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Interview: Deepak Kannan, Managing Editor – Asia Thermal Coal, S&P Global Platts

Deepak talks to Coaltrans about thermal coal’s role in the ASEAN energy mix, which countries are supplying to the ASEAN market, and how market transparency is changing procurement strategies.





You can hear more from Deepak at the 6th Coaltrans Emerging Asian Coal Markets in Vietnam on 7 - 8 November 2017.



Coaltrans Conferences (CC): What will 2018 hold for the ASEAN energy mix?

Deepak Kannan (DK): Thermal coal will continue to play a major role in the ASEAN energy mix for the next two or three decades at least.

In Southeast Asia, about 50 GW of coal-fired capacity is expected to come online by 2020, which would require as much as 100 million mt of imported thermal coal. Even after 2020, thermal-coal fired capacity in the region is expected to increase to above 150 GW by 2025, jumping to 260 GW by 2035.

Coal is expected to account for more than a quarter of the region’s total energy mix by 2020 and one-third by 2035, despite the push to add more renewable energy capacities. Countries such as Bangladesh, Cambodia, Malaysia, Philippines, Thailand, and Vietnam are all building a new generation of super-efficient coal-fired power plants to increase their electricity generation from thermal coal.


CC: Do we see a huge variety of coal qualities and blends being used and which countries are using what and why?

DK: Over the past few years, Indonesia was the sole supplier to these regions because of its proximity to the destinations as well as cheaper prices and easy availability.

However, as the market evolves, ASEAN countries are trying out different origin coals. Australia is one of the beneficiaries in this process. For example, as recently as 2014, Indonesia was the sole supplier to the Philippines, but now Australia is gaining ground as a supplier to this country. Another example is Thailand which imported about 22 million mt of coal in 2015, including anthracite and bituminous coal mostly shipped from Indonesia. But now, similar to the Philippines, Thailand has opened up more to coal imports from other origins, such as Russia (from Moscow’s Pacific seaboard ports) and Australia.

As the market becomes more transparent, utilities are now looking at price spreads between various regions and deciding on their procurement strategies to save costs and maximise efficiencies. Of course, freight rates also play a very important role in these countries deciding on the origin of coal they want to procure from the spot market at any given point of time.


CC: What is the current position for foreign investment in the region? Are we seeing a considerable interest in investment, who from and what are the barriers to this?

DK: Thermal coal capacity continues to be added in this region, indicating that there is a lot of optimism about growing demand for electricity as well as continued acceptance of coal as the fuel for generating power.

However, there are also lingering uncertainties about countries pushing to add more renewable capacity.


CC: We will be hearing from several of the region’s key utilities companies at the conference, is there one you are particularly looking forward to hearing from and why?

DK: I would like to hear the views from major utilities on the demand outlook for their respective regions, especially Philippines, Thailand and Vietnam.


 

This content is provided by Coaltrans Conferences for informational purposes only, and it reflects the market and industry conditions and presenter’s opinions and affiliations available at the time of the presentation.

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