The data shows that as Europe grapples with power shortages, Asia-Pacific’s power supply remains secure, largely because the region is still coal-intensive.
With regional liquefied natural gas supplies diverted to Europe, generators in Asia not only have less access to LNG, but also have to refuse to buy more expensive LNG due to strong demand. strong in Europe.
Europe is grappling with gas shortages as Russia cuts supplies, plunging many countries into an energy crisis before winter. UK National Grid has warned about the possibility of a power cut.
On Tuesday, EU avoids proposed price cap on Russian gas as it introduces new measures to tackle high energy prices. Russia earlier said it would stop supplying fuel to the EU if the bloc imposes these limits, this will reduce Russian sales and commodity prices.
S&P Global’s head of energy strategy, Atul Aryal, said that while the crisis in Europe and the war in Ukraine have forced up global prices of fuels such as oil and gas, it has not affected Asia’s energy production.
According to the latest gas report from the International Energy Agency, in the first eight months of the year, Asia’s imports of spot or short-term LNG fell 28% year-on-year. Overall LNG imports fell 7% year-on-year.
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“In Asia, instead of using gas, countries are using coal because there is coal, domestic coal and it is less expensive,” Arya told CNBC.
“The downside is that Asia, where gas consumption is increasing, has stopped, at least for now.”
Unlike Europe which depends on gas to generate energy, gas is less relevant to Asia. The country accounts for only 11% of total electricity imports, and imported LNG accounts for a small part of which most gas combustion comes from domestic production.
Whitworth added: “Coal makes up a larger share of the mix, although it is decreasing. Coal’s share in power generation for Asia-Pacific markets is more than 60%, he said.
Renewable energy deployments take time and won’t alleviate security concerns in the short term…so we could see more impetus to boost supplies of fossil fuels fossil fuels and thus reliance on these dirtier fuels.
Warren Patterson
Economy of ING
In addition, Asia’s LNG imports have declined due to high prices.
According to the latest gas report of the International Energy AgencyAsia’s imports of spot or short-term LNG fell 28% in the first eight months of the year compared with the same time last year. Overall LNG imports fell 7% year-on-year.
Imports to China – currently the largest global importer of LNG – fell the most by 59%. The IEA said the declines in LNG imports by Japan, Pakistan and India were 17%, 73% and 22% respectively.
The agency explained that high prices not only deter Chinese buyers, but also the country’s slowing economy, milder winter temperatures and strong domestic coal and gas production.
These factors have created opportunities for more coal use in Asia, amid efforts to reduce fossil fuel use. The Korea Electric Power Corporation, for example, has begun using more coal in recent months, according to the Institute of Energy Economics and Financial Analysis.
The company used about 26% more coal in July this year than it did last month, but still less than the volume used last year, data from IEEFA shows.
IEEFA energy finance analyst Ghee Peh said: “KEPCO data shows that power generation from coal and LNG have both declined since May due to higher prices compared to the same period last year. a month of clear increase compared to the month of power generation”.
LNG imports in China – currently the largest importer of LNG globally – fell the most at 59%.
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This has led to the fact that South Korea – which, like Japan, uses more gas than other Asian markets – should to some extent have to compete for limited gas volumes like Europe. However, due to the availability of domestic supplies, they are more secure than in Europe, Whitworth added.
In other words, Asia’s dependence on coal and less on gas imports means that Asia has greater energy security.
All in all, tighter LNG supplies and higher prices now mean some countries will have to rely on relatively “cheaper and dirtier fuels”, ING Economics head of commodity strategy , Warren Patterson said in a recent note.
“One can expect that the high fossil fuel price environment will accelerate a green push from governments across Asia, particularly as some of these economies are importers,” said Patterson. big net energy,” says Patterson.
“Clearly, however, the rollout of renewables takes time and will not alleviate security concerns in the short term.”
“We could therefore see more impetus to boost fossil fuel supplies and thus reliance on these dirtier fuels.”
