Coal to Surpass Oil by 2020WoodMackenzie

7/26/2019 Coal to Surpass Oil by 2020WoodMackenzie

http://slidepdf.com/reader/full/coal-to-surpass-oil-by-2020woodmackenzie 1/13

www.woodmac.com

Delivering commercial insight

Coal to exceed oil by 2020

October 2013

Wood Mackenzie Energy Markets Service




www.woodmac.com

© Wood Mackenzie 2

At this week’s World Energy Congress in Daegu, South

Korea, energy leaders came together to find solutions to theso-called ‘energy trilemma’ of energy equity, energy security

and environmental sustainability.

Wood Mackenzie’s Global Markets Group presented our

global fuel demand forecasts based on country level analysis.

In key developing markets, economic growth will continue to

be driven by urbanisation and industrialisation as

governments seek to improve housing conditions and create

economic opportunities. Increased wealth will be a key

ingredient to shifting growth towards consumption.

Combined, these factors drive global electricity demand.

Coal will fuel electricity demand growth and it will overtakeglobal oil demand because unlike alternatives, it is plentiful

and affordable. Carbon emissions will be a secondary

consideration for developing markets that are focused on

economic development.

A hydrocarbon

world…




www.woodmac.com

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Coal Oil Gas Nuclear Hydro Renewables Other

C A G R ( 2 0

1 3 - 2 0 3 0 )

M t o e

2000 2010 2020 2030 CAGR (2013-2030)

Source: Wood Mackenzie Energy Markets Service

Now and in the future – it’s a hydrocarbon world

© Wood Mackenzie 3

Global Energy Demand by Fuel (Mtoe)

Coal overtakes oi l as

world’s most

consumed fuel in 2019

Renewables wil l grow rapidly, but

will be small in absolute terms

Europe, the US, and Asia wil l have

the largest renewable capacity

additions




www.woodmac.com

Asia is the focus for global energy demand growth

© Wood Mackenzie 4

2,5792,579

2,8602,860

563563

758758

459459

678678

671671

1,0551,055

980980

1,1881,1881,9321,932

2,0422,042

1,7241,724

2,3022,302

685685

1,2781,278

2,8142,814

5,1535,153

South America

Russia & Caspian

Other Asia Pacific

Middle East

Europe

Africa

North America

India

China

Global Energy Demand by Region (Mtoe)

2012 Energy Demand2012 Energy Demand 2030 Energy Demand2030 Energy Demand2012 Energy Demand 2030 Energy Demand




www.woodmac.com

Developing markets continue to drive oil demand – mainly in the transport

sector but gains are offset by less consumption in mature markets

© Wood Mackenzie 5

-

1,000

2,000

3,000

4,000

5,000

6,000

2000 2005 2010 2015 2020 2025 2030

M

t o e

Non-OECD Other

OECD Other

Non-OECD Transport

OECD Transport


Oil Demand – OECD vs Non-OECD (Mtoe)

Transport demanddeclines in developed

markets in North

America and Europe.

Outside the OECD,

China and India drive

transport sector gains

Petrochemicals,

fertilisers, and

infrastructure

developments will

increase oil demand

outside of the transportsector




www.woodmac.com

Coal needs are dominated by the power sector – underpinned by rapid

electricity demand growth in China and India

© Wood Mackenzie 6

China & India Electricity Output Rest of World Electricity Output (ex China & India)

-

5,000

10,000

15,000

20,000

25,000

2000 2005 2010 2015 2020 2025 2030

T W h

Other

Renewables

Hydro

Nuclear

Gas

Oil

Coal


-

5,000

10,000

15,000

20,000

25,000

2000 2005 2010 2015 2020 2025 2030

T W h

Other

Renewables

Hydro

Nuclear

Gas

Oil

Coal





www.woodmac.com

Coal-fired power persists in mature markets and expands in others

South East Asia

• Traditional low cost domestic gas supplies

unable to keep pace with power needs.

Coal becomes the dominant fuel intopower by 2020

North East Asia

• High fuel import costs, security of supply

and nuclear issues support coal

Europe

• Struggling economy and low coal prices

render EU ETS ineffective – carbon price

unlikely to rise sufficiently before 2020

North America• Despite plentiful low cost natural gas, coal

remains competitive in many locations

© Wood Mackenzie 7

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2000 2005 2010 2015 2020 2025 2030

T W h

Other

South East AsiaNorth East Asia

Europe

North America


ROW Coal-fired Electric ity Output (ex China & India)




www.woodmac.com

Coal’s use in industry is significant – especially in markets with high levels of

construction activity

© Wood Mackenzie 8

Global Non-power Coal Demand vs. Coal into Power (Mtoe)

-

500

1,000

1,500

2,000

2,500

3,000

3,500

2000 2005 2010 2015 2020 2025 2030

M t o

e

ROW

India

China

Global Coal in to Power


Non-power demand forcoal is dominated by

industry. The most

dominant uses are for

steel and cement

production but growth in

these sectors will s low.

However, there is ongoing

expansion in coal

conversion projects

Global non-power

demand for coal




www.woodmac.com

Abundance, accessibility and affordability are the underlying principles

driving coal’s growth

© Wood Mackenzie 9

China and India Hydrocarbon Product ion and Imports (Mtoe)

There is limited

availability of domestic

gas resources, and

imported gas are two to

three times more costly

than imported coal.

Even with aggressive

targets for nuclear,

hydro and renewables,

coal is necessary to

meet projected

electricity demand

-

1,000

2,000

3,000

4,000

5,000

6,000

M t o e

Gas Imports

Gas Production

Oil Imports

Oil Production

Coal Imports

Coal Production





www.woodmac.com

Conclusions

© Wood Mackenzie 10

Coal will fuel developing markets growth because it is plentiful and

affordable. These factors wil l also sustain coal in the elsewhere

The primary focus of emerging market governments wil l be increasing

living standards and access to affordable energy

These markets wil l priori tise local environmental issues rather than

adopting higher cost fuels and technologies tomeet global to emissions targets




www.woodmac.com

Contacts


Murray Douglas

Manager, Energy Markets Research

T: +44 131 243 4349

E: [email protected]

James Brick

Senior Analyst, Energy Markets Research

T: +1 713 470 1842


William Durbin

President, Global Markets

T: +86 10 5965 2635

E: will [email protected]

David Brown

Analyst, Energy Markets Research

T: +44 131 243 4493





www.woodmac.com

Wood Mackenzie Disclaimer

Strict ly Private & Confidential

This report has been prepared by Wood Mackenzie Limited. The report is intended solely for

the benefit of i ts clients and the contents and conclusions are confidential and may not bedisclosed to any other persons or companies without Wood Mackenzie’s prior writ ten

permission.

The information upon which this report is based has either been supplied to usor comes from our own experience, knowledge and databases. The opinions expressed in

this report are those of Wood Mackenzie. They have been arrived at following careful

consideration and enquiry but we do not guarantee their fairness, completeness or accuracy.

The opinions, as of this date, are subject to change. We do not accept any liability for your

reliance upon them.





www.woodmac.com

Global Offices

Australia

Brazil

Canada

China

India

Global Contact Details

Europe +44 (0)131 243 4400

Americas +1 713 470 1600

Asia Pacific +65 6518 0800

Email [email protected]

Website www.woodmac.com

Indonesia

Japan

Malaysia

Russia

Singapore

South Korea

United Arab Emirates

United Kingdom

United States

Wood Mackenzie is the most comprehensive source of knowledge about the world’s energy and metals industries.

We analyse and advise on every stage along the value chain - from discovery to delivery, and beyond - to provide

clients with the commercial insight that makes them stronger. For more information visit: www.woodmac.com


Documents

Coal to Surpass Oil by 2020WoodMackenzie