Vietnam's demand for Aussie coal skyrockets

DEMAND for high quality Australian coal will continue to increase in Asia as coal-fired electricity continues to play a critical role fuelling inexpensive, reliable electricity generation in the region, according to Minerals Council director Greg Evans.

Lou Caruana

Evans referred to figures by Platts which show a 538.8% increase in Vietnamese demand in February 2016 compared to February 2015.

Vietnam like other South East Asian countries is embarking upon a major electrification program as it seeks to support its economic expansion, Evans said.

“Platts noted the South-East Asian nation, traditionally a coal exporter has turned to imports to meet rising domestic demand, particularly from the power sector and this includes the construction of the most modern and clean coal-fired High Efficiency Low Emission or (HELE) generation technology,” he said.

“It indicated the state-owned Vietnam Electricity, or EVN, added more than 3,400 MW of capacity from new coal-fired power plants in 2015 and these power plants consume nearly 10 mt/year of coal.”

The new figures follow forecasts issued last year by the International Energy Agency (IEA) in their World Energy Outlook (WEO) that Australia’s exports of coal will grow by 36.7% to 2040, increasing the Australian share of the global coal trade from 29% in 2013 to 33% in 2040.

Further, the IEA forecast that demand for coal in Southeast Asia specifically will grow by 4.6% per year until 2040, with the share of coal in electricity generation expected to increase from 32% to 40%.

Australia’s high quality coal reduces emissions from coal-fired power stations because less of it is required to generate the same unit of energy compared to lower-quality coals, Evans said.

“Arguing for restricting the development of Australian coal mines promotes coal from other countries whose coal is of a lower quality,” he said.

“High quality Australian coal is the nation's second largest export earner, valued at approximately $40 billion and employs over 40,000 people directly. The industry pays over $6 billion in wages each year and has contributed over $37 billion in company tax and royalty payments between 2007-08 and 2013-14.”

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