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Rising domestic demand to cap Southeast Asia’s coal exports - IEA

02 Oct 2013 17:13:58 | csd


Southeast Asia’s coal demand is set to triple by 2035, accounting for nearly 30% of global coal demand growth, according to the International Energy Agency (IEA) on Wednesday. The coal-rich region is expected to nearly double its coal production over the next 22 years, but rising domestic demand will leave 2035 exports flat with 2011.

By 2035, almost half of all electricity generation in the southeast Asian countries of Indonesia, Philippines, Singapore, Thailand, Vietnam, Cambodia, Malaysia, Myanmar, Lao PDR and Brunei Darussalam is expected to come from coal-fired generation. Because coal is the most abundant fossil fuel in the region, 75% of all generation capacity currently under construction is coal-fired.

In 2011 gas accounted for 44% of the total electricity generation and coal held a 31% share, followed by renewables at 14% and oil at 10%. However, by 2035, coal will account for 49% of total power production, gas share will fall to 28% and oil will provide just 2% of total production. Renewables will also increase their importance in the energy mix with a 20% share of total generation, IEA said.

Impact on coal exports

While southeast Asia’s overall energy use per capita is still low at just half of the global average, its economy is set to triple between 2011 and 2035. In addition, its population is expected to grow by 25% in that period, increasing overall energy demand by more than 80% – a rise equivalent to the current energy demand of Japan.

Because of this rising energy demand, both natural gas and coal exports from the region will be affected, with production focusing on supplying the rising needs of the domestic markets.

For the past eight years Indonesia has been the world’s largest exporter of thermal coal, with India and China its primary customers. However, future export levels will be influenced by policies aimed at giving preference to the domestic market. Exports from Vietnam – the region’s only other net exporter of coal – have already been declining over recent years, IEA said, as new power plants have increased domestic coal demand.

In 2011, net coal exports from the region stood at 220 million tonnes of coal equivalent (mtce). The IEA projects exports will continue to rise throughout the decade, peaking at 290mtce in 2020 before falling back to around 220mtce in 2035. Production, however, is expected to nearly double from 348mtce in 2011 to 616mtce in 2035. Manca Vitorino

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