Market Trends of Asia-Pacific Coal Industry
This section covers the major market trends shaping the APAC Coal Market according to our research experts:
Power Stations Segment to Dominate the Market
- In 2019, Asia-Pacific accounted for more than 77% of the global share in the total coal consumption, and about 47% of primary energy consumption in the region was attributed to coal.
- Further, of the new coal-fired power plants commissioned in 2019, nearly two-thirds (64%) of the newly commissioned capacity was in China (43.8 GW) and 12% in India (8.1 GW), with the remaining 24% located mainly in Malaysia (2.6 GW), Indonesia (2.4 GW), and Pakistan (2 GW).
- Currently, about half of the capacity currently under construction is in China (99.7 GW), followed by 18% in India (37 GW), 6% in Indonesia (11.8 GW), and 5% in Japan (9.3 GW). Hence, with Asia-Pacific countries majorly increasing coal consumption globally, the market is expected to be driven during the forecast period.
- Although commissioning increased in 2019, the pipeline for new commissioning is showing signs of a slowdown. Southeast Asia which is likely to be the next center for coal plant development, construction starts there have fallen over 85%, from 12.8 GW in 2016 to 1.8 GW in 2019.
- In India, capacity in pre-construction development halved in just the past year: from 60.2 GW in 2018 to 29.3 GW in 2019, with only 2.8 GW newly proposed in 2019, less than Turkey.
- Moreover, Japan started construction on 1.8 GW of coal power in 2019 and commissioned 1.3 GW of new coal power. Japan is the only Group of Seven (G7) country adding to its domestic coal power capacity and is facing pressure from the G7 group to cut down on its coal consumption in line with Paris agreement.
- Although, there are several restrains in the Asia-Pacific leading to decreased use of coal, many countries are still continuing construction of coal power plants, led by China, India, and Indonesia, in turn, bolstering the market growth in the region.
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China to Dominate the Market
- China has witnessed high rates of demand for electricity, owing to the unprecedented growth of the economy, coupled with factors, such as rapid industrialization and urbanization electricity. The robust economic growth in China reached nearly 7%, and the gross electricity consumption grew by 6.6%, exceeding 6,000 TWh, for the first time in 2017.
- Utilities and governments in China are developing new generation projects to meet the rising electricity demand. At over 1,000 GW, China constitutes about half of all global coal power capacity, and 41% of global capacity under construction and in pre-construction development (205.9 GW).
- In China, the amount of capacity in pre-construction development has also increased as the central government began placing restrictions on new coal plant proposals and permits in 2016. The increase is due to the power industry in China continuing to advocate for a capacity target in the upcoming five-year plan that would make room for up to 200 new coal-fired generating units by 2025.
- Therefore, China's continued pursuit of new coal power is expected to drive the ongoing expansion of the global coal fleet, in turn, leading to exponential growth of the market in the Asia-Pacific region.
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