ROLE OF COAL IN SOUTHEAST ASIA S ENERGY MIX AND INDONESIA S & AUSTRALIA S ROLE IN GLOBAL COAL MARKETS

Transcription

1 ROLE OF COAL IN SOUTHEAST ASIA S ENERGY MIX AND INDONESIA S & AUSTRALIA S ROLE IN GLOBAL COAL MARKETS HEAD OF R & D AGENCY FOR ENERGY AND MINERAL RESOURCES AGENCY OF RESEARCH AND DEVELOPMENT FOR ENERGY AND MINERAL RESOURCES MINISTRY OF ENERGY AND MINERAL RESOURCES Colombo-Srilanka, February 2014

2 LIST OF CONTENTS I. Introduction II. The R0le of Coal in Southeast Asia s Energy Mix III. Indonesian Energy Outlook IV. Indonesia s Role in Global Coal Markets V. Australia s Role in Global Coal Markets VI. C0ncluding Remarks

3 I. INTRODUCTION

4 INTRODUCTION Coal is playing an important role in the industrialization of developing countries since it is abundant, cost competitive and available in many parts of the world. Coal is the second source of primary energy in Asia, the world in general after oil, and the first source of electricity generation. After coal s long history in the energy mix, coal remains the largest contributor to electricity generation, currently provides 40% of the world s electricity needs. Since the beginning of the 21 st century, coal has been the fastest-growing global energy source. Coal use has never stopped increasing and the forecasts indicate that, unless a dramatic policy action occurs, this trend will continue in the future. Due to high CO 2 emissions from coal-fired power plants have reduced its use in certain regions, including Europe and the United States. Modern coal plants (super critical and ultra-super critical) are more efficient than older plants, and thus use less coal and produce fewer CO 2 emissions per unit of power. However, CCS is the most promising technology to reach near-zero CO 2 emissions from large CO 2 sources.

5 Source : World Energy Council, 2013

6 COAL RESERVES, PRODUCTION AND EXPORT World s Coal Producer and Exporter, Indonesia Coal Reserves is only 1.7% of World Coal Reserves The 5 th Coal Producer The 2 nd Coal Exporter

7 II. THE ROLE OF COAL IN SOUTHEAST ASIA S ENERGY MIX

8 SOUTHEAST ASIA ENERGY OVERVIEW

9 SOUTHEAST ASIA PRIMARY ENERGY MIX, 2007 & 2030 Under BAU Scenario, primary energy consumption increased from 511 MTOE in 2007 to 1,414 MTOE in Coal have the share of 29.3% in 2030, increasing from 14.8% in Natural gas share decreases from 21.4% in 2007 to 16% in Oil share in primary energy mix decreases from 36.2% in 2007 to 35.1% in Geothermal energy increases its share from 2.9% to 3.4% in Hydro will also grow, however its share will only 2.1% in 2030.

10 GROWTH IN SOUTHEAST ASIA PRIMARY ENERGY DEMAND

11 ELECTRICITY GENERATION BY FUEL IN SOUTHEAST ASIA,

12 ELECTRICITY GENERATION FROM RENEWABLES IN SOUTHEAST ASIA,

13 Source: World Coal Association, 2013 Coal ranks lowest subsidised fuels when compared to other fossil fuels

14 III. INDONESIA ENERGY OUTLOOK

15 NATIONAL ENERGY MIX PLANNING (%) Oil 2010 Coal 2025 Oil 49,7 Gas 20,1 Coal 24,5 % Gas New Energy 40 Oil 25 Gas 20 Coal 30 New Energy 25 EBT 5, Oil 19,4 Gas 18,8 Coal 31 New Energy 30, Note: New Energy: (water, geothermal, biomass waste, plants energy, solar, wind, nuclear) Oil 20 Gas 15 Coal 25 New Energy

16 RESOURCES AND ENERGY POTENTIAL Low New and Renewable Energy are Limited Fossil Energy NO TYPES RESOURCES (R) INSTALLED CAPACITY (IC) RATIO IC/R 1 Hydro 75,670 MW 6, MW 8.79 % 2 Geothermal 29,038 MW 1,226 MW 4.22 % 3 Mini/Micro-Hydro MW MW % 4 Biomass 49,810 MW 1, MW 3.25 % 5 Solar 4.80 kwh/m 2 /day MW - 6 Wind 3 6 m/s 1.87 MW - NO FOSSIL ENERGY RECOURCES (REC) RESERVES (RES) RATIO REC/RES (%) PRODUCTION ((PROD) RATIO RES/PROD (YEAR)* ) 1 Oil (billion barrel) ** ) Gas (TSCF) Coal (billion ton) *** ) CBM (TSCF) Shale Gas (TSCF) *) assumption: no new reserves are discovered **) including Cepu Block; ***) including 41 billion tons of resources for underground mining

17 PROJECTION OF PRIMARY ENERGY SUPPLY

18 PROJECTION OF TOTAL FINAL ENERGY DEMAND BY FUEL TYPE

19 ESTIMATION OF ENERGY CONSUMPTION AND PRODUCTION IN INDONESIA,

20 SOME OF THE CURRENT ENERGY ISSUES The Government in Presidential Regulation no. 5 of 2006 has set energy mix by 2025 to reduce dependence on oil by developing alternative energy resources, such as renewable energy, new energy and other fossil fuels. Production of oil and gas continues to decline but the need continues to grow, difficulty to renegotiate oil and gas contracts, and restriction on coal export. The use of new and renewable energy is relatively small, the lack of interest of investors and high investment cost.

21 IV. INDONESIA S ROLE IN GLOBAL COAL MARKETS

22 COAL POTENCY Coal Reserves Based on Calorific Value Billion Tons TOTAL RESOURCES Billion Tons* Low TOTAL RESERVES Billion Tons Medium High Very High *) Including 41 Billion Tons Underground Coal Resources Resource : Geological Agency, 2012

23 COAL PRODUCTION AND SALES ( ) Million Tons Produksi Production Ekspor Export Domestik Domestic DMO Coal DMO Batubara * 2013** Note : *) realization 2012 **) plan 2013 ***) DMO since * 2013** Production 240 (100%) 254 (100%) 275(100%) 353(100%) 386(100%) 391(100%) Export 187 (77.9%) 198(78%) 208(75.6%) 273(77.3%) 304(78.8%) 306(78.3%) Domestic 53 (22.1%) 56(22%) 67(24.4%) 80(22.7) 82(21.2%) 85(21.7%) DMO 0 (0%) 0(0%)64,9(23.6%) 66,3(18.8%) 67,3(17.4%) 74,3(19.0%) 1. The procentage of domestic demand of coal is still lower (25%) and export always higher (75%), in term of quality low ranks coal from Indonesia can t fulfill a domestic demand. 2. The coal in Indonesia still functions as commodity not as a sources of energy like in many country. The target of Non Tax Government Revenue in 2013 is Trillion Rupiah, it is contributed from coal (86%) and from Mineral (14%). 3. The level of production has related to the target of non tax revenue because it has already approved in National Budget Plan by Parliament. 4. Huge of permit was given by local authority and the implementations of good mining practices is still less (especially from IUP) 5. The lack of Infrastructures, particularly in developing low rank coal reserve in remote Sumatera

24 INDONESIA AMONG WORLD S COAL RESERVES AND COAL EXPORTERS

25 INDONESIA COAL EXPORT BY DESTINATION ASEAN Countries (ASEAN, Hong Kong, Pakistan, Sri Lanka) CAMBODIA MALAYSIA PHILIPPINES SINGAPORE THAILAND VIETNAM

26 PREDICTION OF WORLD S THERMAL COAL EXPORT

27 INDONESIA S COAL RAPID EXPORT GROWTH HAS BEEN DRIVEN BY A NUMBER OF FACTORS, INCLUDING: Proximity to significant demand centres of China and India, whose requirement for coal (including lower CV coal which Indonesia specialises in) is growing rapidly. Low capital cost requirements in comparison to other producing jurisdictions, with high utilization of the Kalimantan river network and offshore transhipment. Lower operating costs than competitors. Relatively quick mine approval processes.

28 IV. AUSTRALIA S ROLE IN GLOBAL COAL MARKET

29 DISTRIBUTION OF COAL RESOURCES IN AUSTRALIA Source: Geoscience Australia for map of mines

30 AUSTRALIAN COALS Two forms of coal are mined in Australia, depending on the region: high-quality bituminous (black coal) and lower-quality lignite (brown coal). Bituminous coal is mined in Queensland and New South Wales, and is used for both domestic power generation and for export overseas. Lignite is mined in Victoria and South Australia, and is used power station and briquette technology

31 COAL PRODUCTION AND EXPORT Australia is the fourth largest producer of coal (440 million tons), after China, The United States and India. Australia is the largest exporter of coal (309 million tons). Top five destinations for coal from Australia: Japan, China, South Korea, India and Taiwan accounted for approx. 80% of total export. Teh remaining exported to 28 countries. Demand for coal in China and India increases dramatically in the last five years.

32 V. CONCLUDING REMARKS

33 CONCLUDING REMARKS Asia or Southeast Asia in specific along with China and India become larger energy consumers and growing participants in global energy markets. Coal is set to remain the dominant fuel in the region. Energy demand has expanded since 1990, its rate of growth among the fastest in the world. Asia or Southeast Asia in specific will see a reduction in the surplus of natural gas and coal for export, as production is increasingly diverted to domestic markets oil demand rises. Coal is emerging as the fuel of choice in the power sector because of its relative abundance and affordability in the region. Indonesia and Australia are continuing to dominate global thermal coal supply growth. Despite 2013 s low coal prices, Indonesia has increased its total exports by 10.5% on the back of strong Chinese and especially Indian and other Asian demand.

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