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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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- Sinarmas Energy and Mining - Indonesia
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Intertek Mineral Services - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Petron Corporation, Philippines
- Altura Mining Limited, Indonesia
- Videocon Industries ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Gujarat Mineral Development Corp Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Cigading International Bulk Terminal - Indonesia
- PTC India Limited - India
- Orica Mining Services - Indonesia
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Planning Commission, India
- AsiaOL BioFuels Corp., Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- GMR Energy Limited - India
- ASAPP Information Group - India
- Kalimantan Lumbung Energi - Indonesia
- Mercator Lines Limited - India
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Antam Resourcindo - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Energy Link Ltd, New Zealand
- VISA Power Limited - India
- India Bulls Power Limited - India
- MS Steel International - UAE
- Semirara Mining Corp, Philippines
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Africa Commodities Group - South Africa
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Baramulti Group, Indonesia
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Essar Steel Hazira Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Semirara Mining and Power Corporation, Philippines
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Carbofer General Trading SA - India
- Maharashtra Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- London Commodity Brokers - England
- CIMB Investment Bank - Malaysia
- Makarim & Taira - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Sakthi Sugars Limited - India
- Minerals Council of Australia
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Chamber of Mines of South Africa
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Indo Tambangraya Megah - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Binh Thuan Hamico - Vietnam
- Central Electricity Authority - India
- Sojitz Corporation - Japan
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Tamil Nadu electricity Board
- Price Waterhouse Coopers - Russia
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Wilmar Investment Holdings
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Ministry of Finance - Indonesia
- Attock Cement Pakistan Limited
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Central Java Power - Indonesia
- Meenaskhi Energy Private Limited - India
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- South Luzon Thermal Energy Corporation
- Karaikal Port Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Gujarat Sidhee Cement - India
- TNB Fuel Sdn Bhd - Malaysia
- Bharathi Cement Corporation - India
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- European Bulk Services B.V. - Netherlands
- Bayan Resources Tbk. - Indonesia
- Bukit Makmur.PT - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Anglo American - United Kingdom
- Bhushan Steel Limited - India
- Georgia Ports Authority, United States
- Kaltim Prima Coal - Indonesia
- Power Finance Corporation Ltd., India
- Electricity Authority, New Zealand
- GAC Shipping (India) Pvt Ltd
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- PNOC Exploration Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Savvy Resources Ltd - HongKong
- Vedanta Resources Plc - India
- Romanian Commodities Exchange
- Australian Commodity Traders Exchange
- LBH Netherlands Bv - Netherlands
- Cement Manufacturers Association - India
- Kartika Selabumi Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Aditya Birla Group - India
- Larsen & Toubro Limited - India
- Bukit Baiduri Energy - Indonesia
- Banpu Public Company Limited - Thailand
- Thai Mozambique Logistica
- Jorong Barutama Greston.PT - Indonesia
- Economic Council, Georgia
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- Holcim Trading Pte Ltd - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Star Paper Mills Limited - India
- Sree Jayajothi Cements Limited - India
- Marubeni Corporation - India
- Indian Energy Exchange, India
- Posco Energy - South Korea
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Renaissance Capital - South Africa
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Eastern Coal Council - USA
- Xindia Steels Limited - India
- Borneo Indobara - Indonesia
- Parliament of New Zealand
- Ambuja Cements Ltd - India
- Kumho Petrochemical, South Korea
- Wood Mackenzie - Singapore
- Global Business Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Malabar Cements Ltd - India
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Eastern Energy - Thailand
- Bhoruka Overseas - Indonesia
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bahari Cakrawala Sebuku - Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- The Treasury - Australian Government
- McConnell Dowell - Australia
- Chettinad Cement Corporation Ltd - India
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