The latest World Energy Outlook has reinforced opportunities for Australia to strengthen its role as a growing, reliable and competitive supplier of high quality coal and gas to Asia, including the fast-growing Indian economy.
The World Energy Outlook 2019, released by the International Energy Agency in Paris, reports global energy demand increased by 2.3 per cent in 2018 – the largest rise since 2010 – with consumption of energy including coal and solar up on the previous year.
The Minister for Resources and Northern Australia Matt Canavan said the report highlighted the growth in demand for energy in India and developing countries in Asia, with ongoing demand for coal despite the rising use of renewable energy and a fall in coal demand from the United States and China.
“The latest World Energy Outlook underlines the important role coal plays in industrial development and as a major contributor to the global energy mix for the foreseeable future. Coal remains the largest source of electricity generated in Asia, and the lowest cost in many Asian energy markets,” Minister Canavan said.
“India is set to double its own coal production by 2040, however the increase will not be enough to meet growth in demand and India will overtake China as the world’s biggest coal importer by the mid-2020s. India still has nearly 170 million people who have no access to electricity.
“Australia is well placed to help India meet its growing demand for coal as it continues to develop and extend electricity supplies across the country. India has been identified as a hotspot for Australian thermal coal exports, with its potential demand creating up to 4,000 new jobs in regional Australia.
“In August this year, I released the Coal in India report, and visited India to promote Australia as a reliable supplier of LNG, thermal and metallurgical coal and to encourage investment in Australia’s resources sector.”
The World Energy Outlook highlights the importance of energy security and access, particularly given rapid urbanisation and rising energy demand in developing Asian and African nations.
By 2040, Australian net coal exports are forecast to have grown by 65 mtce (million tonnes of coal equivalent), or an 18 per cent increase. This reaffirms the important role Australia plays in supplying high quality resources, including coal, to our international trading partners.
On LNG, the World Energy Outlook 2019 said Australia had short-term challenges to maintain supplies for domestic consumption growth and exports. However, global natural gas demand is expected to increase by 40 per cent by 2040. Australia can play a key role in supplying this demand especially if states remove restrictions on gas development.
“The World Energy Outlook estimates that overall Australian natural gas production could double by 2040, requiring major new investment and also providing new opportunities for downstream industry and manufacturing right here in Australia.”
Mr Canavan also noted the World Energy Outlook cautioned that an increasing number of lenders were placing restrictions on coal project funding, which could see some projects struggle and therefore open up opportunities for overseas producers (like Russia) to increase their market share.
“All I ask is that our financial institutions do their job - invest in projects in Australia that generate revenue for our nation and create jobs for our people.
“I want them to focus on those projects which stack up, and those projects which can provide economic benefits not just to themselves through lending but also to our nation.”