- Mercator Lines Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- The University of Queensland
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Parry Sugars Refinery, India
- Meenaskhi Energy Private Limited - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Wilmar Investment Holdings
- Directorate Of Revenue Intelligence - India
- Vizag Seaport Private Limited - India
- Parliament of New Zealand
- Ministry of Mines - Canada
- Planning Commission, India
- Petron Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Deloitte Consulting - India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Ceylon Electricity Board - Sri Lanka
- Sical Logistics Limited - India
- SN Aboitiz Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Rio Tinto Coal - Australia
- Indo Tambangraya Megah - Indonesia
- Bhatia International Limited - India
- South Luzon Thermal Energy Corporation
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Sojitz Corporation - Japan
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Kaltim Prima Coal - Indonesia
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