IEEJ : March 2014 All Right Reserved

IEEJ
24 March 2014

Keisuke Sadamori,Director, Energy Markets & Security, IEA© OECD/IEA 2014

IEEJ : March 2014 All Right Reserved

World energy demand by fuelMtoe 5 000

OilCoal
4 000

Gas

3 000

2 000

Biomass
Nuclear
Other renewables
Hydro

1 000

1980

© OECD/IEA 2014

1990

2000

2010

2020

2030 2035

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Change in world energy demandby fuel & scenario, 2011-2035
Mtoe 2 000

CPSNPS

1 500

450S
1 000
500
0-500
-1 000-1 500Coal© OECD/IEA 2014

OilGasNuclearHydroBioenergy

Otherrenewables

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Coal use grows further albeit
at a slower pace than in the past
Incremental world coal demand, historical & by scenario

1987-2001
1987-2011

2001-20112011-2020

New Policies
Scenario2020-2035

Current Policies
Scenario

450 Scenario-2 000© OECD/IEA 2014

-1 000

0

1 000

2 000

3 000
Mtce

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Fossil energy resources by type

Total remaining recoverable resources
3 050 years

Proven reserves
Cumulative production to date

233 years
142 years

Coal© OECD/IEA 2014

178 years

61 years

54 years

Natural gas

OilIEEJ : March 2014 All Right Reserved

Electricity generation in non-OECD countries
has only begun to riseElectricity generation by source

OECDNon-OECD

TWh 10 000
8 000
6 000
4 000
2 000

1990

2011
Coal

© OECD/IEA 2014

2035 1990
Renewables

Gas

2011

2035

Nuclear

Oil

The engine of energy demand growth
moves to South Asia

Share of global growth
2012-2035

Primary energy demand, 2035 (Mtoe)

Eurasia

Latin
America

Europe
1 370
UnitedStates

4 060

2 240

Middle 1 050
EastBrazil
480

1 030

Africa1 540

Eurasia OECD
8%

China

1 7101 000

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Africa
440JapanSoutheastAsia

5% 4%8%Middle 10%
East65%India
Non-OECD
Asia

China is the main driver of increasing energy demand in the current decade,but India takes over in the 2020s as the principal source of growth© OECD/IEA 2014

The centre of coal trade is shifting
to developing Asia

IEEJ : March 2014 All Right Reserved

Major net importers of coal

Mtce 400

2035
Change 2020-2035

300

Change 2011-2020

2011

200
100
0-100
India

Rest of Asia

ChinaJapanEuropeanUnion

Korea

The role of key OECD coal importers declines further, while Asian importers gain
in importance, with India becoming the largest net importer early in the next decade© OECD/IEA 2014

The power sector is fundamental to the energy
outlook of Southeast Asia

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ASEAN incremental electricity generation by fuel, 2011-2035
Coal

Renewables
Gas
NuclearOil-100© OECD/IEA 2014

0100

200

300

400

500

600

700
TWh

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Emissions off track in the run-up
to the 2015 climate summit in France
Cumulative energy-related CO2 emissions

Total emissions
1900-2035

Gt 800600Non-OECD
Non-OECD
49%
OECD400200
OECD51%
1900-1929

1930
-1959

1960
-1989

1990-2012

2013
-2035

Non-OECD countries account for a rising share of emissions,although 2035 per capita levels are only half of OECD

© OECD/IEA 2014

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Coal demand knows only one direction: up
PRIMARY ENERGY FROM FOSSIL FUELS© OECD/IEA 2014

IEEJ : March 2014 All Right Reserved

BAU: China leading the (coal) world
COAL DEMAND IN CHINA AND IN THE REST OF THE WORLD© OECD/IEA 2014

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What happened in China in 2012?
COAL DEMAND GROWTH IN CHINA (y-o-y)© OECD/IEA 2014

IEEJ : March 2014 All Right ReservedOECD countries are not reducing coal use
COAL DEMAND PROJECTIONS© OECD/IEA 2014

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Growth led by Asia
COAL DEMAND TRENDS AND PROJECTIONS© OECD/IEA 2014

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But who is more coal-dependent?
COAL USE IN POWER GENERATION

Note: 2011 Data

© OECD/IEA 2014

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Displacing coal in Asia will not be that easy
COAL AND GAS PRICES. IMPLIED CO2 PRICE TO TRIGGER FUEL SWITCHING© OECD/IEA 2014

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Coal trade: growing faster, moving East

113(+16)65(+14)113(+21)489(+106)

89(+15)Global thermalseaborne trade1131 Mt (2018)(+244 Mt 2012-18)© OECD/IEA 2014

223(+63)

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Prices going down
SPOT PRICE OF THERMAL, COKING AND PCI COAL (AUSTRALIA-FOB)
USD/t
350
300

250
200
150
100500

Newcastle steam coal (FOB)
Australian low vol PCI (FOB)

Australian prime hard coking (FOB)

Evolution of fossil fuel prices© OECD/IEA 2014IEEJ : March 2014 All Right Reserved

But low coal price is not just a US story© OECD/IEA 2014

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EPA regulations shortened coal fleet© OECD/IEA 2014

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Where did unburned US coal go?

© OECD/IEA 2014

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This is the answer
The James River Coal company announced Tuesday it is closing
several mines in eastern Kentucky and laying off 525 employees.
Argus Energy has notified West Virginia labor authorities thatit will shut two underground coal mines, a preparation plant
and the Wayne County River Terminal on December 27.
Major Layoffs at Oxbow Coal Mine
America West Resources entered bankruptcy in February 2013
The vice president of Springfield Coal Company tells us nearly
190 Crown III miners have been laid off in Farmersville.
Patriot Coal entered bankruptcy protection in July 2012
More than 250 miners and employees have been let go.
The lay-offs took place at the Guyan Surface Mine and theFanco Prep Plant in Yolyn in Logan County.

© OECD/IEA 2014

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Central Appalachian and PRB felt the bit
COAL SHIPPED IN US BY BASINSMt
500Mt
204000300-20200-40100-600-80

NAPP© OECD/IEA 2014

CAPP

SAPP

EasternInteriorTexas

Powder Uinta BasinRiver Basin

2011

2012

Absolute change 2012/11 (right axis)

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Economics of coal gasification do make sense
AN ESTIMATE OF COAL-BASED SNG© OECD/IEA 2014

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Wrapping up
 Coal demand will grow at average 2.3% per year toreach almost 9 billion tonnes in 2018
 Despite some policy changes, China will lead theway, absorbing roughly 60 % of that growth OECD consumption remains flat Indonesia and Australia will lead export growth Coal conversion in China emerges as a driver ofdemand growth© OECD/IEA 2014

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Thank you
Keisuke.sadamori@iea.org
www.iea.org

To purchase the book, click:
http://www.iea.org/w/bookshop/add.aspx?id=461© OECD/IEA 2014

Contact : report@tky.ieej.or.jp