Page 8 - AsiaElec Week 02

AsiaElec SUPPLY AND DEMAND AsiaElec
Indian power demand growth slows
INDIA
INDIA’S annual power demand growth fell to 1.1% in 2019, its slowest growth since 2013, gov- ernment data showed, reflecting a broader eco- nomic slowdown.
December year-on-year demand in fact fell 0.1%, although this was a slight bounce from the November fall of 4.3%, as sales figures across the economy declined and job losses were reported at some factories, Reuters reported.
Figures from the Central Electricity Author- ity noted a number of regional variations, with the industrialised states of Maharashtra and Gujarat showing rises in monthly demand in December.
The figures continue a trend that became most noticeable in October, when monthly demand was 13.2% below October 2018 levels.
Power demand figures are seen as an accurate reflection of industrial output and the wider state of the economy.
The country’s economic growth slowed to 4.5% in the quarter from the July-September quarter, according to government data, its low- est rate since 2013. The government pinpointed weak consumer demand and falling private investment for the decline in growth.
For the power sector, especially debt-ridden power generators and distributors, stuttering demand is a major financial blow.
Generators say they are owed $11bn in unpaid bills by distributors, which in turn face trouble collecting bills and are unable to raise
government-fixed low tariffs.
Decelerating demand growth comes as the
government is continually looking for new ways to meet growing demand, especially in the coal sector, where many power plants are operat- ing below capacity because of insufficient coal supplies.
Coal accounts for 54% of the country’s gen- erating capacity of 365,981 MW, according to Central Electricity Authority figures.
Meanwhile, the government said earlier this week that it aimed to replace 135mn tonnes of coal imports with domestic production in a bid to improve energy security and to reduce the price of fuel.
The government has also for the first time allowed for investment (FDI) in the country’s coal blocks.
Indian Coal Minister Pralhad Joshi said the changes were the result of a “historic decision” that would “ramp up coal production and dras- tically reduce the coal imports over time.”
India currently imports 235mn tonnes, and Joshi said only 100mn was “non-substitutable”.
The government state-owned Coal India Limited (CIL) is set to produce 1bn tonnes of coal by 2023-24, although output in 2018-19 was just 606.89mn tonnes, a 7% annual rise.
Few expect CIL to meet the 1bn tonne target, meaning that the government needs to auctions off private blocks, and efforts to reduce imports are unlikely to bear fruit.™
Asian LNG demand forecast to recover sooner than expected
ASIA
TRENDS in the global LNG market over the past year have led to concerns over a glut of LNG as new supply came online while demand growth stagnated.
However, analysts from at least one research and brokerage firm, Bernstein Research, are forecasting that the glut will end earlier than widely expected. They attribute this to an antic- ipated resurgence in Asian demand, as well as construction being wrapped up on the current wave of LNG projects. However, the analysts predict another period of oversupply will follow.
The Bernstein analysts, led by Neil Bever- idge, described Asian LNG demand growth of 2.1% in 2019 as “surprisingly weak”. However, this pattern has not been consistent throughout the whole year and there have been fluctuations.
Indeed, Reuters reported this week that Chi- nese LNG import volumes hit a record high in December, according to ship-tracking data from the news service’s Refinitiv Eikon platform. This made China the world’s top LNG importer, ahead of Japan, for the second consecutive month.
The country is reported to have imported 7.198mn tonnes of LNG in December, up nearly 16% on November, while Japan imported 6.574mn tonnes last month, up nearly 7% month on month. Both countries have yet to release their official monthly data. But Reuters noted that analysts do not expect the reversal between China and Japan to last beyond this winter. Meanwhile, traders cited by the news service attributed the rise in Chinese imports to the
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w w w. N E W S B A S E . c o m Week 02 15 •January•2020