According to The Australian Financial Review today, South-east Asian coal demand is set to triple in the next 25 years, bucking a global trend and giving Australia's coal exporters a sorely needed boost, a new International Energy Agency report predicts.
The report is a rare piece of good news for Australia's struggling coal producers because the growth in domestic energy demand in south-east Asia will exceed the capacity of domestic suppliers, especially Indonesia, to expand to meet it.
As a result, the International Energy Agency predicts that Australia will surpass Indonesia as the world's largest thermal coal exporter again by 2020.
Paul Flynn, chief executive of Whitehaven Coal said 70 gigawatts of new coal-fired power stations would be opened across Asia in the next five years, requiring another 150 million to 180 million tonnes of coal a year. Even if only half of that came from Australia, it didn't have the capacity.
The IEA predicts energy demand in south-east Asia will jump by 80 per cent as governments seek to extend electricity to 120 million people who don't have it and cleaner cooking and heating fuels to 276 million people who rely on polluting solid fuels such as wood or dung.
Because the region's oil production is shrinking and natural gas production is growing more slowly, the majority of the increase in demand will have to be met from the region's coal production and imports.
The IEA forecasts that south-east Asian thermal coal production will increase from its current level by about 230 million tonnes a year, while demand will increase by about 300 million tonnes.
It also highlights the need to accelerate the deployment of more efficient coal plant technologies to address the rise in local pollution and carbon dioxide emissions, with less-efficient, conventional plant still forecast to account for half of coal-fired capacity even as average efficiency increases by five percentage points.
New Resources Minister Josh Frydenberg, speaking from the Asia-Pacific Economic Co-operation energy ministers meeting in Cebu, said coal importance had been reinforced at the meeting.
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