Australian gas is growing in popularity, but coal is also still in hot demand
The World Energy Outlook 2019 has found that global consumption of coal and gas has increased in the last year and will continue to over the next decade.
The International Energy Agency’s annual report, released overnight, reported that gas had a “remarkable year”, with consumption rising 4.6 per cent.
In a conservative estimate, assuming sustainable development, it could rise an average of 0.9 per cent annually over the 2020s. But under a scenario taking into account stated policies, shale gas could grow at 4 per cent annually.
From the late 2020s, the IEA predicted LNG would overtake pipeline gas. But uncertainty remained as to the scale and durability of demand for LNG imports.
As for coal, it rose for the second straight year but was below its 2014 peak. Demand was flat under a scenario accounting for stated policies, while a sustainable scenario showed that demand would plummet.
Either way, Asia would be pivotal because of the large industry and young average age of the coal-fired fleet.
But even if coal drops overall, developing economies will still likely rely on coal to satisfy electricity demand.
Federal Resources Minister Matt Canavan said India was one such nation. He said the country will double its own coal production by 2040, but this would not meet energy demand.
“India still has nearly 170 million people who have no access to electricity,” he said.
“Australia is well placed to help India meet its growing demand for coal as it continues to develop and extend electricity supplies across the country.
“India has been identified as a hotspot for Australian thermal coal exports, with its potential demand creating up to 4,000 new jobs in regional Australia.”
Canavan also condemned lenders that were restricting coal project funding. He argued this would see projects struggle and lose ground to overseas producers such as Russia that had funding.
“All I ask is that our financial institutions do their job — invest in projects in Australia that generate revenue for our nation and create jobs for our people,” he said.
“I want them to focus on those projects which stack up, and those projects which can provide economic benefits not just to themselves through lending but also to our nation.”