Asian energy consumption

Asian coal consumption

For most of Asia, its energy consumption is mostly reliant on coal. Despite major powers like China attempting to make a shift to renewable power such as solar and wind, the economy and therefore the country is still dependant on coal. It is the same all over the continent, and solid growth all over the board has seen Asian energy consumption rise and rise.

Despite slowing from 2008 to 2009 with growth of only seven percent, the East Asian economy is expected to grow by 8.7 percent this year. As a result, Asian coal markets are seeing massive business with 60-70 million tonnes of coal expected to be imported by China and India to replenish low stocks and to power their ever-growing industrial sector.

Companies such as India's NTPC (formerly National Thermal Power Co.), the state-run Coal India Ltd (CIL) and Tata Power have all been trying to secure coal supplies for their clients and as such coal producers have been seeking joint ventures or co-operating so as to efficiently develop resources.

Recent partnerships include BHP Bilton and Adaro Energy, who are to to develop the Maruwai resource in Indonesia and Churchill Mining who, with Indonesian partners, are developing the 2.48 billion tonne East Kutai resource.

It would appear that Indonesia is of interest to many Asia countries, with China Investment Corp allegedly putting aside US$1.9 billion to fund the acquisition of mines in partnership with Indonesia's Bumi Resources.

Mongolia and Australia have also been picked for their resources. Mongolia in particular has one of the world's largest undeveloped coal deposits, with coal horizons said to be 300 metres thick. This equates to 30 million tonnes per annum being mined for the next 30 years. This deposit, known as Tavan Tolgoi, has been eyed by the Chinese, who have put forward $2 billion for a 49 percent stake, but the Mongolian prime minister has been pushing to keep the resource to develop his country.

Fast economies, fast markets

With China and India's economies growing at such a rate and with China now the fastest growing coal market in the world, consumption has also risen. The World Bank has even stated that China's primary energy consumption has risen by 10 percent between 2000 and 2005; a massive amount. If that continues, China's consumption will grow to the equivalent of 87 percent of today's world consumption within 20 years.

For the continent as a whole, the Asian Pacific region consumes 33 percent of the world's energy, utilising 60 percent of coal. As such, Asian coal imports are expensive and supplies are dropping, hence the push for renewable energy investment.

With Asian energy consumption so high, the continent has managed to emerge from the global recession relatively strong with growth occurring where other countries had fallen. However, the World Bank has stated that, for many countries, their energy priorities must change, with investment put in to allow more growth in the region's service sectors and private consumption, and moving away from investment-heavy export led growth.

The bank also identified increases in domestic demand and rising exports as indicators of a rebound in industrial production across the region. Unsurprisingly, China was in the lead, with production up 16 percent in Q4 2009 - on average, more than twice as fast as the rest of East Asia - but it seems the country is aware that they are on course to 'peak' in terms of energy consumption, and out of all the countries on the continent, it is the only one actively researching and investing in alternative energy.

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Timon Singh

Timon Singh is a graduate of Liverpool University where he received a degree in Social and Economic History. He has previously worked for BBC Magazines on BBC Who Do You Think You Are? Magazine, the publication for the popular genealogy show.

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