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SINGAPORE: The growing urban electricity needs of China are likely to fuel strong demand for coal in the region, even though industrial use may moderate.
Commodities research group Wood Mackenzie says with no global agreement to control carbon emissions, coal may remain a fuel of choice for the region.
Gas demand is also likely to double by 2025 as the fuel is increasingly used for transport in places like India.
China's urban population is growing fast, boosting demand for power.
And Wood Mackenzie says even as China's industrial output cools, resulting in lower demand for coking coal as an industrial fuel, thermal coal will continue to needed to generate electricity.
And this demand may be supported by the lack of a global consensus on carbon emissions for now.
Julie Beatty, principal economist, Wood Mackenzie, says: "When we consider what the length and breadth of the global recovery, particularly when we look at OECD countries including Japan, it seems to me that the teeth and appetite for carbon legislation has now been pushed back to something around 2017, 2018.
"So if we take that into account, I think that's going to bode quite well, not just for coal, but it's also going to be extremely good for renewables, including nuclear."
The International Energy Agency said last month that China is likely to overtake Japan as the world's largest importer of thermal coal by the end of the year.
From figures available, natural gas demand is also likely to double in Asia by 2025, with China's consumption almost tripling to 300 billion cubic metres in 2020, as growing global oversupply makes it an attractive alternative to oil.
Julie Beatty, principal economist, Wood Mackenzie, says: "There's going to be a tremendous amount of growth, in terms of CNG and other optionalities in transport systems for gas, like public transport systems in India and China, and I think that is going to give rise to non-power growth."
While economies like China and India had announced major plans to add nuclear power to their grids, Wood Mackenzie says that there are difficulties in getting components for these nuclear power plants, at least for the next few years, adding to the bright future in coal and gas for the region.
- CNA/jm
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