Asian Power Shift: Coal Surges Amidst LNG Crisis
In the wake of supply disruptions due to the Iran war, major Asian LNG importers such as Japan and South Korea have turned to coal-fired power generation. This shift comes as LNG prices soar and coal supplies remain steady, driving a significant increase in coal imports in both countries.
Japan and South Korea, two of Asia's largest LNG importers, are increasingly turning to coal-fired power to offset supply disruptions caused by the Iran conflict. Market data reveals this shift began in April and intensified into early May as LNG prices surged due to the conflict.
Data from the Japanese Electricity Market Data Hub and Korea Power Exchange highlights a marked downturn in gas-fired power generation, reaching two-year lows in Japan and six-month lows in South Korea. This switch underscores the impact of geopolitical tensions on energy strategies, with Iranian retaliation significantly reducing LNG supplies from Qatar.
The power generation shift has sparked a rise in coal imports. Japan's coal-fired power saw an 11.1% increase in April, while South Korea's rose by 39.7% year-on-year. Experts attribute the growing reliance on coal to its consistent supply chain, which remains unaffected by the geopolitical turmoil.
(With inputs from agencies.)
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