World Energy Outlook reports strong demand for Australia's resources
The World Energy Outlook (WEO) released on 10 November 2015 demonstrates the challenge the world faces to meet the demand for energy across the developing world and the crucial role Australia will play.
Demand for Australia's energy resources, particularly coal and uranium, will remain strong until 2040 as all energy sources grow to meet the challenge of prosperity for all.
With 1.2 billion people still without electricity today, Australia's energy exports will play a central to the helping lift those living in India, South-East Asia and Africa out of poverty.
Global electricity consumption will grow by more than 70 per cent with non-OECD countries making up 85 per cent of that growth to 2040, according to the IEA. Global coal demand rises by 12% between 2013 and 2040, reaching over 6 300?million tonnes of coal equivalent (Mtce). Coal-fired electricity generation will increase by 23 per cent between 2013 and 2040.
This means the world will require Australia’s high- quality coal and uranium to provide reliable and base load electricity generation.
In the IEA central scenario, Australia's export coal is forecast to grow by 36.7 per cent to 2040, boosting the Australian share of global trade from 29 per cent in 2013 to 33 per cent in 2040. This is consistent with forecasts from the Department of Industry, Innovation and Science, Australia will regain its ranking as the world's largest exporter of coal.
Nuclear power generated electricity will also increase, with global output growing by 84 per cent to 2040. This represents a substantial opportunity for Australia which hosts 30 per cent of the world’s uranium reserves.
Across the world the mix of energy sources changes over time, but Australia's energy exports remain vital to energy security. China’s coal use is expected to plateau from the mid-2030s but remain a leading coal producer and consumer throughout the period.
Demand for coal from India nearly triples over the same time period and becomes the world’s second-largest coal consumer and producer. By 2040, Asia is forecast to account four out of every five tonnes of coal consumed globally.
The WEO notes that new coal basins such as the Galilee will remain potentially attractive investments because of their low production costs and demand from India.
The report also highlights the importance of the High Efficiency, Low Emissions (HELE) coal-fired power generation, with the shift to supercritical and ultra supercritical plant. While China leads the way in development of the most advanced ultra supercritcal plants, other nations such as India will continue to develop through the deployment of supercritical plants. By 2040 improvements in efficiency reduces CO2 emissions by 1.9 Gt (the equivalent of India’s current emissions) today. This is also akin to saving the equivalent of the coal used in the European Union today for the same amount of electricity. Power station designs will increasingly incorporate carbon capture and storage potential, according to the WEO.
The WEO refutes the false claims of divestment activists that coal is at risk of becoming a so-called stranded capital.
The projection of a 37 per cent increase in demand for Australian coal underlines Australia's advantage of being a producer of high quality, high energy coal ideally suited for low emissions coal plants around the world.
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