Page 8 - AsiaElec Week 28

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Australia faces sluggish Asian coal market
AUSTRALIA
AUSTRALIA will struggle to seek alternative outlets for its thermal coal as a declining Japa- nese market increasingly turns towards cheaper renewable energy solutions.
New emerging Asian buyers are not buying enough to displace declining imports from Aus- tralia’s largest customers.
Japanese coal plants that are currently being built will be o set by closures of old plants in the medium term and Japan’s coal- red power capacity will go into irreversible decline, said a recent report from the US-based Institute for Energy Economics and Financial Analysis (IEEFA).
e report found that there was considerable momentum away from coal in the Japanese mar- ket, as cheaper renewables and falling domestic electricity demand push down coal imports from Australia’s largest buyer.
“New South Wales (NSW) thermal coal exports to Japan peaked back in 2015, and the trajectory is down – not up,” said IEEFA research analyst Simon Nicholas.
“Even under a business-as-usual scenario, Japan’s coal-fired power capacity will go into decline from 2023, a ecting Australia’s exports. is trend is set to accelerate in the long term,” he warned.
Nicholas highlighted that Japan accounted for 45% of NSW coal exports in 2018, but was now declining fast.
Another key nd was that Japan’s pipeline of
new coal- red power plants had collapsed by 45% over the last four years, forcing the Austral- ian government to forecast a 1.1% annual fall in Japan’s thermal coal imports until 2024.
While major coal buyers Japan, China, South Korea and Taiwan are all set to import less coal, smaller importers such as Vietnam and the Phil- ippines will prove unable to replace the lost busi- ness, despite their growing energy needs.
Australian coal will also not be able to com- pete with cheaper supplies from Indonesia on price, with countries such as Bangladesh favour- ing lower-quality coal from Indonesia that will be freed up by China’s stalled coal imports.
Another worrying trend for Australian coal is the divestment away from coal by many banks and investors.
“Japan’s in uential trading houses are re ect- ing that growing trend by recently announcing a cessation of coal plant development and divest- ment from thermal coal mine investments, including in Australia,” Tim Buckley, director of energy nance at IEEFA, noted.
With the Asian coal market set for a period of oversupply and lower prices, any new Aus- tralian mine approvals risk being uneconomic. For example, Queensland has recently given the green light to Adani’s Carmichael mine. With a sluggish Asian market and India aiming to raise domestic production and reduce imports, pro- jects such as Carmichael could become exposed commercially.™
RENEWABLES
Indian solar tendering recovers after election hiaturus
INDIA
INDIA saw a major spike in solar tender announcements in June, with 13GW of capacity now on o er as the government boosted its pro- curement campaign a er the general election.
New tenders amounted to 13GW in June, while 1.7GW was retendered and 3GW was can- celled. ese totals compare with just 119MW in May and 799MW in April.
Meanwhile, 1.7GW of solar capacity was auc- tioned o , a similar gure to May 2019, while in April no capacity was auctioned o as the new government settled in a er the March elections.
e auctions fetched tari s of as low $0.04 per kWh.
Major projects include Solar Energy Cor- poration of India’s (SECI) tender for 6GW of interstate transmission system (ISTS) connected projects. is would also involve a 2-GW solar manufacturing component and comes with a tari ceiling of INR2.75 ($0.039) per kWh for 25 years.
SECI also issued two tenders for 2.4GW of ISTS-connected capacity on a build-own-oper- ate (BOO) basis. e projects may consist of any number of blocks, each in multiples of 10MW with a minimum capacity of each block being 20MW.
State-owned coal-fired generator NTPC
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w w w . N E W S B A S E . c o m Week 28 16 •July•2019