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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, 05 March 15
BUKIT ASAM BOOKED US$ 1 BILLION REVENUE IN 2014
COALspot.com: Indonesian publicly listed and state owned coal miner PT. Bukit Asam, has announced that, the revenue of the company for the period J ...
Wednesday, 04 March 15
AN AGENDA FOR CHANGE - FITCH INDONESIA CONFERENCE
Fitch Indonesia Conference - 5 March 2015
Fitch Ratings will host its annual Indonesia conference on 5 March 2015.
The theme of this year ...
Wednesday, 04 March 15
KEEP CALM AND INVEST IN DRY - THEODORE NTALAKOS
Keep Calm and Carry On was originally a motivational poster, intended to raise the morale of the British public, produced by the British government ...
Tuesday, 03 March 15
INDONESIAN COAL EXPORT VOLUME TO DECLINE 50% BY 2019
COALspot.com: The Indonesian government is planning to reduce coal export volume by 50% within the next five years while keeping its coal productio ...
Tuesday, 03 March 15
INDIAN THERMAL COAL IMPORTS: STEAMING FORWARD - CLARKSONS
Coal-fired power stations comprise around 60% of India’s power output, and with domestic supply issues and favourable international coal pric ...
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- Parliament of New Zealand
- Semirara Mining and Power Corporation, Philippines
- Parry Sugars Refinery, India
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- GVK Power & Infra Limited - India
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Australian Coal Association
- Independent Power Producers Association of India
- Baramulti Group, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Semirara Mining Corp, Philippines
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Heidelberg Cement - Germany
- Karaikal Port Pvt Ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indo Tambangraya Megah - Indonesia
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Meralco Power Generation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- The Treasury - Australian Government
- Attock Cement Pakistan Limited
- Renaissance Capital - South Africa
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Borneo Indobara - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Merrill Lynch Commodities Europe
- India Bulls Power Limited - India
- Billiton Holdings Pty Ltd - Australia
- New Zealand Coal & Carbon
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Economic Council, Georgia
- CNBM International Corporation - China
- AsiaOL BioFuels Corp., Philippines
- SMG Consultants - Indonesia
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- PTC India Limited - India
- Holcim Trading Pte Ltd - Singapore
- Cigading International Bulk Terminal - Indonesia
- Oldendorff Carriers - Singapore
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Altura Mining Limited, Indonesia
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- Gujarat Sidhee Cement - India
- Bangladesh Power Developement Board
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Aditya Birla Group - India
- Interocean Group of Companies - India
- Kumho Petrochemical, South Korea
- Singapore Mercantile Exchange
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Romanian Commodities Exchange
- Orica Mining Services - Indonesia
- Makarim & Taira - Indonesia
- Ministry of Transport, Egypt
- Tata Chemicals Ltd - India
- Vizag Seaport Private Limited - India
- Sarangani Energy Corporation, Philippines
- Commonwealth Bank - Australia
- International Coal Ventures Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Mjunction Services Limited - India
- Iligan Light & Power Inc, Philippines
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Marubeni Corporation - India
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Lanco Infratech Ltd - India
- Indonesian Coal Mining Association
- Timah Investasi Mineral - Indoneisa
- Ceylon Electricity Board - Sri Lanka
- Leighton Contractors Pty Ltd - Australia
- Directorate Of Revenue Intelligence - India
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Sakthi Sugars Limited - India
- Kobexindo Tractors - Indoneisa
- Intertek Mineral Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Eastern Coal Council - USA
- Wood Mackenzie - Singapore
- Petron Corporation, Philippines
- PowerSource Philippines DevCo
- Samtan Co., Ltd - South Korea
- TeaM Sual Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Kartika Selabumi Mining - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Salva Resources Pvt Ltd - India
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Kapuas Tunggal Persada - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Essar Steel Hazira Ltd - India
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Kaltim Prima Coal - Indonesia
- Minerals Council of Australia
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- LBH Netherlands Bv - Netherlands
- San Jose City I Power Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Thai Mozambique Logistica
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Planning Commission, India
- Videocon Industries ltd - India
- Formosa Plastics Group - Taiwan
- Energy Development Corp, Philippines
- Jindal Steel & Power Ltd - India
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Edison Trading Spa - Italy
- European Bulk Services B.V. - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement PLC, Thailand
- Central Java Power - Indonesia
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- ASAPP Information Group - India
- Riau Bara Harum - Indonesia
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Therma Luzon, Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- The University of Queensland
- Karbindo Abesyapradhi - Indoneisa
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Mercuria Energy - Indonesia
- Indika Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ICICI Bank Limited - India
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Georgia Ports Authority, United States
- Sindya Power Generating Company Private Ltd
- Anglo American - United Kingdom
- PetroVietnam Power Coal Import and Supply Company
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- McConnell Dowell - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Barasentosa Lestari - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mintek Dendrill Indonesia
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Cement Manufacturers Association - India
- Indogreen Group - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
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