11 Insight Dec

www.platts.
com November 2011

Securing Our
Energy Future
page 47
Asian Nuclear Power
Balancing Risk
and Security
page 24
2012
Asia Energy
Outlook
Exclusive
2011 Platts
Top 250
Global
Energy
Company
Rankings
www.platts.com November 2011

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November 2011 insight 1
Publishers Note
Guest Editors Note
Martin Daniel
Patsy Wurster
Tenth Anniversary of the Platts Top 250 Global Energy Company Rankings
Sees Dramatic Growth in Asia
Welcome to the 2011 Asia Energy Outlook issue of Platts Insight. In this issue Ross
McCracken, Platts editor of Energy Economist, looks back over the past ten years of
Rankings to see how the rapid growth of energy demand in China and India has
played a role in not only changing the landscape of energy in Asia, but in the world.
The search for affordable, sustainable energy marches on as the world contin-
ues to struggle with economic crises and natural disaster fallout. In the following
pages distinguished Platts editors review some of the past years major challenges
and identify the most promising opportunities for securing our energy future.
Platts Top 250 Global Energy Company Rankings
TM
ranks the worlds top energy
companies by nancial performance, identies whos up and whos down, who
are the fastest growing, and who are biggest upward movers in the previous year.
The Rankings also provides a breakdown of the Top 250 by industry and region
while offering commentary on trends and movement within the list.
I hope you gain some new insight from this issue!
Patsy Wurster
Publisher, Platts Insight
The theme of securing our energy future runs through this issue of Insight.
Energy security requires many things, but the key ones are the availability of
adequate resources, technologies and market structures. Many other considerations
come into play, not least having a long-term perspective and policies, but these
three factors are central.
At a time of high and volatile energy prices driven by apparently inexhaustible
demand it may seem surprising to say that Asias problem is not insufcient energy
options but choosing within a wide range of them. However, this is one of the mes-
sages to come out of many of the articles in this issue.
Whether it is undertaking energy conservation measures, deciding whether to
retain nuclear power plants, choosing between the various new and renewable en-
ergy options, pursuing decentralized but integrated energy systems, looking to un-
conventional gas, opting for more conventional gas and other fossil fuel resources
such as coal, orand linked to the latterassessing the economic and technical
feasibility of carbon capture and storage, the message is clearit is not a lack of op-
tions but making optimal choices between them.
While making the right choices is far from easy, and will certainly vary by ju-
risdiction, two things are clear. First, many of these choices will be made in Asia,
not least by dint of its continued growth in economic activity and energy demand.
Second, making the right decisions requires as much information as possible. This
is where the availability of resources and technologies must be complemented by
market structures and mechanisms that allow informed choices, above all on price.
Putting those structures and mechanisms in place is largely down to govern-
ments and industry players. But as several articles in this issue show, assisting the
process through robust pricing and news services is also an integral component,
and one that is central to Platts mission.
Martin Daniel
Editor, Platts Power in Asia
2 insight November 2011
Inside
Authors
1 Publishers Note
Patsy Wurster
1 Guest Editors Note
Martin Daniel
4 Oils Price-Demand Paradox
Ross McCracken
9 Asia Pacic Looks to
Unconventional Gas
Christine Forster
13 The Asian LNG Market Strides Ahead
Hong Chou Hui
19 Renewables Industry Continues
Shift to Asia
David R. Jones
24 Asian Nuclear Power Balancing
Risk and Security
Martin Daniel
30 CCS in Europe: Filling
the Funding Void
Henry Edwardes-Evans
36 Feeding the Dragon: China Fires Up
the Coal Market
James OConnell
40 India: New Policy Directions
Ross McCracken
44 Steel Industry Evolution Favors
Singapore as Risk-Management Center
Francis Browne
47 Securing Our Energy Future
Chee Hong Tat, Energy Market Authority
50 Asia Forges Ahead
(Platts Top 250 Global Energy
Company Rankings
)
Ross McCracken
Martin Daniel Francis Browne
David R. Jones Ross McCracken James OConnell
Henry Edwardes-Evans Christine Forster
Hong Chou Hui
Francis Browne is a managing editor in the price group, responsible
for market reporting in many markets outside of Oil. He joined Platts
in 2006 to head their steel initiative as Global Managing Editor of the
newly created newsletter Steel Markets Daily now being integrated
with Steel Business Briengs publications into the steel group at Platts.
Before Platts he spent more than 20 years trading steel and raw mate-
rials internationally, after graduating in 1984 with a degree in Econom-
ics from the University of Northumbria, UK.
Martin Daniel read Modern History at Oxford University. After research
on economic history there, he joined the Economics Unit of the then
British Coal Corporation, following which he became head of the
Supply, Transport and Markets Group at IEA Coal Research. He then
worked at a UK energy media and consultancy company until 2001
when he joined Platts, where he edits the newsletter Power in Asia. He
is an active naturalist, specializing in Asian forest birds.
Henry Edwardes-Evans has a bachelor of arts degree from Oxford
University, where he studied English Literature. As a trainee
journalist at Financial Times Business, he worked on a number of
energy-related publications before being appointed editor of EC En-
ergy Monthly in 1996. Henry launched and edited the FT newsletter
Power in East Europe, which subsequently became Platts Energy in
East Europe. In 2000, he took over editorship of FTs agship energy
newsletter, Power in Europe, now Platts Power in Europe, develop-
ing power plant trackers and managing three other highly-regarded
Platts newsletter titlesEnergy in East Europe, Power UK and
Power in Asia.
Christine Forster began writing for Platts based in London in 1987,
initially covering European LPG markets and news. After a stint editing
Platts weekly petrochemicals newsletter, she was made the Editor-in-
Chief of Platts Petrochemicals. In 1992, Forster returned to her native
Australia, becoming Platts regional news correspondent, covering the
oil and gas, and metals and mining sectors. In 2006, Forster became the
Asia Pacic Editor for Platts agship daily newsletter, Oilgram News.
She is currently Platts senior writer in the region, covering the up-
stream and downstream oil, natural gas and LNG industries in Australia
and the rest of Asia Pacic.
Hong Chou Hui graduated from the National University of Singapore.
He is a multiple-award winning news editor and analyst who helped
launch Platts spot LNG Japan Korea Marker benchmark in 2009. The
JKM has grown into Asias leading spot LNG index. He has developed
further LNG price points for Asia, with the latest launch of a delivered
West India LNG price on August 1, while overseeing the start of Platts
LNG market coverage in Europe.
David R. Jones is Platts global renewable energy editor, based in
London. An environmental journalist with 20 years experience, Jones
edited newsletters on US state and local government, medical waste
management, oil pollution, and solid waste before joining Platts in 2001
to cover coal and energy policy.
Ross McCracken, editor of Energy Economist, joined Platts in 1999 to
run the European and West African crude desk. He was previously
an editor with an Oxford University-based political and economic
consultancy, and has taught in Poland and China. He holds a masters
degree in European studies from the London School of Economics and
his undergraduate degree is from the University of East Anglia.
James OConnell, international coal managing editor, joined Platts
Metals in 2001, covering global precious metals trading. He joined the
coal team in early 2007, leading reporters in Europe and Asia producing
news for the global coal, electrical and steel industries. He previously
worked for Irish broadcaster RTE. He holds a BA in English and History
and a Higher Diploma in Applied Communications from the National
University of Ireland.
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ISSN 2153-1528 (print)
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Oil demand forecasts are shrinking
as the prospects for world economic
growth falter, but prices remain high.
Are the markets rational maximizers
being slow to factor in supply and de-
mand information, or are other forces
at work? Analysts continue to nd ex-
planations in oil market fundamen-
tals, but a lack of any real predictive
power is bringing into question their
value as an analytical framework.
Demand for oil is still expected to
rise in 2012, but not by as much as
previously thought. That is the mes-
sage from bodies such as the US Energy
Information Administration (EIA), the
International Energy Agency (IEA) and
the Organization of the Petroleum Ex-
porting Countries (OPEC). The news
should be no surprise; reductions in
forecasts for oil demand follow reduc-
tions in estimates for world economic
growth just as night follows day. The
big macroeconomic numbers are fed
into other models, creating a cascade
of announcements that all derive from
much the same source.
Even when bodies such as the IMF,
whose numbers are widely used,
change their forecasts, as they did in
June, market actors should already
have a good idea of where those num-
bers are heading. Based on their own
monitoring, market actors are con-
stantly assimilating new demand and
supply-side information and adjusting
their market positions accordingly.
That, at least, is the theory.
Forecast Revisions
The EIA in its September 2011 Short
Term Energy Outlook, based its oil de-
mand forecast on what it calls world
oil-consumption-weighted real GDP
growth of 3.1% in 2011 and 3.8% in
2012. This compared with growth ex-
pectations of 3.4% and 4.1% a month
earlier. Its forecasts for real US GDP
growth have been chopped dramatical-
ly from 2.4% in 2011 and 2.9% in 2012
to 1.5% and 1.9%, respectively.
However, if its forecast for growth
in oil consumption in 2012 has been
slashed by 250,000 b/d, that for 2011
remains unchanged. In addition, its
price forecast for 2011, for the US re-
ner average crude oil acquisition cost,
remained unchanged at $100/barrel.
The EIA still presents a bullish outlook,
expecting inventories to fall in fourth-
quarter 2011 and beyond. But, hedging
its bets, it says that downside risks to
price arguably predominate.
OPEC has revised its expectations for
world growth from 3.7% in 2011 and
4.0% in 2012 to 3.6% and 3.9%, respec-
tively, following an earlier downgrade
in August. What was new in its analy-
sis is that while the August reduction
was centered on slowing US growth,
this time the downgrades reect more
widespread economic weakness, with
growth forecasts for the euro zone, Ja-
pan and India all falling.
The IEA has also reduced its assump-
tions about world economic growth. In
August, the IEA said it was continuing
oil
Oils Price-Demand
Paradox
Ross McCracken, Editor, Platts Energy Economist
oil
to incorporate global GDP growth of
4.2% and 4.4% for 2011 and 2012 re-
spectively, based on IMF forecasts made
in June. In its September report, the
agency has assumed global GDP growth
of 3.9% in 2011 and 4.2% in 2012 with
signicant downside risks. This has re-
sulted in a reduction in its forecast for
oil demand in 2011 of 200,000 b/d and,
in 2012, of 400,000 b/d.
Grim Outlook
The possibility of a broader econom-
ic malaise is supported by the OECDs
composite leading indicators. The lat-
est data released in September signaled,
according to the OECD, a widespread
slowdown in economic activity, in-
cluding China. Both the EIA and OPEC
have so far assumed an unchanged rate
of GDP growth for China in 2012. The
OECD report said the leading indica-
tors in both the OECD and the BRIC
countriesBrazil, Russia, India and
Chinaall pointed more strongly to
economic slowdown than they had the
previous month.
Moreover, Europe appears unable
to escape the threat of a debt default,
the knock-on consequences of which
could be highly damaging for Europe-
an banks, the euro zone and the wider
European economy. Greeces inability
to implement the scal austerity mea-
sures demanded as part and parcel of its
EU-led nancial bailout caused Germa-
nys Economy Minister Philipp Roesler
to say that Europe could no longer rule
out an orderly default. After a series
of crises and supposed solutions a de-
fault, or partial default, looked more
likely than not at the time of writing
(early October).
The fact that oil prices have only
reacted temporarily to the weakening
economic outlook is in itself cause for
concern. For the year to mid-Septem-
ber, prices have on average only been a
few cents per barrel lower than in the
record year of 2008. Prices have been
persistently high for a long time: while
the 30 and 90-day rolling averages ap-
pear to have peaked, the 12-month
rolling average for Platts Dated Brent
continues to climb and towards the
end of September surpassed the histor-
ic peak of 2008.
The high price of oil acts as a con-
sumption tax on consumers already hit
by falling real incomes. Spending on
transport fuel and heating as a propor-
tion of consumer expenditure is rising,
making consumption more sensitive to
price increases. This is a reversal of the
period leading up to 2008, when rising
oil prices were unexpectedly absorbed
by consumers because, analysts hur-
riedly concluded, expenditure on oil,
while expensive, had fallen as a propor-
tion of household income.
30
60
90
120
150
Sep-11 Sep-10 Sep-09 Sep-08 Sep-07 Sep-06
365-day average
90-day average
30-day average
Daily price
1. Dated Brent ($/barrel).
Source: Platts
oil
High Prices
If there are arguments for prices
falling, there are also reasons why
prices should remain high. First is
the Arab Spring. Libyan exports
have been lost almost entirely to the
market and the speed with which
they will return is hard to gauge. A
resumption of full capacity by end-
2012 is probably optimistic, although
this is what OPEC is predicting in its
latest monthly oil report.
Other less important exporters in
the region, such as Yemen and Syria,
remain in turmoil, while to the south
Sudans oil industry is wrestling with
the division of its upstream from its
export infrastructure brought about
by South Sudans secession from the
north. While the big oil beasts of the
Middle East appear to have weath-
ered the revolutionary storm, it is
hard to say what currents of discon-
tent continue to flow beneath the
surface and when they might erupt.
The Middle Eastern risk premium is
alive and well.
There is also the general assump-
tion that Saudi Arabia in particular
has bought off protests only at the
cost of much higher domestic expen-
diture. Riyadh may have played a piv-
otal role in increasing output to com-
pensate for the loss of Libyan crude,
but its price expectations have risen.
It follows that it may intervene earlier
than before with output cuts should
prices embark on a sustained down-
ward path.
The IEA looks to short-term funda-
mentals to explain what it calls the
demand-price paradox. It argues
that consumption has been running
well ahead of supply. It estimates that
supply lagged demand by over 0.5
million b/d in first-half 2011, while
in July and August OECD industry
stocks fell below the five-year aver-
age for the first time since June 2008.
The IEAits italicscontrasts ac-
tual and pronounced tightening in
the market evident since mid-2010
against the potential for slightly
easier market fundamentals in the
months ahead.
From Fundamentals to Price
Futures, it would now seem, are look-
ing backwards instead of forwards. In-
stead of tomorrows prices today (last
years analytical fashion), the market
is providing yesterdays prices. The
IEAs current analysis assumes that
the drivers of oil price formation are
rmly located in recent short-term
fundamentals. Oil prices are not (yet)
reacting to the gathering headwinds
affecting the world economy. Investors
are gradually assimilating new market
information as it emerges and the bal-
ance of risk, for the moment, remains
on the upside.
Demand and supply make up the
fundamentals of a market. These, ac-
cording to orthodox economics, drive
prices. Yet the relationship between
supply and demand on the one hand
and prices on the other has almost no
predictive power. There is no knowing
with any certainty how the market will
interpret any particular piece of infor-
mation regarding supply and demand.
Events that should in theory move the
market often appear to be ignored,
while other seemingly insignicant
events sometimes trigger big changes.
Take May 5, 2011. Oil prices lost
about 9% of their value. What had
been worth $126/barrel one day was
worth $113/b a few days later. There
was no major news concerning supply
and demand that day. The explanation
given by analysts at the time was that
an assortment of small events had co-
alesced to change market opinion en
masse on May 5.
Such sharp movements in price are
often described as corrections. The
Demand and supply make up the
fundamentals of a market. These, according
to orthodox economics, drive prices. Yet the
relationship between supply and demand
on the one hand and prices on the other has
almost no predictive power.
oil
The link between fundamentals and price
formation is complex. It is easier to say what
it is not rather than what it is because the only
thing that can be said with certainty is that
there is no straightforward relationship.
emphasis is on the market nding the
right level after the correction. Less at-
tention is paid to the fact that if a cor-
rection has to be made at all it is because
the market was formerly mispricing the
commodity. Nor is there much expla-
nation for what looks like a behavioral
reaction rather than an orderly adjust-
ment to new information.
With oil demand indicators weaken-
ing and supply rising, it appeared at the
time of writing (early October) that the
oil price is due one of its corrections,
perhaps larger than the $6/b loss seen
on September 22, if not a protracted
downward trend. But in September Dat-
ed Brent prices were in fact on average
higher than in August, despite a clearly
worse macroeconomic outlook.
In the oil market downside and up-
side risks almost always coexist, mak-
ing it possible to construct a plausible
argument for prices going in either di-
rection. There is such a wide variety of
factors at play that an argument can be
made to justify almost any price move-
ment (particularly retrospectively). It
simply depends on which factors are
given more weight.
The link between fundamentals and
price formation is complex. It is easier
to say what it is not rather than what
it is because the only thing that can
be said with certainty is that there
is no straightforward relationship. If
there was, price forecasting would be a
much simpler business. It remains an
enigma that no matter how clear and
upfront price forecasters are about the
painful limitations of their art, clients
continue to ascribe value to largely
meaningless numbers.
Yet it is an economics basic that
prices move in relation to supply and
demand. Writ large this is presented
in more complex form by something
known as the dynamic stochastic
general equilibrium. On top of this,
according to the Financial Times col-
umnist John Kay, comes the efcient
market hypothesis, which assumes
that all available information is incor-
porated into market prices, and then
the capital asset pricing model, which
Kay describes as saying that prices are
outcomes made up of the decisions of
rational actors acting on a belief in ef-
cient markets.
This all hangs together very nicely:
prices are driven by fundamentals; all
of the available information about these
fundamentals is incorporated into mar-
ket decisions; and these decisions are
made by rational actors who believe in
(and by and large work within) fairly
efcient markets. The outcome is accu-
rate, market-driven prices.
However, a belief in these models also
produces an unswerving commitment
to a particular type of fundamentals-
based analysis. As in any closed-loop
philosophical system, an explanation
can always be found; the lack of real
predictive power being brushed aside.
Analysts looking to fundamentals have
to nd an explanation for incongruous
price movementssuch as the current
demand-price paradoxhandcuffed
by the circular logic that if price bub-
bles cannot exist then they dont exist.
Market Behavior
There is growing evidence to suggest
that oil prices are not formed solely by
demand and supply factors. A better
way to put this is that supply and de-
mand remain critically important, but
the way new information about them
is interpreted by market actors is inu-
enced by a host of other factors. There
is no simple relationship.
It might further be argued that mar-
ket actors are not the rational maxi-
mizers beloved of classical economics.
With that, the whole complexmade
up of fundamentals, the efcient mar-
ket hypothesis, and the capital asset
pricing modelappears to be on very
shaky foundations, as Kay argues. One
oil
way around this is to argue that market
actors are responding to a wider set of
parameters than just information re-
garding oil supply and demand.
While it may not be clear how the
nancialization of oil markets has af-
fected price formation, it is at least clear
that conditions are very different from
ten years ago. There has been a huge
rise in trading volume over the last ten
years in energy futures. In particular,
the proportion of nancial trade to
physical trade in energy commodities
has multiplied many times over. This
has been accompanied by the creation
of commodity indices, such as the S&P
GSCI. These have allowed investors pre-
viously external to the market exposure
to commodities without having to be-
come embroiled in the complexities of
physical trade.
This process was driven by a period
of poor returns in other markets which
prompted investors to look for new as-
set classes. This is often also attributed
to the partial deregulation of commod-
ity markets in the US under the 2000
Commodity Futures Modernization
Act. In addition, there was a widespread
beliefpopularized by a 2004 article
entitled Facts and Fantasies about Com-
modity Futures by Gorton and Rouwen-
horstthat commodities represent a
hedge against ination and that returns
were not correlated with movements in
other markets.
Backed by the likelihood that OPEC
would act to support prices by restrict-
ing supply if they fell too far, this gave
oil some of the characteristics of a safe-
haven investment. This view expands
the factors that inuence oil prices be-
yond physical market supply and de-
mand, but doesnt necessarily conict
with the established doctrine of ratio-
nal actors, perfect information and ef-
cient markets.
The idea that oil is like gold, the Swiss
franc or US treasuries is also backed by
the wider narrative that continues to
dominate the oil market, although it
has been shaken by the nancial cri-
sis. That narrative is broadly that Asian
growth in oil demandits consum-
ers protected by price regulationwill
continue to outstrip any demand de-
struction and contraction in oil con-
sumption in the OECD by a consider-
able margin.
On the supply side, investment will
lag, production costs will rise and out-
put will increasingly be concentrated in
the hands of an OPEC keen to extract
the maximum value possible from its
natural resources. As a result, oil can re-
main strong even if western economies
stagnate and it will certainly look better
than OECD equities or bonds. What-
ever short-term gyrations the oil price
might take, the long-term trend is up.
If prices defy short-term fundamen-
tals, then an explanation can always
be found by looking at fundamentals
in the medium or long term. For those
reasons, the oil market has a tenden-
cy to overshoot; prices go higher and
stay higher longer than they ought
to, resulting in periodic dramatic ad-
justments, when high prices eventu-
ally become unsupportable. Oil can be
mispriced as a commodity within the
energy complex, but perhaps not in re-
lation to other nancial markets and
investments.
However, this may be only half the
story. If oil has become just another
class of nancial asset, then it follows
that it is as vulnerable to bubbles, spec-
ulation and mispricing as any other
market. From the South Sea Bubble to
the dot.com bubble to the gross mis-
pricing of risk in the US mortgage bond
market that was at the epicenter of the
most recent nancial crisis, it is becom-
ing increasingly implausible to argue
that the oil world is a miraculous excep-
tion from the behaviors that character-
ize other markets.
If prices defy short-term fundamentals, then an
explanation can always be found by looking at
fundamentals in the medium or long term. For
those reasons, the oil market has a tendency to
overshoot; prices go higher and stay higher
longer than they ought to ...
The development of the regions coal-
bed methane (CBM) is underway, but
governments in Asia have also begun
eyeing shale gas, with hopes that it
could transform their domestic gas sup-
plies as it has the US market in recent
years. According to the US Energy In-
formation Administration (EIA), shale
gas accounted for 16% of total domestic
gas production of 21 trillion cubic feet
(Tcf) in 2009, but is forecast to grow to
12.2 Tcf or 47% of total output of 26.3
Tcf in 2035.
Australias CBM industry is by far the
most mature unconventional gas sec-
tor in Asia Pacic, now boasting three
sanctioned liqueed natural gas (LNG)
export projects based on reserves in the
east coast state of Queensland. Within
ve years, those projects will represent
total investment of around $50 billion
and will be supplying more than 25
million metric tons per year of LNG,
mostly to buyers in Asia.
The approvals in 2010 and 2011
of the worlds rst CBM-based LNG
projects marked the culmination of
a decade of rapid development in the
Queensland gas industry, sparked by a
government policy requiring that 13%
of electricity sold in the state from
2005 onward be generated from gas.
In 2007, the requirement was lifted to
15% by 2010.
Development only got underway in
earnest, however, when some of the
worlds biggest oil and gas companies
started taking notice of Queenslands
massive undeveloped CBM reserves,
located on the doorstep of Asias fast-
growing energy markets. According to
Australian consultancy EnergyQuest,
Queenslands total proven and probable
CBM reserves as at August 2011 were
34,986 petajoules or around 33 Tcf.
The huge resources on offer attracted
more than $20 billion worth of merger
and acquisition transactions over the
latter part of the 2000s, as internation-
al players jostled for gas to supply the
demand in Asia.
The M&A activity peaked around
2008, when US oil major ConocoPhil-
lips agreed to pay local player Origin
Energy nearly $8 billion for 50% of its
Australia Pacic LNG project. Around
unconventional gas
Asia Pacic Looks to
Unconventional Gas
Christine Forster, Platts Senior Writer, Asia Oil News
Australia has so far led the way among the Asia Pacic
nations looking to develop their unconventional gas reserves.
But other players in the region, notably China and India,
are now starting to turn their attention to this potentially
game-changing energy source.
unconventional gas
that time, Australias Santos sold 40%
of its Gladstone LNG project to Ma-
laysias Petronas for $2.5 billion, and
UK gas company BG Group acquired
Queensland Gas Company for $3.7 bil-
lion and Pure Energy for $730 million
to provide resources for its Queensland
Curtis LNG project.
The consolidation process heated up
again in 2010, when global giants Shell
and PetroChina spent $3.2 billion tak-
ing over local CBM producer Arrow En-
ergy to underpin their own LNG proj-
ect. Respective stakes of 27.5% and 15%
in Gladstone LNG were also sold to
Frances Total for $1.44 billion and Ko-
rea Gas Corporation for $610 million.
In other 2010 deals, China National
Offshore Oil Corporation and Tokyo
Gas bought interests of 5% and 1.25%,
respectively in Queensland Curtis LNG.
And 2011 has seen Arrow Energy offer
around $540 million for local gas com-
pany Bow Energy, while Chinas Sino-
pec has paid $1.765 billion for 15% of
Australia Pacic LNG.
Some of the focus has also shifted
to Queenslands neighboring state of
New South Wales, where EnergyQuest
estimates proven and probable CBM re-
serves are about 2.8 Tcf. Santos in July
2011 unveiled plans to spend $984 mil-
lion acquiring the 79.1% it does not al-
ready own in Eastern Star Gas, holder
of more than 1 Tcf of CBM resources in
New South Wales.
Meanwhile, Australias shale gas in-
dustry began stirring into life in the
latter part of 2010 and 2011 as small
local players started to talk up the po-
tential of the resource. A signicant
milestone was passed in August 2011
when Beach Energy booked a 2 Tcf
contingent resource in central Austra-
lias Cooper Basin, the countrys largest
onshore conventional oil and gas prov-
ince, after the rst successful testing of
a shale gas well.
Although exploration of shale gas in
Australias central and western regions
is in very early stages, acreage held by
domestic juniors is starting to attract
the attention of heavyweights such as
ConocoPhillips and BG, who were so
prominent in the development of the
east coast CBM industry. Their atten-
tion has prompted speculation that
the maturing of Australias shale gas
sector might replicate the CBM boom,
and already some participants are
talking of developing projects for ex-
port markets.
But not everyone with an interest in
Australias unconventional gas sector
is focused on pushing ahead with de-
velopment. Environmental and farm-
ing lobby groups are increasing their
scrutiny of the industry as it rolls out,
with a particular focus on the impacts
of CBM and shale gas drilling and hy-
draulic fracture stimulation of wells on
underground aquifers and rural land.
The gas developers have so far satis-
ed Australias governments and regu-
lators that they are responsible opera-
tors, but they have also acknowledged
they are under a media and public mi-
croscope and need to be accountable
and transparent as they go about drill-
ing tens of thousands of wells across
prime agricultural land.
Big Plans in China
In China, the development of CBM
is well underway, albeit more slowly
than Beijing had targeted. Shale gas,
however, is regarded as having massive
potential and its development has been
made a priority by the State Council,
the countrys cabinet.
Production Consumption Imports
(Exports)
Proved natural
gas reserves
Technically Recoverable Shale
gas resources (Tcf)
China 2.93 3.08 5% 107 1,275
India 1.43 1.87 24% 37.9 63
Australia 1.67 1.09 -52% 110 396
1. Asia shale gas resources
Source: US Energy Information Administration (April 2011)
unconventional gas
The USs EIA in April 2011 estimated
that China had one of the worlds largest
recoverable shale gas reserves of 1,275
Tcf, considerably more than the 862 Tcf
held by the US. In its International En-
ergy Outlook 2010, the EIA said tight
gas, shale gas and CBM resources were
expected to account for 56% of Chinas
total gas production in 2035.
Of the countries which are actively
seeking to develop unconventional gas,
China is close to the top of the list in
terms of potential, analysts Neil Bev-
eridge and Ying Lou from Hong Kong-
based Bernstein Research said in a July
2011 report. The reason for this is the
unconventional resource base which
could be enormous and the growth in
the Chinese gas market - which will be
the single biggest driver of global gas
demand over the next decade.
Chinas Ministry of Land and Re-
sources in June 2011 held its rst-ever
public tender for shale gas blocks in the
Sichuan and Tarim basins. It awarded
permits to Sinopec and Henan Provin-
cial Coal Seam Gas in Nanchuan and
Xiushan, respectively.
Shale gas production by state-con-
trolled giants PetroChina and Sinopec
is expected to be just 106 Bcf by 2015,
representing less than 2% of Chinas
domestic production, according to Ber-
nstein Research. The analysts cited esti-
mates from PetroChina putting Chinas
current natural gas supply at 160 bil-
lion cubic meters, or about 5.65 Tcf, of
which 3.53 Tcf is produced locally and
2.12 Tcf is imported.
PetroChina expects Chinas gas de-
mand to reach between 8.5 and 9.2 Tcf
by 2015 and 14.1 Tcf by 2020. By then,
Chinas production is expected to be
around 7.1 Tcf, of which 2.2 Tcf or 30%
would be shale gas, tight gas and CBM,
Bernstein Research said.
Of the 2020 gas production, CBM is
expected to account for 0.71 Tcf or 10%
of the total. China is also aiming to
have established 0.53 to 1.1 Tcf of shale
gas production capacity by that date,
according to PetroChina gures quoted
by the analysts.
Despite its potential, the develop-
ment of Chinas shale gas industry
will face challenges, Beveridge and
Lou said. Chinese shales are in more
difcult terrain and are deeper than
in the US, and they contain non-hy-
drocarbon gases which will add to the
cost of production.
In addition, water availability in the
key Tarim Basin, limited pipeline infra-
structure and the highly consolidated
nature of the Chinese industry in the
hands of the three state-controlled oil
companies might act as barriers to rapid
development of shale gas, they added.
PetroChina and independent assess-
ments have put Chinas CBM resources
at up to 1,300 Tcf, and in its 11th Five-
Year Plan to 2010, Beijing was aiming
for production by the end of the period
of 177 Bcf. The target was missed, how-
ever, with output estimated at around
53 Bcf in 2010.
Project Operator Cost ($bn) Capacity (million
mt/year)
Status
Queensland
Curtis LNG
BG Group through
QGC
15 8.5 Approved for startup
2014
Gladstone
LNG
Santos 16 7.8 Approved for startup
2015
Australia
Pacic LNG-1
ConocoPhillips/
Origin Energy
14 4.5 Train 1 approved
startup 2015
Australia
Pacic LNG-2
ConocoPhillips/
Origin Energy
6 4.5 Train 2 FID expected
early 2012
Arrow LNG Shell/PetroChina n/a 8 FID expected 2012
2. Major Queensland CBM-to-LNG projects
Source: Platts
unconventional gas
But the industry has government
backingwith producers receiving
a subsidy of Yuan 0.2 ($0.03) per cu-
bic meter and enjoying tax breaks on
equipmentand is expected to contin-
ue expanding. According to state media
reports, the 12th Five-Year Plan will in-
clude a CBM production target of 0.32
Tcf from surface wells by 2015.
Indian Prospects
The Indian government formulated
a policy in 1997 for the exploration
and production of CBM and began
awarding blocks through international
bidding rounds in 2001. In the four
rounds held up to July 2010, 33 blocks
have been awarded containing total es-
timated resources of 62 Tcf, according
to the Directorate General of Hydrocar-
bons. DGH, which is Indias upstream
regulator, pegs Indias total CBM re-
sources at 92 Tcf.
The rst CBM producer was the lo-
cal Great Eastern Energy, which be-
gan commercial operations at its Ra-
niganj elds in West Bengal state in
July 2007. The elds are producing
around 150 Mcf/day, according to g-
ures from the DGH.
With more blocks due to start com-
mercial production, Indian CBM out-
put is projected to reach around 7,400
Mcf/day by the scal year ending
March 2015.
Meanwhile, the DGH and Indias oil
ministry are working on a policy frame-
work for shale gas. The framework was
expected to be ready by mid-2011, but
it had not been published at the time of
writing (September 2011).
The taskforce working on the policy
is looking at issues such as land use, en-
vironmental concerns and the simulta-
neous exploitation of conventional oil
and gas along with shale gas, according
to DGH ofcials. Shale gas potential
exists in most of Indias conventional
elds, they added.
The oil ministrys timeline envisages
that the rst shale gas auctions will
be held by the end of 2011. Six basins
have been identied for assessment in
the rst phase.
While Australia has led the way, and
China and India are positioning them-
selves as major players, many other Asia
Pacic countries are looking at the po-
tential of unconventional gas. Indone-
sia, for one, is seeking to develop its un-
conventional gas resources as part of its
push to reduce its dependency on oil,
according to government ofcials.
CBM production is expected to start
in late 2011 at two sites in East Kali-
mantan, with the local investor Ephin-
do developing the Sangatta permit and
Vico, a joint venture between Italys Eni
and the UKs BP, working at the Sanga-
Sanga block. Ephindos output will be
used at a local electricity generating
plant, while Vico is expected to supply
its output to the Bontang LNG export
plant, said a spokesman for Indonesias
upstream regulator BPMigas.
The Indonesian government antici-
pates full-scale development of CBM
will be underway by 2015, when it ex-
pects production to be 500,000 Mcf/
day. Output is forecast to rise to 1 Bcf/d
in 2020 and 1.5 Bcf/d in 2025.
Government estimates put Indone-
sias CBM reserves among the worlds
largest at 453 Tcf, more than double its
conventional natural gas deposits of
about 190 Tcf.
Indonesia awarded a total of 32 CBM
blocks over the period from 2008 to Au-
gust 2011. In addition to state-owned
oil and gas company Pertamina, in-
ternational players including BP, Total
and ExxonMobil have so far taken up
CBM permits.
Developers of Indonesias CBM are
also being offered more favorable re-
turns than are in place for conven-
tional gas production. CBM produc-
ers will receive 45% of the after-tax
profit, with the remaining 55% go-
ing to the government, compared
with the 30:70 split for conventional
gas production.
Shale gas is still a long way from de-
velopment in Indonesia, with Ministry
of Energy and Mineral Resources of-
cials estimating that production is as
far off as 2020. Government estimates
put the countrys shale gas potential at
as much as 570 Tcf based on studies in
Sumatra, Java, Kalimantan and Papua.
LNG demand in Asia bounced back
in 2010 on the back of extreme cold
and hot temperatures coupled with
economic recovery across the region,
after the global nancial crisis at the
end of 2008 curtailed LNG purchases
in 2009. And as 2010 drew to a close,
extreme winter temperatures in Europe
drove LNG requirements up, providing
support for Asia LNG spot values in the
rst quarter of 2011.
Then the March 11 earthquake and
tsunami hit Japan, Asias top LNG buy-
er. The permanent or temporary loss
of a large amount of nuclear and other
generating capacity has dominated the
Asian LNG market since then.
And all this in the region which is
the dominant market for LNG. Grow-
ing shale gas production in the US has
reduced its need for imports to virtu-
ally nil, while European demand has
been limited only to occasional spot
purchases during summer and winter.
Asia accounted for almost 61% of the
2.1 billion barrels of oil equivalent of
world LNG imports in 2010, according
to data from independent LNG consul-
tant Andy Flower. Japan was Asias lead-
ing importer, purchasing 31.7% of total
LNG imports, followed by South Korea
(14.8%), Taiwan (5%), India (4.2%),
China (4.2%) and Kuwait (0.8%).
Japanese LNG imports in 2010 in-
creased by 8.6% on year to 70.01 mil-
lion metric tons (mt), reaching their
highest-ever level, according to cus-
toms data released by Japans Ministry
of Finance. Similarly, South Korean
LNG imports in 2010 were up 26.3% on
year at 32.6 million mt, according to a
Platts estimate derived from the coun-
trys customs data.
Across the board, Asian buyers im-
ported more LNG in 2010 than in the
previous year. The trend has continued
in 2011.
Traditional buyers such as Japan and
South Korea, which currently have al-
most 180 million mt/year and 40 million
mt/year of LNG import capacity, respec-
tively will continue to be a dominant
force. But more recent market entrants
will play an increasingly important role.
According to the IMF World Econom-
ic Outlook, Chinese and Indian GDP
is projected to grow by around 10%
and 8%, respectively in both 2011 and
liqueed natural gas
The Asian LNG Market
Strides Ahead
Hong Chou Hui, Managing Editor, Platts Asia LNG
Asias LNG market continued to evolve in 2011, as the
volatility of the last few years, coupled with a major crisis
in Japan, shook up the region and increased players appetite
for further developments.
liqueed natural gas
2012, outperforming respective annual
growth of 1% and 4% in Japan and
South Korea over the same period. Cou-
pled with state support for gas use on
both jurisdictions, a marked increase in
demand for LNG imports is expected in
both countries.
This is already translating into new
LNG import capacity. For instance, In-
dia is currently adding 10 million mt/
year of regasication plant to its exist-
ing 13.6 million mt/year.
Meanwhile China had 12.3 million
mt/year of regasication capacity at
the end of 2010 but plans to add much
more. Of the 20 million mt/year of ca-
pacity under construction at the start
of 2011, some 6.5 million mt/year has
already entered service, with the state-
owned PetroChina having started up
the 3.5 million mt/year Rudong facility
in May and the 3 million mt/year Da-
lian terminal in September
Changing Seasonal Patterns
Not only is the Asian LNG market
growing fast, it is also evolving rapidly.
The surge in Japanese LNG demand after
the March 11 disaster has signicantly
altered the traditional pattern of shoul-
der month pricing in spot Asian LNG.
Platts Japan Korea Marker (JKM)
for spot cargoes delivered in April and
May averaged close to $11/MMBtu, well
above the previous winter levels. That
price boost, which also came prior to the
traditional summer buying season, was
largely led by Japanese utilities maxi-
mizing output at their gas-red plants.
With their generating capacity hav-
ing been worst affected by the disas-
ter, the Tokyo Electric Power Company
(Tepco) and Tohoku Electric, in partic-
ular, ran their thermal plants at close to
full capacity, and purchased LNG car-
goes through the spot market. Tohoku
Electric took 3-5 cargoes per month
from April through June, while Tepco
took more than 20 shipments across
April and May.
The buying activity in Japan coincid-
ed with purchases by Taiwans CPC, Ku-
wait Petroleum Corporation and Dubai
Supply Authority in preparation for the
summer, as well as demand from In-
dian and South Korean buyers. Mean-
while PetroChina and Thailands PTT
were looking for cargoes to commission
new LNG receiving terminals.
All this combined to boost spot LNG
prices during the shoulder months of
April and May. And a similarly atypi-
cal pattern occurred in September
and October.
LNG demand and spot prices in Japan
and North Asia have usually peaked be-
tween December and March, as heating
requirements drive gas consumption,
and again from July to September, when
increased air-conditioning require-
ments boost electricity and thus gas de-
mand. April to May and September to
November have thus typically formed
shoulder periods characterized by lower
gas demand and spot LNG prices.
For example, from December 2009
to March 2010 the average Platts JKM
price was $7.27/MMBtu, falling to an
average of $5.86/MMBtu in April and
May 2010. The price then rose to average
$7.51/MMBtu from July through Sep-
tember, as Japans hottest summer on
2
4
6
8
10
12
14
16
Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11
(million mt)
China South Korea Taiwan Japan India
1. Total Asian LNG imports.
Source: Platts
liqueed natural gas
record boosted air-conditioner use and
thus LNG demand, before falling again.
But for the reasons already noted,
Platts JKM for April and May 2011 av-
eraged $10.88/MMBtu compared with
the average of $9.82/MMBtu from De-
cember 2010 to March 2011. And at the
time of writing (mid September), the
JKM for September and October 2011
deliveries was averaging $15.31/MMB-
tu, again atypically higher than the av-
erage of $13.33/MMBtu for the period
from June to August.
The muted summer spot price re-
ected various factors. The summer
was generally cooler in North Asia
than in 2010, with temperatures in
Japan being only one degree Celsius
above the 20-year average, according
to data from USs NASA. And energy
demand in Japan was further reduced
by government-mandated conserva-
tion measures following the March 11
disaster, which was also still depress-
ing the level of economic activity and
thus energy demand.
The upshot was that Tepco and oth-
er Japanese companies imported more
cargoes than planned in May and June
[because of] the earthquake but addi-
tional requirements will be stable in
July and August, according to a source
close to Tepco. The source added that
Japans largest LNG buyer had lost the
seasonal aspect of its gas demand as a
result of the March 11 disaster.
Tony Regan from Singapore-based
energy consultancy Tri-Zen said the
austerity policy [of] switching off lights
will have an impact on demand, plus
there will be lower demand from ar-
eas affected by the quake. The Japa-
nese government asked companies to
cut summer power use by around 15%
through a host of initiatives with, for
instance, one trader telling Platts that
Kansai [Electric Power Company] has
shifted the lunch hour for its staff by an
hour to 1-2 pm from 12-1 pm. The peak
power and air-conditioning demand
period is typically from 1-4 pm so Kan-
sai should be able to save some power.
Chris Holmes from Purvin & Gertzs
London ofce noted that infrastructur-
al constraints would limit the impact
of the disaster on overall Japanese gas
demand for power generation. Japans
power market is very fragmented, with
each of the 10 power companies hav-
ing their own discrete service areas
with poor connectivity between service
areas so there is limited scope to move
power into the Tepco service region,
Holmes said.
Continuing Price Impact
Japans ongoing electricity supply prob-
lems could have a continuing impact on
both spot and term LNG prices, although
the impact of growing LNG demand on
prices could be mitigated by additional
LNG supplies from newly-commissioned
2
4
6
8
10
12
14
16
18
Jan Mar May July September Nov
($/MMBtu)
2009 2010 2011
2. JKM monthly average LNG prices.
Source: Platts
liqueed natural gas
liquefaction projects. Australias Pluto
LNG project, for example, is due to start
production in March 2012.
Holmes has said that, while sufcient
LNG production capacity may be avail-
able to meet likely demand over the
next couple of years, spot LNG prices
could still overtake term prices in Asia.
In this context it is no surprise that
[upward quantity tolerance] clauses
have been invoked, although this may
be a pre-emptive move to send a sig-
nal to the market that [Tepco] can lift
LNG at term prices, thereby making
an attempt to prevent a signicant rise
in spot prices as was the case after the
2007 earthquake, he said.
UQT clauses generally allow an LNG
buyer to take an additional 5-15% on
top of their contracted volume, accord-
ing to a producer. Tepco last exercised
its UQT clauses after the Kashiwazaki-
Kariwa nuclear complex was hit by an
earthquake in July 2007.
Spot LNG prices have usually been
well below long-term prices in Asia,
where term LNG contracts have tradi-
tionally been priced against oil. Many
term contracts in the past few years
have given a delivered LNG price in
$/MMBtu equivalent to about 15% of
the $ price per barrel for Japan custom-
cleared crude oil.
In 2010 Asian term LNG contracts
tended to produce a price of around $13/
MMBtu, while spot prices ranged from
$5.30/MMBtu to $10.10/MMBtu. But
spot prices are rising fast, with Platts
October JKM being assessed at a high of
$16.85/MMBtu on September 15.
The Japan LNG Cocktail (JLC) price
for Japans LNG imports has also been
heading north due to higher oil prices.
In January 2011, the JLC was $11.48/
MMBtu, increasing to $13.10/MMBtu
in April 2011, and rising further to
$16.07/MMBtu in July. Back in July
2010, the JLC had been $11.23/MMBtu.
Commenting on the LNG price
trends, John Harris from the Beijing of-
ce of the energy consultancy IHS Cera
has said that if you look at the impact
of a few high priced cargoes on the over-
all weighted average cost of supply it is
relatively small. Thus for major buyers
like Japan and Korea it is not likely that
demand will taper off, and the upper
limit would tend to be where oil red
generation would be competitive for
utilities. But there could be some resis-
tance from Chinese and Indian buyers
to further price gains, he said.
Regan has said that term prices are
heading up to $18/MMBtu plus as the
impact of $115-120/barrel crude lters
through, adding that buyers could try
to reduce their term liftings and buy
spot cargoes. If there is a rush back to
the spot market this will lead to a price
surge, Regan said.
The Arrival of Swaps
Meanwhile interest in LNG swaps
and short-term contracts priced off
spot LNG values has grown along with
the evolution of the spot market. This
5
10
15
20
25
Feb 09 May 09 Aug 09 Nov 09 Feb 10 May 10 Aug 10 Nov 10 Feb 11 May 11 Aug 11
($/MMBtu)
Japan Korea Marker US Henry Hub UK NBP Dated Brent
3. LNG, gas and oil price trends.
Source: Platts
liqueed natural gas
is seen as a natural progression as the
LNG spot market is attracting more
banks and trading houses, who would
take positions for cargoes.
The rst LNG swap deal based off
Platts JKM for delivered spot LNG car-
goes was executed in January 2011 by
Citibank. The swap was the equiva-
lent of a partial cargo and covered the
rst six months of 2011, according to a
source close to the matter, who added
that Citibank had concluded a further
ve swap deals based off the JKM by the
middle of 2011.
LNG is currently hedged through the
US and UK gas futures, and oil for Asia.
Oil hedging works for long-term Asian
LNG cargoes that are priced against the
JCC but for spot Asian LNG, gas and oil
hedging provides a poor correlation.
As the graph of US and UK gas fu-
tures and Platts JKM shows, over the
past year the premium of the JKM to
US gas futures increased from less than
$2/MMBtu to about $12/MMBtu. Over
the same period, the JKM was priced
above UK gas futures most of the times
but the premium could switch between
the JKM and NBP, highlighting the in-
dependence of the Atlantic and Asian
LNG markets.
As previously noted, long-term LNG
contracts in Asia are currently linked to
oil prices, resulting in a disconnect be-
tween spot and term LNG prices in the
region. This meant that term LNG pric-
es in Asia during 2010 averaged $13/
MMBtu, whereas spot prices ranged
from $5.30/MMBtu to $10.10/MMBtu.
A comparison of Platts JKM spot
monthly average values against Japans
average LNG import price from early
2009 through July 2011 shows that the
countrys term cargoes are generally
priced almost $4/MMBtu higher than
spot shipments, although this halved
after the March 11 disaster. But to date
neither buyers nor sellers have voiced
strong support for a shift away from oil-
linked prices for term LNG contracts, as
Asias spot LNG market is not as devel-
oped as Europes gas markets and there
are no other LNG derivatives apart from
the LNG swaps priced off Platts JKM.
Asian long-term LNG contracts are
fairly restrictive, with contract volume
exibility normally limited to 5%. Car-
go diversions are also restricted as they
normally involve multiple parties and
require all to reach a consensus before a
shipment can be diverted from its origi-
nal destination.
The regions long-term LNG contracts
specify source terminals, restricting
producers to providing cargoes from a
pre-determined liquefaction facility.
This eliminates the exibility of taking
a shipment from a portfolio of produc-
tion facilities, even if the suppliers orig-
inal LNG plant has production issues.
Price negotiations are also relatively
infrequent, with buyers and sellers
locked into price formulas over the 20-
or 30-year duration of the contract.
However, Asias utilities appear to
be shifting in favor of greater exibil-
ity in their LNG portfolios, partly be-
cause of the unpredictable impact on
2
4
6
8
10
12
14
16
18
3/09 5/09 7/09 9/09 11/09 1/10 3/10 5/10 7/10 9/10 11/10 1/11 3/11 5/11 7/11
($/MMBtu)
JKM spot monthly average (against delivery)
Japan average import price
4. Term vs spot LNG prices.
Source: Platts
liqueed natural gas
gas demand of extreme temperatures in
some recent summers and winters. For
instance, very cold weather from late
2009 through the rst quarter of 2010
forced South Korean and Chinese buy-
ers to scramble to secure a combined 45
spot LNG cargoes.
There is some evidence that LNG buy-
ers are accepting relatively high prices
in long-term contracts in exchange for
increased exibility. Utilities across
north AsiaJapans Kansai Electric,
China National Offshore Oil Corpora-
tion, South Koreas Kogas and Taiwans
CPC Corporation among othershave
also taken equity stakes in upstream
LNG projects such as Australias Gor-
gon and Curtis to give them additional
supplies and leverage.
In September 2010, Japans Chubu
Electric Power Company agreed to buy
1 million mt/year of LNG from the 2
million mt/year Donggi Senoro LNG
project in Indonesia. The contract terms
agreed by Chubu Electric include the
option of 100% destination exibility.
And in an attempt to increase their
supply exibility, several Japanese utili-
ties have said that, where economically
justied, they would seek to purchase
more spot cargoes while exercising the
downward quantity tolerance clause in
their long-term contracts. A DQT clause
in a long-term LNG contract allows
buyers to reduce the number of lifted
cargoes by 5-10%.
Behind many of these developments is
a simple factgas is seen by an increas-
ing number of Asian governments and
utilities as central to their plans to se-
cure their energy future on a sustainable
basis. Asian gas demand is thus rising
fast, with much of the demand needing
to be met by internationally-traded fuel.
At the same time supplying the fuel
in the best way requires the adoption
of increasingly complex strategies and
mechanisms by both governments
and companies. Asian LNG demand is
growing fast and a once-rigid industry
is having to evolve faster to meet that
demand in an optimal manner.
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As US and European renewable en-

ergy markets mature and government
support becomes more uncertain, Asian
countries are laying plans to spark ma-
jor growth in both renewables genera-
tion and technology production.
The developments form part of a con-
tinuing shift in the global renewables
industry from West to East, as China
makes its bid to become the worlds re-
newable energy leader, with India in
hot pursuit.
Over the past two years the focal
point of renewable energy generation
and manufacturing has moved more
and more from European Union and
US markets to new opportunities in
Asia. While America and EU coun-
tries such as Germany and Denmark
remain powerful players in clean-en-
ergy markets, nations like the Czech
Republic, Italy and Spain have slashed
their feed-in tariffs for renewable en-
ergy generationin Spain, with ret-
roactive cuts to previously promised
solar feed-in tariffs.
In response, Asian countries are mov-
ing swiftly to ll the void. China is now
setting the pace in solar photovoltaics
(PV) production, while India has estab-
lished ambitious goals for solar and bio-
mass energy production.
While these two Asian economic gi-
ants jockey for position in the global re-
newables race, dark horses like Bangla-
desh and the Philippines are emerging
as they see the potential benets of us-
ing renewable energy and manufactur-
ing the equipment needed for its use.
China in the Lead
A September 2011 study by Standard
& Poors (S&P) noted that capital costs
for wind turbines and solar panels have
plummeted in recent years. Manu-
facturers several years ago geared up
production of PV equipment in antici-
pation of soaring demand that never
materialized following the 2008 nan-
cial crisis and the continuing weakness
of the global economy.
The primary source of these price
declines has been Chinese manufac-
turers that have enormously expand-
ed global capacity and that continue
to fully utilize their plants despite
lack of demand, said S&P, which, like
Platts, is a subsidiary of the McGraw-
Hill Companies, Inc.
The result is swollen inventories
among solar PV equipment producers,
particularly in China. Global capacity
of about 30 GW in 2011 will far out-
strip expected demand of 15 GW to
20 GW, according to the study, Regu-
latory and Political Headwinds May Slow
Renewable Energy Growth, which also
noted that Chinese PV companies now
require large and growing amounts of
working capital.
To date, Chinas banks have largely
nanced this buildup through almost
zero-cost debt. This is being used by
Chinese solar companies to achieve
economies of scale, to offer extended
credit terms to customers to augment
their already industry-leading cost po-
sitions, and to gain market share, the
study said.
renewables
Renewables Industry
Continues Shift to Asia
David R. Jones, Editor, Platts Renewable Energy Markets
renewables
Despite worldwide PV oversupply,
domestic markets will help to sustain
Chinese PV manufacturers in the com-
ing years. The country plans to have 10
GW of installed capacity by 2015, ac-
cording to Liang Zhipeng, the deputy
director general of the Department of
Renewable and New Energy at Chinas
National Energy Administration.
Though it holds a less dominant posi-
tion in the wind equipment manufac-
turing industry, China has taken the
global lead in wind capacity. According
to the Global Wind Energy Council,
China surpassed the US in 2010 when
its installed capacity reached 42.3 GW.
This followed a doubling every year in
Chinas total installed wind capacity
between 2006 and 2009.
Yet grid connections for wind farms
lag far behind construction, particularly
in isolated regions like Inner Mongolia,
as the state-owned grid companies have
struggled to integrate wind energy into
Chinas electric power infrastructure.
China has succeeded in attracting for-
eign wind-equipment companies like
Denmarks Vestas and Spains Gamesa
to set up shop, joining domestic manu-
facturers such as Sinovel, Goldwind,
UnitedPower and Dongfang Electric.
However, while ve Chinese companies
rank among the worlds top 10 wind
manufacturing companies, they trail
behind their US and European counter-
parts in producing the 3-MW to 5-MW
and larger wind turbines which are ex-
pected to power the anticipated boom
in offshore wind development.
India on the Move
India ranks a distant second to China
in the Asian renewables market but is
undertaking several major policy initia-
tives to build its clean-energy capacity.
Its agship program is the Jawahar-
lal Nehru National Solar Mission, also
known as Solar India, which is target-
ing the construction of 20 GW of on-
and off-grid solar thermal and PV ca-
pacity by 2022.
The program seeks to exploit In-
dias plentiful sunshine. A Rabobank
analysis has noted that the nation has
about 300 sunny days a year, and that
the potential of solar energy indus-
try is huge.
The National Solar Mission antici-
pates PV projects will achieve grid
parity by 2022 and parity with coal-
based thermal power by 2030. But it
recognizes that this cost trajectory
will depend upon the scale of global
deployment and technology devel-
opment and transfer, according to a
program summary.
The rst phase of the National Solar
Mission, currently underway, will run
to 2013, when installation of 1,300 MW
of capacity is anticipated. Within this,
about 300 MW spread over 37 projects
out of the 620 MW of grid-connected
capacity allotted to investors in the rst
phase is expected to begin operating by
the end of 2012.
But Rabobank cites several pitfalls
that could hinder solar energy de-
velopment in India. These include
local-content requirements, which
1
2
3
4
5
($ billion)
Q2-11 Q4-10 Q2-10 Q4-09 Q2-09 Q4-08 Q2-08
1. US-listed Chinese panel manufacturers: receivables and inventory less payable.
Source: Credit Suisee Solar Snippet, Aug 28, 2011, by Satya Kumar and Brandon Heiken
Copyright 2011 by Standard & Poors Financial Services LLC (S&P), a subsidiary of The McGraw-Hill Companies, Inc
renewables
it warns could produce high solar
module prices.
Like China, India has become a ma-
jor center of wind equipment produc-
tion, drawing such foreign companies
as Gamesa, GE, Vestas and WinWinD.
However, the domestic company Su-
zlon remains the largest Indian wind
turbine manufacturer, with about a
50% market share.
In addition, India has launched a
national biomass program modeled
on the Solar India initiative. The bio-
energy program is designed to provide
a policy and regulatory framework to
offer a predictable incentive structure
for rapid and large-scale capital invest-
ments in biomass-fueled power genera-
tion, according to New and Renewable
Energy Minister Farooq Abdullah.
Abdullah noted that the aim is also
to encourage development of rural en-
terprises for project development and
sustainable operation of bio-energy sys-
tems. And the minister, who estimated
that Indias surplus biomass could pro-
duce 16 GW of electricity, said one of
the bio-energy missions rst initiatives
would be to set up dedicated energy
plantations on degraded wastelands.
India currently has 2,664 MW of
biomass-red power generation capac-
ity. But biomass energy developers are
facing challenges because of the ris-
ing cost of biomass materialseven
though most state regulatory authori-
ties refuse to allow them to increase
their sales prices.
In contrast to China, Indias federal
government structure gives substantial
authority to state governments to forge
their own renewables policies. The
southern state of Tamil Nadu, for ex-
ample, has committed to build 5 GW of
wind energy and 3 GW of solar energy
capacity over the next ve years.
Japan at the Crossroads
A renewable energy bill several years
in the making nally passed the Japa-
nese Diet, or parliament, in late August.
Its importance was indicated by the fact
that Naoto Kan postponed his resigna-
tion as prime minister and head of the
Democratic Party of Japan (DPJ) until
immediately after its passage.
The DPJ took ofce in August 2009,
ending decades of rule by the conserva-
tive Liberal Democratic Party and vow-
ing to enact a comprehensive feed-in
tariff for renewable energy.
The new law creates a broad feed-
in tariff for renewable energy. It also
waives the feed-in surcharge for about
three-quarters of Japans intensive-en-
ergy users, according to media reports,
mirroring similar waivers in countries
such as Germany with feed-in tariffs
for renewable energy.
It remains uncertain, however,
whether the new law will attract inves-
tors from overseas, as China and India
have done. Also still unclear is what
role renewable energy will play as Ja-
pan rebuilds its energy infrastructure
following the March 11 tsunami and
earthquake.
Frost & Sullivan analyst Roberta Gam-
ble said the disaster could lead to oppor-
tunities in Japan for growth in on-site
power, or distributed generation, which
can favor renewable use. She noted that
major power interruptions are one of
the biggest drivers for DG in the US,
though these on-site plants tend to be
small generators designed to ll imme-
diate gaps in power supplies.
Gamble said, however, that a na-
tional catastrophe can also mobilize
societies and governments to demand
different power solutions. She added
that the country may expect to see
increased government policy and de-
mand toward more distributed sources
of electricity that can help rebuild the
countrys power system and economy.
Australasian Trends
Australia, though a leading indus-
trialized Asia Pacic nation, has been
slow to take up renewable energy,
hindered for years by governments
India currently has 2,664 MW of biomass-red
power generation capacity. But biomass energy
developers are facing challenges because of
the rising cost of biomass materials ...
renewables
that refused to enact strong laws pro-
moting renewables. However, this has
begun to change as successive Labor
governments have pledged to create
markets for carbon-emissions trading
and boost funding for renewable re-
source development.
Though the previous administration
led by Kevin Rudd fell after failing to
secure parliamentary agreement on a
carbon-trading bill, new Labour Prime
Minister Julia Gillard has won narrow
support for the bills in both houses,
thanks to deals done with the Austra-
lian Greens and independent members
of parliament.
The government proposals would
place an A$23/metric ton ($23.6/mt)
tax on CO
2
emissions starting July 1,
2012. Draft legislation for the package
of measures, which includes initiatives
that would provide some $13.3 billion
of federal funds for the renewable en-
ergy sector, was released in late July.
The government is aiming to get
the carbon legislation passed through
both houses of parliament by the end
of 2011. But local mining and resources
companies have formed the Austra-
lian Trade and Industry Alliance and
launched an intensive lobbying and
advertising campaign against the legis-
lation, warning the measure threatens
job losses, higher prices for consumers
and lost business opportunities.
New Zealand has for years worked to
expand its clean-energy production,
and renewables production has won
support from governments of various
hues. In the most recent energy strat-
egy, issued in September 2011, the gov-
ernment afrmed its commitment to
renewable energy, calling it a key area
of the countrys energy strategy.
The country currently generates near-
ly three-quarters of its electricity from
renewables, including large hydroelec-
tric plants. The government has set the
target of securing 90% of national elec-
tricity supplies from renewable energy
sources by 2015.
Renewable energy developers also
stand to benet from a government
directive issued in April 2011 that re-
quires local and regional authorities
to promote renewable energy in their
development plans and planning deci-
sions. The National Policy Statement
for Renewable Energy Generation 2011
will drive a consistent approach to
planning for renewable energy genera-
tion in New Zealand by giving clear
government direction on the benets
of renewable energy generation and re-
quiring all local councils to make pro-
vision for it in their plans, according
to a statement from the Ministry for
the Environment.
Emerging Markets
Several other Asian countries are be-
ginning to claim a stake in the renew-
able energy industry by establishing
renewable energy policies designed to
give investors condence in new mar-
kets. For instance, the Philippines gov-
ernment, which issued a long-awaited
National Renewable Energy Program
(NREP) in June 2011, intends to boost
its geothermal capacity by 75% and hy-
droelectric capacity by 160% by 2030.
The Philippines Department of En-
ergy said that it also plans to add 2,345
MW of wind, 284 MW of solar and 277
MW of biomass-red capacity. Among
the projected milestones, solar power is
expected to reach grid parity by 2020
and wind energy by 2025, while the
government expects to have a con-
centrated solar thermal demonstration
plant operating by 2015 and its rst
ocean energy facility on stream three
years later.
As an archipelago comprising 7,107 is-
lands2,880 of which are inhabited
the Philippines relies on imported coal
and oil for half its electricity, according
to the Renewable Energy and Energy
Efciency Partnership. The fragmented
geography makes power transmission
across vast distances difcult, and the
countrys three main grids have regular-
ly suffered from the threat of blackouts.
Yet this lack of centralized power
transmission also makes the Philippines
a prime candidate for distributed genera-
tion, including small wind and hydro-
electric plants and solar energy. Aggres-
sive renewable energy development will
be balanced with the need to provide
adequate, reliable and high-quality pow-
er. It bears emphasis that while efforts
to facilitate [renewable energy] into the
grid shall continue to be intensied, the
stability of the grid shall be ensured as
well, according to the NREP.
The government expects big pay-
backs from renewables expansion, not
just from savings by cutting the fossil
fuel imports on which the country cur-
rently relies, but also the employment
opportunities that will be generated
by increased economic activities with
more intensive private sector invest-
ments in the sector, the program said.
Meanwhile Bangladeshwhich like
neighboring India has some of the
worlds best solar resourcesis develop-
ing national policies to secure renew-
ables investments. It has for the rst
time set a specic target for renewable
power generation by 2015.
The government is looking to pro-
duce 500 MW of electricity from the
various renewable energy sources
about ten times the countrys current
generation from renewables, according
to Finance Minister Abul Maal Abdul
Muhith. Parliament approved the plans
as part of the passage of the countrys
national budget in June 2011.
Bangladeshs renewable energy capac-
ity currently totals 55 MW. Under the
strategy established by the Power Min-
istry, 200 MW will be generated from
solar PV, 200 MW from wind, 45 MW
from biomass, 45 MW from biogas and
15 MW from other sources by 2015.
Changing Perceptions
The developments in the Philip-
pines and Bangladesh are pointers to
the growing perception of the poten-
tial benets of renewable energy across
Asia. Both countries suffer frequent
energy blackouts, are experiencing
rapid growth in energy demand, and
import a substantial amount of their
energy needs. In this context renew-
able energy offers a way of meeting the
burgeoning growth in energy require-
ments while at the same time bolster-
ing energy security.
Whats more, renewablesparticu-
larly off-grid, mini-grid and distrib-
uted generation applications like solar
PV and small wind turbinescan help
tackle the challenge of energy poverty.
This is true not only in countries like
the Philippines and Bangladesh with
low per-capita income, but also in rap-
idly-industrializing countries, such as
China and India, which face growing
gaps between rich and poor.
As new perceptions and perspectives
emerge about the value of renewable
energy, old stereotypes are falling by
the wayside. For example, while na-
tions like India and China often have
lower manufacturing costs than those
in North America and Europe, cheap
production is no longer necessarily the
deciding factor in business decisions on
producing clean-energy technology.
Thus Germanys SolarWorld report-
ed in June 2011 that it had sold its
joint venture production site in South
Korea to concentrate on PV production
in the US and Germany. It plans to
supply PV technology to the growing
Asian market out of the plants in the
US and Germany.
SolarWorld said it is pulling out of
South Korea to focus on production
locations with the highest-quality en-
vironmental and social standards. The
company noted that allegedly lower
wage costs in Asia are not a crucial
cost factor because these account for
less than 10% of product costs, add-
ing that the cost of transport from Asia
to Europe and the United States is sub-
stantially higher than in the opposite
direction, in which international con-
tainer vessels frequently travel empty.
So the increasing globalization of the
fast-moving and dynamic renewables
industry will not necessarily always be
a one-way street. But that said, there is
no doubt that the key trend is the con-
tinuing shift in renewable equipment
manufacturing and installation of new
capacity away from the US and Europe
to Asia.
As new perceptions and perspectives emerge
about the value of renewable energy, old
stereotypes are falling by the wayside.
renewables
The March 11 earthquake and tsuna-
mi in Japan, and the resultant disaster
at the Fukushima-1 nuclear plant, have
had far-reaching consequences. The
disaster not only devastated Japans
nuclear industry but also reshaped the
nuclear landscape in Europe and North
America, decimating industries in
countries with good safety records and
negligible seismic risk.
And yet in the much nearer econo-
mies of Asia, the aftershocks have been
muted. Within days of the disaster,
most countries operating or planning
to build reactors had reafrmed their
programs, albeit with caveats and plans
to review safety measures and emergen-
cy procedures.
This is not to deny that Fukushima
has had a substantial regional impact,
with nuclear power facing increased lo-
cal and environmentalist opposition in
many countries. Nor is it to suggest that
nuclear power in Asia is in any sense
monolithiceach national program
has very specic characteristics.
But for the most part the local and en-
vironmentalist opposition has built on
existing antipathy to the technology.
And it is hard to resist the conclusion
that, while individual national nuclear
programs may differ signicantly, in
most regional jurisdictions Fukushima
has been conscripted to promote exist-
ing political and policy agendas, rather
than reshaping the wider energy debate.
This article assesses nuclear prospects
in some key Asian markets against this
background. But rst it asks why the
continent seems so wedded to nuclear
power because, to paraphrase Voltaire, it
at times seems that if nuclear power did
not exist, Asia would have to invent it.
The Asian Nuclear Fit
In many Asian economies electricity
demand has been growing rapidly, at
least until very recently and certainly
compared with European and North
American levels. With much of the
growth coming from the industrial sec-
tor, which generally displays limited di-
urnal and seasonal changes in demand,
there is thus a need for substantial ad-
ditional baseload capacity, for which
nuclear reactors are ideal.
The need is exacerbated by the fact
that there are few electricity intercon-
nections between Asian countries,
and in cases within them. Achieving
optimal power ows and avoiding the
duplication of capacity by cross-bor-
der electricity trading is not possible,
meaning that to ensure secure energy
supplies each country needs a balanced
and diversied generating portfolio, in-
cluding baseload plant.
Nuclear plants do have disadvantag-
esbuilding each megawatt is more
expensive and takes far longer than
nuclear
Asian Nuclear Power
Balancing Risk
and Security
Martin Daniel, Editor, Platts Power In Asia
nuclear
building gas, oil or coal-red plants.
But their big advantage is that, once
operational, reactor fuel costs are much
lower in absolute and percentage terms.
Put simply, building reactors avoids re-
liance on the fossil fuels whose prices
and volatility have been rising sharply
in recent years.
This is especially pertinent in the large
number of Asian countries which are re-
liant, and increasingly so, on imported
fossil fuels. Buying moreand more
expensiveinternationally-traded fuel
has substantial foreign exchange as well
as security of supply implications.
Moreover, the increasing bill for fossil
fuels has had a massive impact on gen-
erator and utility balance sheets across
Asia in recent years. Electricity tariffs
in much of Asia remain regulated by
the state at the wholesale and especial-
ly retail level, with no automatic pass
through of fuel costs and no guarantee
of full or timely tariff increases. And
with the current macroeconomic con-
cern in much of Asia being the control
of ination, tariff adjustments by the
state have been both meager and tardy,
leaving power companies in the red or
reliant on state subsidies.
In this context, nuclear plants, whose
fuel costs form a small and to date gen-
erally less volatile component of overall
costs than fossil-red plants, are an at-
tractive prospect for beleaguered power
companies and state coffers. And for
governments, which tend to be adverse
to ceding control to market signals, a
heavily-regulated technology has po-
litical attractions as well.
These various factors favoring nuclear
are not likely to go away soon. Much of
Asia is on a long-term growth trajecto-
ry, large swathes of the continents elec-
tricity market will remain a patchwork
of national systems for a while to come,
the consumption and import of fossil
fuel is an increasing trend, and, largely
for the foregoing reasons, the shift from
an electricity supply industry based on
regulation to reliance on market signals
is at regional level proving a slow and
inconsistent process.
Nor are the attractions of nuclear pow-
er limited to rapidly-growing economies
or the search for secure electricity sup-
plies. For those of Asias more mature
economies with established domestic
nuclear programs, the export of nuclear
equipment and expertise can represent
a signicant business opportunity.
Japan
One country on which Fukushima
has had an obvious impact is Japan.
Prior to the disaster the countrys 54
nuclear reactors with 47,500 megawatts
(MW) of capacity accounted for around
30% of national electricity output. And
nuclear power was seen as central to
the countrys future energy mix, with
reactors projected to provide 50% of
total electricity supplies in 2030. By
then, it was planned that 14 new reac-
tors would have entered operation, of
which 12 were under construction or
active development in early 2011.
Few if any of the proposed plants are
now expected to enter service, while
the eet of operating nuclear plants
has been heavily depleted. Plants still
out of action as a result of the July 2007
earthquake have been joined by those
reactors at Fukushima-1 which will
denitely close because of the disaster,
as well as other nuclear plants at least
temporarily affected by the earthquake
and tsunami.
On top of that, all but one of the reac-
tors closed for scheduled maintenance
at the time of the disaster or since re-
main idle as a result of the need to com-
ply with stringent central government
stress tests and because of local authori-
ties reluctance to approve restarts. With
neither of these constraints likely to ease
soon, and with national regulations re-
quiring that all reactors must carry out
scheduled maintenance at least once ev-
ery 13 months, there is concern that by
April or May 2012 Japan may have no
nuclear output for the rst time since
1966. In mid September only 11 of the
theoretical stock of 54 operating reac-
tors were actually in service.
While output from at least some exist-
ing nuclear plants may be expected to re-
sume at some stage in the near to medi-
um term, the long-term prognostication
for atomic energy production in Japan is
nuclear
not good. New Prime Minister Yoshihiko
Noda said in early September that, once
existing reactors had reached the end of
their lives, the countrys nuclear capacity
could be eliminated since he saw little
prospect of new reactors being built.
This position may of course change as
time passes. Noda is less negative about
nuclear prospects than his predecessor,
Naoto Kan, and on September 13 he re-
fused to rule out any long-term future
role for nuclear power. While energy
conservation plus new and renewable
resources have been mooted as the key
replacements for Japanese nuclear out-
put, there appears to be little chance
that atomic power can be scrapped
without much-increased reliance on
imported fossil fuels.
Renewed support for domestic nu-
clear projects could also be pushed by
the importance of nuclear technology
exports to Japanese companies. The
national growth strategy formulated in
2010 identied nuclear exports as one
of the mainstays of future economic
growth, and exporters have already
complained about being disadvantaged
by inconsistent and negative govern-
ment policies.
South Korea
South Korean enterprises are among
those hoping to pick up overseas con-
tracts at the expense of Japanese com-
panies. They also appear to have the
advantage of relatively limited opposi-
tion to the countrys domestic nuclear
program, with one post-Fukushima
opinion poll showing strong support
for retaining the nuclear option.
This is not to say that there is no op-
position or that it is not growing. In
a June 2011 ling with the US Securi-
ties and Exchange Commission, the
state-controlled Korea Electric Power
Corporation (Kepco), whose subsidiary
KHNP operates the countrys nuclear
plants, acknowledged that in recent
years, we have encountered increasing
social and political opposition to the
construction and operation of nuclear
generation units.
Kepco also said in a detailed analysis
of the gamut of risks it faces that the
Fukushima disaster would add to pub-
lic and regulatory scrutiny, and require
additional safety appraisals and inspec-
tions. This meant that KHNP is ex-
pected to incur additional compliance
costs and capital expenditures, it said.
But Kepco added that nuclear power
has a stable cost structure [and] is least
costly among the fuel types used by
our generating subsidiaries. At 31.3%,
it was the second largest contributor of
grid electricity supplies in 2010 after
the 43.6% provided by coaland this
in a context where the rst risk cited by
Kepco was increased fossil fuel prices in
a regulatory system where the utility
cannot automatically pass on the addi-
tional cost through higher tariffs.
Nuclear power is thus seen as criti-
cal by Kepco, which through KHNP
owns 21 reactors with 18,716 MW of
capacity. It also has seven reactors with
8,600 MW of capacity under construc-
tion for operation from 2017, as part of
the 17,200 MW of nuclear capacity at
13 sites planned for operation between
2011 and 2024.
Nuclear power is equally important for
the government, both for domestic se-
curity and overseas trade reasons. With
successes already chalked up in countries
such as the United Arab Emirates, but set-
backs in tenders in Vietnam and Turkey,
the Ministry of Strategy and Finance is
setting up a one-stop shop to coordinate
the supply of equipment, services and -
nance for overseas nuclear ventures.
China
China hosts the largest nuclear de-
velopment program in Asia and indeed
the world. The State Council respond-
ed to the Fukushima disaster on March
16 by suspending the approval of fur-
ther nuclear power projects until new
safety plans are in place, and requir-
ing checks on operational, construct-
ing and approved reactors. Checks on
operating plants were completed in
mid 2011, with the inspections of con-
China hosts the largest nuclear development
program in Asia and indeed the world.
nuclear
structing plants nearing completion in
September 2011.
The suspension of unapproved proj-
ects will not have an immediate impact
on Chinas nuclear program, given the
number of projects that have already
been approved and started construc-
tion. It does, however, chime with ex-
isting central government concerns
about the uncontrolled promotion of
reactors at local level.
In January 2011, the State Council
Research Ofce had expressed caution
about unrestrained provincial enthu-
siasm for nuclear projects. It said the
2020 target for nuclear capacity should
be restricted to 70,000 MW to avoid
problems relating to safety, quality con-
trol and insufciently trained person-
nel. It also said that there should be a
concerted move to the use of third-gen-
eration technology, and expressed con-
cern about the large number of second-
generation CPR1000 units which were
under construction or on order.
Concerns were also expressed about
the numerous projects planned in less-
developed inland provinces. And the
report reasserted the 2007 policy that
only three state-owned generators the
China National Nuclear Corporation,
China Guangdong National Power Cor-
poration and China Power Investment
Corporationmay have controlling
stakes in and operate nuclear plants.
With 14 operational reactors with
11,271 MW of capacity at August 2011,
increasing mainland Chinese nuclear
capacity to 70,000 MW by 2020 will
be a major but not unachievable effort.
Some 27 reactors with 29,930 MW of
capacity were under construction in
September 2011, with a further 51 reac-
tors with 58,770 MW of capacity then
listed as rmly planned by the World
Nuclear Association.
Beyond that there is a further
tranche of proposed capacity. The 150
or so proposed reactors together have
154,000 MW of capacity, meaning that
China hosts more than 240 identied
projects with around 254,000 MW of
proposed, planned, constructing and
operational capacity.
Ofcial plans say that about 200,000
MW of this capacity will be operational
by 2030, while by 2050 the government
target is for up to 500,000 MW of ca-
pacity. By 2100, about 1,400,000 MW
of nuclear plant is envisaged.
Relative to other countries this is a
very large and ambitious program. But
in the context of Chinas double-digit
electricity demand growth, and proven
ability to expand its stock of generating
capacity, it does not appear unattainable.
Chinese generating capacity increased
by 10.1% on year in 2010, according to
the Chinese Electricity Council, with
operational plant rising from 874,070
MW at the end of 2009 to 962,000 MW
on December 31, 2010. After taking
into account plant decommissioning,
the country commissioned more than
90,000 MW of capacity during the year.
In this context, building up to 7,000
MW of nuclear plant a year to 2020 and
10,000 MW a year to 2050 cannot be
seen as overly ambitious, with the Fuku-
shima disaster unlikely to have a long-
term impact on Chinas nuclear growth.
But the disaster has reinforced central
government concerns about the technol-
ogy, ownership and geographic spread
of future Chinese nuclear capacity, and
it may be expected that new approvals
will be selective in these respects.
India
The Indian government responded
to the Fukushima disaster in near re-
cord time, with ofcials saying within
a week that its nuclear program had
been recently reviewed and was funda-
mentally safe. Additional tests will be
carried out, and a Nuclear Safety and
Regulatory Authority is being set up to
address concerns that the Department
of Atomic Energy both regulates and
operates nuclear plants, but the mes-
sage from Prime Minister Manmohan
Singh down has been that it is business
as usual for nuclear power.
New Delhis deep commitment to
nuclear power is understandable in a
country where power demand is surg-
ing, national electrication and grid
integration programs are far from com-
plete, many hydroelectric projects are
the subject of intense local, environ-
nuclear
mentalist and religious concerns, and
indigenous coal and gas production
the source of most Indian electricity
outputis failing to keep pace with tar-
geted output for commercial and other
reasons. While solar and other renew-
able energy resources offer some respite,
energy planners see no alternative to
closing the ever-widening projected gap
in demand than fswith either imported
fossil fuels or nuclear power.
Nuclear power has a further political
cachet in a country which, until 2008,
had been denied access to interna-
tional nuclear fuel and technology for
more than forty years. Renewed access
to imported nuclear plant to comple-
ment its longstanding but slow-grow-
ing indigenous nuclear program is the
basis for the planned step change in
installed Indian nuclear capacity over
coming decades.
Operational Indian nuclear capac-
ity comprises 4,385 MW at 20 reac-
tors. The gure is planned to jump to
62,000 MW by 2032.
But while Singhs administration
remains committed to fast nuclear
growth, the program is running into
problems. Many of the planned nuclear
projects face strong local opposition.
Notable is the 10,000-MW Russian-
equipped nuclear park proposed at Har-
ipur in West Bengal state. The new state
administration led by Mamata Banerjee
promised to scrap the project ahead of
its landslide victory in May 2011, and
conrmed its decision in August 2011.
The six 1,650-MW reactors planned
at Jaitapur in Maharashtra state also
face strong local opposition. So too does
the 10,000-MW nuclear park planned
at Kovvada in Andhra Pradesh, whose
state government is also back pedaling
on the project.
Much of the opposition relates to local
land and employment issues rather than
more general concerns about nuclear
safety, although Fukushima has proved a
useful weapon in mobilizing opposition.
And projects based on imported plant
appear to be bearing a disproportionate
share of the opposition in an industry
where a vociferous lobby favors priori-
tizing the development of indigenous,
eventually thorium-fueled reactors.
Imported reactor projects have also
been hit by vendor concerns about the
stringent supplier liability and compen-
sation requirements included in legisla-
tion approved by the Indian parliament
in October 2010. And all nuclear proj-
ects face nancial constraints resulting
in large part from the monopoly state
ownership of nuclear projects through
the Nuclear Power Corporation of India
Limited and other central government-
owned entities.
The upshot is that, with only ve reac-
tors with 3,900 MW of capacity currently
under construction and 4,385 MW in op-
eration, achieving the massive proposed
growth in capacity may be difcult. But
while Fukushima may loom large in fu-
ture explanations for any shortfall in ca-
pacity, nancial, institutional, political
and local issues are the key constraints
for Indias nuclear program.
Bangladesh
The authorities in neighboring
Bangladesh have also had no second
thoughts about a nuclear program that
was rst proposed in 1961 but only took
off in 2007 after a succession of false
starts. Prime Minister Sheikh Hasina
said on March 20, 2011 that the coun-
try would not step back from the con-
struction of nuclear plants, while the
Bangladesh Atomic Energy Commis-
sions chairman, Farid Uddin Ahmed,
said Bangladesh is neither in an earth-
quake zone nor the [Rooppur] plant site
is prone to a tsunami.
The administration went on to ap-
prove the signing of an inter-govern-
mental agreement with Russia in August
2011. In the rst instance it is planned
that Russia will build two 1,000-MW
pressurized water reactors at Rooppur
in the Pabna region for operation from
2017, with Rosatom supplying the fuel,
taking back the spent fuel, helping with
nuclear waste management, and even-
tually decommissioning the plants.
With looming gas supply problems
and limited coal resources, nuclear is
seen by Dhaka as one of the best long-
term options for meeting the 8%/year
projected growth in electricity demand.
nuclear
Currently more than 80% of power is
produced from indigenous gas, but im-
ported oil, coal and gas will meet most
of the near to medium term growth in
a sector where 20,000 MW of new ca-
pacity is targeted by 2020.
Vietnam
Vietnams ambitious nuclear pro-
gram also barely faltered after the Fu-
kushima disaster. The program took
shape in the second half of the 2000s
as surging electricity demand required
diversication of the countrys electric-
ity supply options.
A power sector based on hydroelec-
tric plants up to the 1990s saw a shift
to gas-red generators from the late
1990s. The emphasis on gas then gave
way to a focus on building coal-fueled
plants in the current decade, but with
nuclear power and renewable energy
planned to take up much of the run-
ning from the 2020s.
The scale of anticipated electric-
ity growth is prodigious. The 10-year
power development plan approved by
the prime minister in July 2011 proj-
ects a near tripling of demand to 330
TWh by 2020 and, while most output
is projected to be from coal (46.8%),
gas (24.0%) and hydroelectric (19.6%)
plants, renewable (4.5%) and nuclear
(2.1%) sources are projected to start
making inroads.
One of the key milestones for nuclear
was the 2006 Power Development Plan,
which posited the construction of four
1,000-MW reactors in Ninh Thuan prov-
ince for operation from 2020. The Na-
tional Assembly approved the two-phase
project in November 2009, with Russia
and Japan being tapped in 2010 as coop-
eration partners for the 2,000-MW Ninh
Thuan-1 and Ninh Thuan-2 projects at
Phuoc Dinh and Vinh Hai, respectively.
The four reactors in Ninh Thuan are
due to be followed by more capacity
both there and elsewhere. By 2025 some
8,000 MW of capacity is planned at the
two Ninh Thuan sites, while by 2030
fourteen reactors with 15,000 to 16,000
MW of capacity are planned in Binh
Dinh, Phu Yen, Ha Tinh and Quang
Ngai provinces as well as Ninh Thuan.
Fukushima has had little impact on
the nuclear program in generalit was
conrmed on March 16or Vietnams
willingness to use Japanese technol-
ogy and resources. Thus Hitachi-GE
Nuclear Energy, Ltd and the Tokyo In-
stitute of Technology started their rst
course in human resource training
program for nuclear power projects in
July in Vietnam.
Conclusions
The full repercussions of the March 11
earthquake and tsunami on the Asian
nuclear power and energy sectors will
not become apparent for some time to
come. While Fukushima has become an
instantly recognizable word and potent
symbol, exactly what it symbolizes is the
subject of very different interpretations.
However, one thing is clear from the
various country accounts given here.
While Asia may in some respects nd
it difcult to live with nuclear power,
it is apparent that much of the region
cannot conceive of living without nu-
clear power.
TWh %
China 71.0 1.8
India 20.5 2.9
Japan 280.3 29.2
South Korea 141.9 32.2
Pakistan 2.6 2.6
World 2,630 13.8
1. Nuclear generation for selected countries and world in 2010, TWh and % of total output.
Source: World Nuclear Association (September 2011)
CCS has been seen as a likely
technology for deployment in Asia,
which has a large stock of existing
and planned coal-red plants, vast
resources of coal and an increasing
awareness of the need for cleaner en-
ergy production. For instance in late
September Xie Zhenhua, vice chair-
man of Chinas National Develop-
ment and Reform Commission, told
the fourth carbon sequestration lead-
ership forum in Beijing that CCS may
play a critical role in emissions reduc-
tion in the country, according to the
ofcial China Daily newspaper.
And the forum witnessed progress
on some projects with, for instance,
the state-owned generator Datang
and Frances Alstom agreeing a stra-
tegic partnership to jointly develop
two CCS demonstration projects by
2015. Alstom and Datang agreed
to develop a project equipped with
Alstoms oxy-firing carbon-capture
technology at a 350-megawatt coal-
fired plant at the Daqing oilfield in
Heilongjiang province, and another
project using unspecified carbon-
capture technology at a 1,000-MW
coal-fired plant at Dongying in
Shandong province.
But the problems facing CCS proj-
ects in Europe may indicate that its
acceptance and implementation in
Asia may not be that straightforward.
Indeed, there is already some evidence
for thisChina has only six CCS
projects at the planning stage against
the 270 that the International Energy
Agency says it should have by 2035 as
part of a global action plan, with Xie
acknowledging that CCS is a last re-
sort for China.
The economic malaise in Europe
and North Americatwo key markets
for CCS demonstrationhas capped
central plant investment and pushed
CCS down utility priority lists. As -
nancial crisis grips both continents,
the aim of building a signicant num-
ber of 300-MW-scale demonstration
plants by 2015/16 looks ambitious.
Bridging death valley thereafter to
achieve full commercial operation,
a preoccupation for many in the in-
dustry, is an even bigger leap that
ranks as one of Donald Rumsfelds
unknown unknowns.
The rate of policy development
has not helped, to the extent that in
July 2011 the European Commission
launched infringement procedures
carbon capture and storage
CCS in Europe: Filling
the Funding Void
Henry Edwardes-Evans, Managing Editor, Platts Power in Europe
Like many worthy but expensive emerging technologies,
carbon capture and storage is struggling to extricate itself from
events and step up to the pre-commercial demonstration level.
against 25 of the EUs 27 member
states for failure to transpose the EUs
2009 directive supporting carbon cap-
ture and storage.
The most serious case is Germany.
Despite the governments best efforts
to encourage new, low-carbon fossil-
red plant, parliament has now twice
rejected draft laws on carbon capture
and storage. While it remains to be
seen whether mediation can save
the latest billthrown out by the
Bundesrat, or upper house, on Sep-
tember 23developers say the bill
is unworkable anyway because it can
be reviewed in 2017 and requires the
proponent to shoulder a 30-year stor-
age liability.
In Germany as in many other EU
jurisdictions, environmentalists and
evidently many voters remain deeply
suspicious of storing carbon under-
ground. When projects do emerge
they face well-coordinated opposi-
tion from protesters who believe
these are big, bad coal plants dressed
in low-carbon clothing. While non-
governmental organizations are di-
vided on the merits of CCS, Green-
peace is against the use of public
money to support it, and has proved
a erce opponent of many new coal
plants in Europe.
This is problematic because three
of West Europes six foremost CCS
demonstration projects are linked
to large new-build power projects.
Permitting delays and reversals are
becoming commonplace for these
projectseven for some well into the
construction phase.
Never cheap at the best of times,
dozens of planned coal projects have
been set aside in favor of gas-red,
combined-cycle gas turbine plants
or investments in subsidized wind
and solar assets. Rightly or wrongly
this has reinforced the impression
that, in Europe at least, carbon cap-
ture is becoming less relevant as age-
ing coal-red plants close and the
replacement capacity is either zero
100
(Euro/MWh net)
REF
2015
Hardcoal - Europe Gas - Europe
2030 2015 2030
REF
CCS
CCS
90
80
70
60
50
49
+71%
+46%
+49%
+33%
50
73
65
55
43
42
84
40
30
20
10
Transport & Storage CCS/Coal REF Capex & Opex
CCS/Gas REF Capex & Opex Fuel Cost
1. The CCS cost equation.
Source: Alstom PCC
In Germany as in many other EU jurisdictions,
environmentalists and evidently many voters
remain deeply suspicious of storing carbon
underground. When projects do emerge they
face well-coordinated opposition from
protesters who believe these are big, bad
coal plants dressed in low-carbon clothing.
carbon (renewables) or relatively low
carbon (CCGT).
Underground Storage Issues
Regulatory risk, meanwhile, is prov-
ing equally challenging. The problems
are greatest where coal plants are in-
land with no convenient route to off-
shore store options.
Politically this has proved a hot po-
tato, with public perception in the
Netherlands and Germany particularly
negative. Consider the likelihood of
gaining the three levels of authoriza-
tion needed in Germany to build a CO
2

pipe to a geological formation in the
northwest of the country that involves
1,600 landowners from power station
site to storean example facing one
developer. Then, once a suitable stor-
age is identied, it could be lost at any
time to a renewables development un-
der German law.
But the real showstopper is cost. The
European Union, the US and Canada
are leading the way with public fund-
ing, with Canada lining up $2 billion,
the US $3.5 billion and the EU poten-
tially 4-5 billion ($5.4-6.7 billion) via
the auction of CO
2
allowances, having
already disbursed some 1.05 billion
through the European Economic Re-
covery Program.
Even with support from these EU
funds, however, European developers
say national governments must con-
tribute to the 1 billion-plus cost of a
300-MW demonstration project if they
are to be built.
If we only have these [EU] funds
Im not sure projects are going to go
ahead, Alstom Powers Joan Mac-
Naughton said at a Platts CCS confer-
ence held in London in 2011. Even in
the UK, where support was strongest,
we have a commitment to support
three more projects [beyond Longan-
net], but that funding is under re-
view, she said.
And the cost estimates are rising.
One developer told Platts that his
large continental demonstration proj-
ect was now estimated to cost 1.5
billion. At present he could expect
around 500 million from subsidies in
a best case scenario. This is not the
50/50 split weve looked for, he said.
Unless the utility can see a big pot
of gold at the end of this, it will not
invest in these conditions.
Project Status in Europe
To date in Europe only the UK and
the Netherlands have proposed signi-
cant funding for pre-commercial CCS
projects. The UKs intention to lead
the way in Europe was underlined by
its commitment to extend 1 billion
($1.54 billion) to a rst project award-
ed following a competitive bidding
processenough to cover the full cost
of a large demonstration project run-
ning for 10-15 years.
As noted, ScottishPowers existing
Longannet coal-red plant is lined up
to receive the funding. The CCS proj-
ect there is a joint venture between
ScottishPower, transmission company
National Grid and Anglo-Dutch en-
ergy company Shell, along with con-
tracting partners Aker Clean Carbon
and Accenture.
The 2,400-MW Longannet com-
plex in Scotland is the third largest
coal-fired power station in Europe.
ScottishPower is to be responsible for
retrofitting post combustion capture
and compression equipment, while
National Grid Carbon is responsible
for onshore transport and compres-
sion at St Fergus. Shell is responsible
for offshore transport and storage
for the project, which is expected to
capture and store 20 million metric
tons (mt) per year of CO
2
over a 10 to
15-year period.
In March 2010 Longannet, along
with E.ONs proposed Kingsnorth
Consider the likelihood of gaining the three
levels of authorization needed in Germany to
build a CO
2
pipe to a geological formation in the
northwest of the country that involves
1,600 landowners from power station site to
storean example facing one developer.
coal-red plant, were awarded un-
specied funding to support front end
engineering and design studies. The
studies were to be completed within
twelve months and then compete for
full funding. But in the event E.ON
withdrew Kingsnorth from the com-
petition, saying the economic cri-
sis had delayed the need for the new
plant. Environmental opposition to
Kingsnorth had been vociferous.
In the Netherlands, E.ON/Electra-
bels joint CCS project at Maasvlakte,
known as ROAD, is to receive 150 mil-
lion from the Dutch government over
2010-2019. This is additional to the
180 million that the European Com-
mission has put up over 2010-2014.
All is not plain sailing, however. In
January 2010, Greenpeace Nederland
placed a procedural obstacle in the
way of the project, with a Rotterdam
court agreeing that E.ONs construc-
tion license was wrongly issued. So
while the plant is in construction
and heading for a 2013 completion,
the developers continue to seek the
required permits.
ROADs demonstration phase aims to
capture 1.1 million mt/year of CO
2
and
transport it 20 kilometers (12 miles)
offshore for storage under the North
Sea. Cooperation with the Abu Dhabi
National Energy Company has been
agreed for this nal stage of the process.
Other pre-commercial CCS plans
to receive EU funds to date include
Vattenfalls Janschwalde project in
Germany, Enels Porto Tolle facility
in Italy and 2CO Energys Hatfield
project in the UK. All face hurdles
beyond the core question of cost, be
it access to storage in Germany, per-
mitting problems in Italy or insol-
vency in the case of Hatfields origi-
nal owner Powerfuel.
In April 2011, a draft CCS demon-
stration law agreed by the German
federal government allowed the trial
of a few CO
2
storage sites in the rst
phase, with a review in 2017. The law
foresees transfer of responsibility to
the state 30 years after a stores clo-
sure. As noted, this draft was reject-
ed by Germanys upper house in late
European CCS projects
based on NER300 applications
Thirteen CCS projects from across Europe have applied for
a share of funding from the so-called NER300 schemea
4.5 billion fund to support CCS and renewables projects
across the European Union. Seven countries applied for
funding for CCS projects.
The European Investment Bank is now evaluating the
projects, with a nal award decision expected from the
European Commission in the second half of 2012. Up to three
projects in each member state may be supported. The UK
alone has put in seven projects, with six other EU states
submitting one apiece.
Alstom Consortiums new Drax oxyfuel supercritical

power station, Yorkshire, UK.
C.GENs IGCC power station at Killingholme,

Yorkshire, UK.
ScottishPowers post-combustion capture project

at Longannet, Scotland,UK.
Peel Energys new supercritical coal-red power

station with pulverized coal combustion (PCC)
at Hunterston, Scotland, UK.
Don Valley Power Project (formerly Hateld) new

IGCC power station in Yorkshire, UK, already
awarded 180 million from the European Energy
Programme for Recovery (EEPR).
Progressive Energys consortium bid for a

pre-combustion coal gasication project in Teesside, UK.
Scottish & Southern Energys PPC retrot at an

existing CCGT power station at Peterhead, Scotland, UK.
Air Liquides Rotterdam-based hydrogen project

in the Netherlands.
Enels Porto Tolle PCC project in Italy, already

awarded 100 million from the EEPR.
ArcelorMittals capture project at its Florange

steelworks, northern France.
Vattenfalls Janschwalde project in Germany,

which has received 180 million from the EEPR
for an oxyfuel coal-based project.
PGEs amine-based CCS project at the Belchatow

power plant in Poland, which has received
180 million from the EEPR.
Termoelectricas Turceni power plant, in Romania,

which is planning a PCC facility with storage
in nearby aquifers.
September, with Vattenfall effectively
suspending its Janschwalde demon-
stration plant as a result. It is aston-
ishing how a technology with such
great potential both for climate pro-
tection and the industrial landscape
in Germany is treated here, the com-
pany said.
Vattenfall has run into similar
problems in the Netherlands, where
underground storage of CO
2
was
banned in February 2011 by the
government, blocking Vattenfall
subsidiary Nuons plans to store CO
2

from its Magnum power station in
the Groningen gas fields.
Vattenfall has been one of the lead-
ing European proponents of CCS with
pilot capture facilities at Schwarze
Pumpe, Buggenum and Ferrybridge.
It also has a hand in the CO
2
SINK re-
search project at Ketzin near Berlin,
where underground storage is being
tested in a saline aquifer.
But how many more expensive
setbacks Vattenfall can absorb be-
fore it draws back from CCS re-
mains to be seen. All its work was
to have led to the full demonstra-
tion of oxyfuel technology on the
new 250-MW lignite-fired unit at
Janschwalde, which is due online in
2015 and projected to capture 1.3
million mt/year of CO
2
. Together
with Verbundnetz Gas and Schlum-
berger, Vattenfall has been looking
at two promising underground stor-
age sites in Brandenburg some 150
km away. The storage capacity of
the two structures is estimated to be
more than 100 million mt.
Enel is another big utility pumping
its fair share of investment into CCS,
with a pilot project in Brindisi, Italy
and EU-backed plans for pre-commer-
cial demonstration projects at Porto
Tolle in Italy and Compostilla in
Spain. There is some light at the end
of the tunnel for Porto Tolle, an oil-
to-coal generating plant conversion
that appears to be making permitting
progress after erce legal challenges.
This is to be the site for post-combus-
tion capture of 810,000 cubic meters
per hour of CO
2
equivalent to 40%
of the emissions from one of three
660-MW units at the plantwhich
will be stored in a saline aquifer below
the Adriatic Sea.
And/Or Versus And/And
Environmental opposition to this
project encapsulates another danger
facing CCSthe belief that it is a
smokescreen for partisan interests,
and a drain on resources needed
elsewhere.
I go further than saying that CCS
would only have captured some of
the CO
2
from this plant, WWF Ita-
lias Mariagrazia Midulla told Platts
in May 2011 after Porto Tolle was
suspended by a court ruling. I say
that CCS is still a dream used to drive
attention away from the real pollu-
tion problems of a coal-red power
station. The future is in energy ef-
ciency and renewables.
The CCS lobby argues that the
technology is part of an and/and
future, where the world needs a
range of potential options including
renewables, efciency, new nuclear
reactors and carbon capture. Euro-
pean environmentalists argue that
in reality CCS is part of an and/or
scenariowith budgetary choices
being made at the policy stage and
with subsidized CCS developments
preempting funding for targets they
deem more deserving, such as re-
newables and efciency.
The EU is persuaded by the and/
and argument. It sees fossil-red
power stations as a global fact of life
for the foreseeable future and CCS as
a commercial opportunity for Euro-
pean equipment suppliers. The EU is
also persuaded by the carbon market,
and its ability to draw in low carbon
investment. In both cases Europe is
trying to lead a global drive to combat
climate change.
The question is, who is following?
Until other jurisdictions start to act
on climate change, and international
meetings start to deliver tangible com-
mitments, the struggle will continue
to raise funds for carbon capture and
storage.
November 2011 insight xx
L
E
A
D
E
R
S

P
R
O
F
I
L
E
SPECIAL ADVERTISING SECTION
Mr. Ari S. Hudaya graduated from Institut Teknolo-
gi Bandung in 1983, majoring in mechanical engineer-
ing. He has been serving as the president director
of PT Bumi Resources since 2001. He also holds the
positions of the CEO of Bumi plc and the president
commissioner of PT Energi Mega Persada Tbk. Since
May 2011, he has been appointed to be the president
director of PT Arutmin Indonesia and PT Kaltim
Prima Coal. Previously, he was the president director
of Enercorp, Ltd and director of PT Bakrie & Brothers
Tbk. He was born in Jakarta, on May 30, 1959.
PT Bumi Resources Tbk. is a leading natural re-
sources group, Indonesias largest thermal coal
producer and the worlds top coal exporter. It is Asias
fastest growing company. Bumi always strives to be a
world-class global operator in the energy and mining
sectors through the creation of value, prosperity and
opportunity.
Ari S. Hudaya of
PT Bumi Resources
Tbk
Ari S. Hudaya
CEO
PT Bumi Resources Tbk
The countrys swift move to becoming
a thermal coal importer caught many
market players by surprise in 2008, but
by the second half of 2011 even miners
in the United States were casting their
eyes over a lucrative market that could
help breathe life back into their indus-
try. So what lies ahead?
The boom in consumer goods such as
electronics and automobiles, prompted
in large part by the ever-increasing mi-
gration of people from rural to urban ar-
eas, has helped fuel Chinas double-digit
economic growth for year after year.
China should no longer be viewed solely
as a producer nation; it is fast becoming
a consumer society.
The urbanization of China has seen tra-
ditional three-generation family homes
break up, while the migration pattern
is no longer seasonal but permanent or
semi-permanent. Almost half of Chinas
1.35 billion people now live in an urban
environmenta sea-change from the
1990 level of about 26%resulting in a
housing boom in which each new apart-
ment is creating additional demand for
white goods and other consumer dura-
bles. And experts suggest this workforce
shift is unlikely to stop any time soon,
with forecasts of the urban population
in 2035 ranging from 60% to 70%.
The process has been powered by a
phenomenal growth in generating ca-
pacity that has still failed to keep pace
with demand. In July 2011, the China
Electricity Council (CEC) estimated
that national electricity shortages would
reach 25-30,000 MW in the coming
winter following summer shortages of
30-40,000 MW. The CEC projected that
electricity consumption will reach 4,700
TWh in 2011, up about 12% on year, af-
ter demand rose 12.2% on year to 2,251.5
TWh in the rst half of 2011.
Chinas national installed capacity
is expected to hit a headline-grabbing
1,050,000 MW by the end of 2011, up
from 962,190 MW in December 2010. Of
this 706,630 MW, or 73.4%, was fossil-
red, with the vast majority of the ther-
mal plant in turn being coal-red.
Although coal production is projected
to increase to about 3.5 billion metric
tons (mt) in 2011 compared with just over
a billion mt a decade ago, China cannot
coal
Feeding the Dragon:
China Fires Up
the Coal Market
James OConnell, Managing Editor, Platts Coal
Chinas rapidly-expanding stock of coal-red generating plant
has radically altered the traditional pattern of global coal trade
in the last three years, when for the rst time the North Asian
nation became a net importer of thermal coal.
coal
produce enough fuel to feed the 1,000
MW or so of coal-red capacity it is add-
ing to the grid each and every week. The
largest coal producer in the world is thus
fast becoming a major importer.
Chinas emergence as a major player
in both the international thermal and
coking coal markets has seen producers,
traders and other industry participants
scramble for a slice of the market. Net
thermal coal exports of 35 million mt in
2008 have switched to projected imports
of about 80 million mt in 2011, with the
shift placing additional demand on pro-
ducers like Australia and Indonesia.
Barclays Capital analysts said in an Au-
gust 2011 report that Chinese coal im-
ports hit a record high of 17.5 million mt
in July, up year-on-year by 34% topping
the previous record of 17.34 million mt
hit in December last year. They added
that the surge was powered by steam
coal imports, which hit a record of 9.8
million mt, while coking coal imports
though elevatedwere below all-time
highs, coming in at 4.05 million mt. The
increased imports were due to Chinese
consumers restocking during the hottest
season of the year.
The report pointed out a notable trend
long evident in the Indian marketplace.
Chinese imports in July have favored
low-quality coal as anthracite imports
have declined year-on-year and month-
on-month, resulting in the strength
in coal imports not being reected in
benchmark prices. Despite the opening
of the Chinese arbitrage window for Aus-
tralian coal, current Chinese/Newcastle
price differentials have yet to become
large enough to entice greater buying
interest as easing domestic thermal coal
prices and the availability of competi-
tively-priced Indonesian thermal coal
have contributed to a slower pull for
Australian thermal coal, it said.
Chinese coal imports currently have
to pay 17% VAT, restricting volumes sup-
plied from South Africa and even Austra-
lia. This is one of the reasons why China
is considering lowering VAT on coal im-
ports, according to Hao Xiangbin, di-
rector of the market department of the
China Coal Trade and Development As-
sociation (CCTDA).
Hao, who was quoted by Chinese state
media at the 2011 Coal, Coke and Steel
Industrial Chain Investment Forum held
in Beijing in late July, did not give de-
tails about the possible cut in VAT. But
an analyst with the Beijing-based Dexin
Yongming Consultation estimated that
VAT might be lowered by 5% to 12%.
The analyst added that the expected
VAT cut looked set to increase Chinas
coal imports, although she warned that
a boost in Chinese imports could also
push up international spot prices, even-
tually resulting in even higher purchas-
ing costs for power plants. However,
some international coal industry players
have speculated that the mooted VAT
reduction was designed to dampen do-
mestic thermal coal prices rather than
encourage additional imports.
At the forum, Hao said he expected
Chinas total coal imports would reach
150 million mt in 2011 and increase
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
China India
1. Coal generation units installed per year in China and India.
Source: Platts UDI World Electric Power Plants
coal
further in 2012 and 2013. During 2010,
China imported 164.83 million mt of all
types of coal, including anthracite and
lignite that Hao excludes. This was up
31.5% on year, while total imports dur-
ing the rst half of 2011 reached 81.09
million mt, or 70.6% up on year.
At the same forum, Dong Yueying, the
secretary general of the CCTDA said Chi-
nas domestic coal supplies are expected to
increase in the second half of 2011, while
coal demand may ease. Dong said domes-
tic production was 1.785 billion mt in the
rst half of 2011, up 13% on year, while
sales totaled 1.71 billion mt during the
January-June period, up 13.8% on year.
The growth can be seen across the in-
frastructure curve, according to prelimi-
nary gures released by China Customs.
Chinese railroads transported just over
1.1 billion mt of coal in the rst half of
2011, up 129.43 million mt or 13.3% on
year. Meanwhile, Chinas major northern
ports delivered 288 million mt of coal to
the south of the country during the rst
half, up 19.3% on year.
Coal production is up, rail and port
movements are up, but exports are down.
They fell to 710,000 mt in June, down
19.3% on month and a whopping 44.1%
on year, China Customs reported. Dur-
ing the January-June period, the country
exported 8.75 million mt of coal, down
13.7% on year.
The CCTDA secretary generals opti-
mism that demand in the second half of
2011 may ease is not shared by the CEC.
The body stands by its estimate of a 25-
30,000 MW winter shortage.
While some relief was afforded by in-
creased hydroelectric generation levels
during the summer, Macquarie Research
cautions that coming toward the end of
the wet season, there seems to be more
challenge for the Chinese power supply
moving into the winter with less hydro
availability. This will translate into ad-
ditional pressure on thermal supplies in
the short term.
In the medium term, China is target-
ing the production of 3.8 billion mt of
coal by 2015. To put this in context, Bar-
clays Capital says that output will thus
be some 550 million mt higher than in
2010. But it adds that production in 2010
was 890 million mt higher than in 2005.
Xinjiang autonomous region will be
the key coal development area in the next
10 years, as its coal resources amount to
roughly 40% of the national total. The
construction of a new rail link from
Xinjiang, due to be completed in 2013,
should help improve transport signi-
cantly and allow regional coal output to
rise to 500 million mt in 2015 and a bil-
lion mt in 2020, when it would represent
26% of national output, according to the
regional government.
Chinas ability to move fast and deci-
sively to tackle problems should never
be underestimated, with its thermal coal
mine consolidation program in recent
years a good example. But supplying coal
demand without recourse to substantial
additional imports will be difcult.
At the same time, it will seek to buy
imports as smartly and cheaply as possi-
ble. In this respect its sudden price sensi-
80
100
120
140
160
180
Sep-11 Jun-11 Mar-11 Dec-10 Sep-10
Kalimantan Richards Bay Newcastle Qinhuangdao Korea West
2. Coal price trendsphysical ($/mt).
FOB Richards Bay (6,000 kcal/kg NAR); FOB Newcastle (6,300 kcal/kg GAR); FOB Kalimantan (5,900 kcal/kg GAR); CIF Korea West (6,080 kcal/kg NAR); FOB
Qinhuangdao (6,200 kcal/kg GAR)
Source: Platts
coal
tivity surprised many in the industry in
2011, with standard South African and
Australian coals no longer in favor and
attention turning to lower caloric val-
ue, and hence cheaper, Indonesian coal.
Barclays Capital has commented that,
for China, this heightened price sensi-
tivity resulted in thermal coal imports
for H1 2011 falling 18% year-on-year
over a period in which Chinese thermal
coal generation showed a 12% increase
year-on-year. This was due to domestic
output growing 13% year-on-year for H1
and China improving the use of domes-
tic rail infrastructure, particularly the
Daqin line, with Chinas railways trans-
porting 790 million mt of thermal coal
in H1 2011, up 15.9% year-on-year (ac-
cording to gures from the NDRC).
The move to lower caloric coal has
also created a fresh product with Austra-
lian producers offering what is described
as off-spec material, with the 5,500 ki-
localories per kilogram product being
distinct from the standard 6,000 kcal/kg
offering. Traders have reported low-key
Chinese buying as supporting the New-
castle thermal coal market at the same
time as free-on-board prices are falling
due to pressure from rising freight pric-
eswith the Baltic Exchange Dry Index
of bulk cargo freight rates reaching a
nine-month high of 1,907 points on Sep-
tember 16and the continued absence
of Japanese buyers on the spot market.
The real demand in the market at the
moment is the sub-bituminous and ultra-
low caloric value coals from Indonesia
and off-spec Australian into China, said
one market participant. We have seen
very good demand for these products
from China in the last few weeks, and
this is keeping a oor in the market for
the time being, he added.
The thirst for coal has also made for
an active merger and acquisitions mar-
ket. Countries like Australia and Mo-
zambique, and regions of Indonesia like
Kalimantan and Sumatra, have become
major targets.
With Australia a particular favorite of
Chinese companies, some industry com-
mentators have seen the election of a
Liberal-National coalition government in
the state of New South Wales in March
2011 as something of a setback. The new
administration made an election promise
to overhaul state planning laws for coal
mining following criticism of the former
Labor governments handling of large-
scale coal projects.
Back in October 2008, Chinas Shenhua
Energy paid the New South Wales gov-
ernment the equivalent of $250 million
to acquire a ve-year exploration license
for the Watermark thermal coal project
following a competitive bidding process.
Shenhua has identied a 500 million
mt coal resource at Watermark in the
Gunnedah coaleld, and hopes to com-
mence production for export in 2013.
However, the NSW minister for re-
sources and energy, Chris Hartcher, said
in a statement in mid-September that the
state government is tightening the con-
ditions of Shenhuas renewed coal explo-
ration license for the Watermark project
in response to a campaign by local farm-
ers and residents.
Chinese companies will not be alone in
feeling the pinch. Hartcher said similarly
stringent conditions will remain in force
for the renewal of the exploration license
for BHP Billitons Caroona coal project,
noting that the license of Shenhua Wa-
termark Coal will be subject to tougher
conditions and those of Caroona will be
maintained to ensure our valuable agri-
cultural and water resources have much
greater protection than was available un-
der the former Labor government.
One of the conditions attached to the
renewal of Shenhua Energys exploration
license is that farmland purchased for the
Watermark project must continue to be
used for agricultural purposes. And Hart-
cher has banned longwall mining under-
neath the alluvial aquifers or opencast
mining on or underneath the areas ood
plain at both Watermark and Caroona.
Tying in overseas coal resources for
export to China may thus prove to be
fraught with difculties for Chinese
companies. But with 1,000 MW and
more of coal-red generating capacity
being connected to Chinas grids each
week, no options can be ruled out from
the raft of measures to secure the fuel
needed to underpin the countrys social
and economic transformation.
India has around 400 million peo-
ple without access to electricity. It is
also home to the largest number of
poor and malnourished people in the
world. It has a problem with both food
and energy security. As people are
brought out of poverty, they consume
more energy and more food, which, in
addition to population growth, puts
constant pressure on resources. Indias
average annual population growth
is estimated at 1.1% out to 2030. By
2030, it can expect to be the worlds
most populous country.
Just as a growing population and ris-
ing income levels put pressure on en-
ergy resources, the growing demand for
food is creating serious constraints on
water. According to the International
Water Management Institute (IWMI),
large areas of southern India already
suffer physical water scarcityde-
ned as 75% of river ows being allo-
cated to agriculturewhile most of the
countrys north suffers from economic
water scarcitymeaning that water
is abundant relative to use, but inad-
equately distributed.
For both food and fuel, the current
path is towards ever greater dependence
on imports, damaging the countrys
balance of payments and increasing its
exposure to price volatility in interna-
tional markets. Already the worlds larg-
est importer of edible oil seeds and puls-
es, India is expected to start importing
more rice and wheat in future. Despite
its substantial domestic resources, even
imports of coalin addition to oil and
gasare forecast to increase rapidly in
the next few years.
Interdependency
The ability to manage one resource
will increasingly impinge on the abil-
ity to manage others. An increase in
India
India: New
Policy Directions
Ross McCracken, Editor, Platts Energy Economist
India is careering headlong down the rocky road of import
dependency. Agricultural and energy policies arent working
alone, and they certainly arent working together. The need
for an integrated approach to efcient resource use is pressing,
suggesting India needs a new model of rural development in
which water management and agriculture is combined with
localized energy production.
India
agricultural output points towards in-
creased mechanization and fertilizer
use, but this in turn ties agricultural
output more closely to oil prices and
imports. Any gain in food security
would be offset by the commensurate
decline in energy security, with poten-
tial for importing ination.
The increasing interdependence of
resources is nowhere more evident
than with regard to Indias pursuit of
new energy crops. These require ir-
rigation and land. Addressing both
Indian and Chinese biofuels policies,
the IWMI paper Biofuels and Agricul-
tural Water Use: Blue Impacts of Green
Energy concluded that a worsening
water scarcity situation in both coun-
tries makes this prospect untenable
and is likely to jeopardize sustainable
water use for food production.
The issue of food security cannot be
solved without greater access to both
water and energy, preferably isolated
from the international oil market. In
short, India faces not a set of indi-
vidual challenges, requiring separate
strategies, but an overall problem of
resource scarcity that requires a holis-
tic approach to resource management.
At the heart of this has to be a concept
of cross-commodity efciency.
Localization
There are a number of factors that
point to a more distributed and de-
centralized energy system being ap-
propriate in India. Water manage-
ment is largely a local issue and needs
to be kept so. It is power intensive to
transport water long distances. That
more than half the population are
expected to remain in rural areas out
to 2030 and beyond, unlike in Chi-
na, suggests that localized networks
to address rural electrication and
water management, combined with
renewables, could be a more efcient
approach than the build out of large-
scale distribution and transmission
infrastructure based on centralized
coal-red power plant.
Indias creaking distribution and
transmission system is very inef-
cient and in some cases near bank-
rupt. While on a falling trend, aver-
age technical and commercial losses
in power distribution and transmis-
sion at the state level are generally
estimated at between 25-30%. More-
over, a key weakness in the sector is
the provision of cheap or free elec-
tricity to farmers. Breaking free from
that dependence by providing alter-
native sources of power generation
might prove easier than overcoming
the entrenched political resistance to
implementing electricity pricing re-
form at the state level. The existing
system could concentrate on supply-
ing Indias growing urban centers,
where its capacity to collect revenue
for the electricity it produces is much
greater.
Gasication may also provide an
alternative energy route. First, almost
anything can be gasied, from car
tires to biomass, although it remains
an expensive technology option and
can have water use implications. Gas-
10
20
30
40
50
60
1950 1960 1970 1980 1990 2000 2010
Agriculture Services Industry
1. GDP share of agriculture, industry and services in India.
Source: Central Statistical Organisation (CSO) from 1950-2007
India
ication can provide a fungible en-
ergy commodity derived from mul-
tiple feedstocks with product options
in both the fuel and power markets.
Second, Indias one truly abundant
fossil fuel is coal. Underground coal
gasication could hugely expand the
exploitable coal resource, bringing
into play reserves inaccessible by tra-
ditional mining techniques and lower
quality coals unsuited to normal coal-
red power generation.
This could be integrated with bio-
gas, coalbed methane and shale gas,
and potentially the countrys experi-
ments with compressed natural gas as
a transport fuel. Indias current coal
policies, where expansion of the do-
mestic industry is blocked by licensing
and environmental barriers, simply
isnt working in terms of adding suf-
cient new capacity, suggesting that
policymakers should be prepared to
think differently. The current favored
solution appears to be buying coal
properties abroad.
It may seem a hard task to develop
innovative new energy systems in
tandem with existing infrastructure,
but neither Indias food nor energy
security strategies are currently viable.
A workaround solution is required to
achieve greater sustainability in both
areas and bypass seemingly insur-
mountable political and institutional
blockages. To ensure cross-commod-
ity efciency, the country needs to
promote an agrarian model based on
sustainable and combined water and
energy management.
India also has the opportunity, in
some senses, of a blank sheetthe
400 million people without access
to electricity. Renewables are usually
compared with fossil fuel generation
options on the basis that the trans-
mission and generation infrastruc-
ture already exists. Renewables score
badly because they incur system inte-
gration costs as they are grafted onto
a system designed without them in
mind. However, starting from scratch
means that large-scale infrastructure
costs may be avoided, playing to re-
newables advantage.
Innovative India
Despite the huge challenges, India
does display the capacity to leapfrog
in part traditional modes of develop-
ment. It has to some extent done so
already. Indias economy is distinctive
because of the growth of its services
sector, in comparison with Chinas
concentration on manufacturing in-
dustries. India has seen rapid growth
in the elds of high-tech information
technology, communications and
business services.
Unusually for a developing econ-
omy, service sector growth has out-
stripped growth in industry and
manufacturing signicantly since
1990. The Indian services sector ac-
counted for 55% of GDP in 2007/08,
compared with 30% in 1950; in con-
trast agricultures share dropped from
55% to less than 18% over the same
period, while industry grew from
15% to just over 27%.
Business services tend to be more
knowledge intensive than manufac-
turing and more innovative, suggest-
ing India has a growing knowledge
economy with which to work. Indias
capacity to innovate can be seen from
its use of the Patent Cooperation Trea-
ty (PCT). While China leads middle
income countries by a long way, In-
dia comes a strong second, with 1,313
PCT applications in 2010.
Two aspects are notable. First is that
Indian PCT applications grew very
rapidly in 2010, by 36.6%, the sec-
ond fastest growth rate in the world
behind China. Second is that India
is rapidly outstripping countries like
Russia and Brazil, with applications
running at roughly double the num-
ber in Russia and almost three times
those in Brazil.
In addition, the share of applica-
tions from companiesas opposed to
individuals and universitiesis about
70%, again second only to China,
implying greater nancial backing
behind patents and thus a greater ca-
pacity to move ideas to market. This
compares with 49% for Brazil and
25% for Russia. Indias patent appli-
cations are particularly strong in the
India
elds of organic ne chemistry and
pharmaceuticals.
Focusing on localized energy and
water systems, which may rely heav-
ily on solar, wind, energy efciency
technologies and storage, potentially
represents a signicant new direction
for Indias manufacturing sector. Ac-
cording to OECD research, to main-
tain employment opportunities for
its growing population and accom-
modate rural to urban shift, India re-
quires growth in industry and manu-
facturing just as much as it does its
successful services sector. Given low
wage costs, the country is well placed
to take advantage of the green econo-
mys export opportunities, as well as
supply the domestic market.
Combined Policies
This is not to understate the enor-
mous challenges that India faces.
Rather, it is to draw attention to the
interdependencies of those challenges
and the synergies that can be achieved
through a more integrated approach to
resource management and efciency,
one that combines both agricultural
and energy goals.
Current policies could be made to
work better; notably meeting set targets
for expanding coal production, but at
further cost to both the local and glob-
al environment. However, the political
reality is that coal production will con-
tinue to lag demand and import depen-
dency will rise.
Equally, there is no reason to give
up on power sector price reform. How-
ever, just as in the EU and the US, the
means to reforming what are in effect
agricultural subsidies is not to remove
them entirely, but to change their
name and tie them more effectively
to particular policy outcomes, rather
than the simple buying of votes. Dis-
tributed and decentralized energy pro-
duction may deliver this. If agriculture
has to be subsidized with cheap power,
then cross-commodity efciency sug-
gests doing so in a way that increases
the agricultural sectors capacity to
produce electricity.
Nor is there reason to abandon at-
tempts to reduce losses in the trans-
mission and distribution system. But
that doesnt mean it has to be the fo-
cus of system expansion. Again, there
is a long-term lock-in to the fossil fuel
economy; centralized power systems
depend, whatever their efciency, on
central power plants, where the main
option for India remains coal. Instead,
by moving outside of the current struc-
tures, India might unblock some of its
political and institutional impasses and
at the same time put itself on a more
sustainable development path for both
food and energy.
14.1
2.7
12.8
22.7
59.8
-3.8
6.3
13.1
57.8
48.8
7.3
Average Annual Growth
Rate (%): 2005-2010
India
Russian Federation
Brazil
Turkey
Malaysia
South Africa
Mexico
Ukraine
Chile
Thailand
Others
0 200 400 600 800 1,000 1,200 1,400
1990
1995
2000
2005
2010
2. Top 10* middle income countries: PCT applications.
*Data excludes China
Source: WIPO
Many changes have occurred in the
global steel industry over the last few
years. Regional consolidation in the
West saved producers and service cen-
ters from terminal over-capacity and
near bankruptcy at the beginning of
the century. Rapid demand-led expan-
sion in Asia is growing a new indus-
try, particularly centered on China but
with new mills in India, South Korea,
Indonesia, Vietnam and others.
Singapore, long an oil trading and
regional nancial markets hub, has
emerged as the frontrunner in the steel
and mining industrys gradual shift in
utilizing risk-management products.
Some industry participants expect
contracts based on global finished
steel products to also take off in the
future, with the Shanghai Futures
Exchange rebar contract already see-
ing trading volumes grow. Singapore
is regarded as a safe base to access
Chinas physical demand and futures
market potential and monitor regula-
tory developments.
Steel is the most ubiquitous of in-
dustrial materials, vital for economic
growth and urbanization. It is said that
either something is made of steel or
made by something made of steel.
The world made and consumed over
1.413 billion metric tons of crude steel
in 2010 and is on target to reach 1.524
billion mt in 2011, according to the
World Steel Association. At current
per annum growth rates, the world
could make over 2 billion mt by 2016.
It takes about 1.6 mt of iron ore and
0.7 mt of coking coal and PCI coal to
make a ton of steel. This equation,
fundamental to furnace economics,
has led to interdependency between
miner and steelmaker, tying their for-
tunes together.
Interdependence led for many years
to long-term supply contracts priced
annually that would benchmark the
price of iron ore and coking coal for
all suppliers and consumers. Given
also that steel and mining are both
reliant on huge xed costs, invest-
ment decisions needed to be for the
long term.
Consolidation of the steel industry in
the US, Japan, Germany and the rest of
Europe accelerated from the late 1980s,
eradicating some overcapacity created
during a period of state ownership
from the 1950s and leading to better
control of production and margins. In
the process, the steel industry became
far more global.
The emerging-markets focused Mittal
Steel agreed to merge with Arcelor in
June 2006. By late 2007 the merger was
nalized, creating a single global steel
producer with more than 100 million
mt/year of capacity in the biggest tie-
up in the history of the industry. The
steel
Steel Industry Evolution
Favors Singapore as
Risk-Management Center
Francis Browne, Senior Managing Editor, Platts Price Group
steel
purchase by Indias Tata Steel of Corus
later produced another global group
with production in some 26 countries.
Meanwhile Thyssen bought local rival
Krupp in Germany.
Russian producers like Severstal, Evraz
and NLMK took over long-established
operations in the US market. And most
recently, Japans Nippon Steel group is
set to grow into Asias biggest steelmak-
er by nalizing the purchase of Sumito-
mo Metals and expanding further over-
seas, to leave closely-matched domestic
rival JFE Steel in the shade.
During steels unprotable years
of overcapacity, miners could not -
nance investment in new mining ca-
pacity, due to concerns about the -
nancial health of their customers and
oversupply.
This created a huge imbalance be-
tween supply and demand for steel-
making ingredients just as Chinas steel
industry started a growth take-off in
the last decade.
In 2000, China produced 127 million
mt of crude steel; this increased almost
vefold to 626 million mt in 2010 and
is on target to exceed 700 million mt in
2011. To meet the shortfall in raw mate-
rials supply, a spot market emerged for
seaborne iron ore imports into China,
which were being priced at a substan-
tial premium over long-term contract
material priced annually.
Platts launched its IODEX series of
price assessments in June 2008 to mea-
sure the value of iron ore nes in the
spot market that had emerged for mate-
rial owing into China.
The spot market is dynamic and
supplied by sources outside the tradi-
tional big contract players located in
Australia and Brazil. A seaborne spot
market of more than 200 million mt
has emerged with 50% supplied by
India and the balance coming from
many other countries including Iran,
Ukraine, Mexico and Venezuela. It
also attracts material from the Atlan-
tic basin from suppliers such as Cana-
da and South Africa.
The growth of the iron ore spot mar-
ket and the transparent pricing that
Platts and other publishers such as
The Steel Index (TSI), which is now
owned by Platts and operated as a
separate unit, brought to the market
challenged the annually-agreed pric-
ing within the long-term contracts
system. Since April 2010, most long-
term contracts have switched from
annual pricing to frameworks priced
quarterly using a mechanism that re-
fers to Platts IODEX price assessments
for the previous quarter.
At the same time that iron ores
physical market was undergoing a
revolution in the way it was priced, a
derivative market to create hedging in-
190
210
230
250
270
290
310
330
350
370
390
5/10 7/10 9/10 11/10 1/11 3/11 5/11 7/11 9/11
$
quarterly negotiations
$225
$225
$209
$285
$315
$330
Platts Premium Low Volume
Contract price
1. Spot prices guide contract settlements.
Source: Platts
steel
struments to offer price risk manage-
ment tools was also evolving for the
steel ingredient.
Securities brokerages led by Deutsche
Bank and Credit Suisse in 2008
launched iron ore swaps traded over
the counter, based on a contract grade
62%-Fe content. These paper contracts
mirror the physical market by trad-
ing the future value of the monthly
average of various indices, like IODEX
and TSI, that are measuring the daily
physical spot market price normalized
to this grade.
In 2009, the Singapore Exchange
launched a clearing contract for this
nascent iron ore swaps market settled
against the TSI 62%-Fe iron ore index.
The value of swaps cleared by the ex-
change in a month topped $1 billion
for the rst time in August 2011.
The CME Group also offers a range
of clearing for iron ore swaps as does
Intercontinental Exchange and LCH
Clearnet.
The CME Group offers clearing and
options settled against both the ma-
jor iron ore indices. It also launched
clearing for coking coal swaps in 2011,
which should enable a more balanced
hedging of the main steel raw materi-
als. This follows a switch to quarterly
and monthly xed-price sales for Aus-
tralian and Canadian coking coal from
annual contracts since April 2010.
More miners have recently moved
trading operations to Singapore, posi-
tioning sales and logistics operations
in the Southeast Asian equatorial
state to bridge their mainly southern
hemisphere mines to the largest glob-
al importers in China, Japan and the
rest of Asia. At the same time, they
can tap into a growing banking and
brokerage community offering risk
management products.
Brazils Vale, the worlds biggest iron
ore exporter, in 2011 moved more se-
nior executives to Singapore into a
new global marketing ofce to serve
Asia, its largest market. Xstrata Coal,
the unit of the Switzerland-based
group that also manages its iron ore
operations, is eyeing a move to the
city state from Sydney, while Anglo
American is reportedly planning a
similar move.
BHP Billitons metallurgical coal mar-
keting ofce has long been in Singa-
pore, leading the sales from the groups
mines in Queensland, Australia, owned
under the BHP Billiton-Mitsubishi Al-
liance with Japans Mitsubishi Corp.
Global traders Noble Group and Cargill
centralize their metallurgical coal busi-
ness in Singapore. Hong Kong-based
Noble trades iron ore in its home loca-
tion, while Cargills iron ore trading
team is headed out of Singapore.
US coal giant Peabody Energy
opened an ofce in Singapore to act as
a trading hub in 2009, while US coal
trader Xcoal is representing Consol
Energy and other miners in Asia at of-
ces in Singapore as well as in Beijing,
Seoul and Tokyo.
As the steel industry gets familiar
with the idea of buying its raw mate-
rials based on published prices it has
started to look downstream of the
blast furnace, to semi-nished and n-
ished steel products, to sell them on
the same basis.
The need for robust and comprehen-
sive price assessments from trusted and
established publishers throughout the
steel value chains, combined with news,
resulted in Platts acquisition in July 2011
of Steel Business Brieng (SBB), a compre-
hensive steel-dedicated news and price
publisher and the parent of TSI.
The combined Platts, SBB and TSI will
consolidate its Asian presence in Singa-
pore. From this base the enlarged steel
group within Platts can develop and
evolve price assessments for raw materi-
als and steel in the Asian region, which
will provide global relevance and great-
er transparency to the worlds steel and
raw material markets.
Platts price assessments and news
may help offer a basis for steel to be
traded physically, for nancial institu-
tions and exchanges to develop price
risk management tools, and for the en-
tire industry to be better armed with
quality insight and information. As
such, Platts is likely to play a signi-
cant role in the steel and mining in-
dustries future.
Asias appetite for energy demand is
rising rapidly. Energy has been an in-
tegral part of the regions economic de-
velopment, and will be increasingly so
as Asian countries continue to pursue
growth. In a carbon-constrained world,
Asia needs to nd solutions which will
meet the regions energy needs in a
competitive, reliable and sustainable
manner. The challenges are further
intensied by recent geopolitical de-
velopments in the Middle East, North
Africa and the Fukushima nuclear ac-
cident in Japan.
Fossil fuels are likely to remain a
dominant energy source for some time
to come, even as renewable energy
sources such as solar, wind, hydro,
geothermal power are contributing a
greater share towards the global ener-
gy mix. While the latter is a key part
of the solution towards a low carbon
future, they currently cannot replace
fossil fuels as base-load generation op-
tions due to intermittency and higher
costs of production. The exceptions
are countries that are blessed with hy-
dro and geothermal energy resources,
which can be tapped at relatively low
costs. Such options are unfortunately
not available to all countries, especial-
ly small countries like Singapore which
are alternative energy-disadvantaged.
Natural gas is emerging as an increas-
ingly important energy option within
the global energy mix. The potential
for natural gas to take on a larger role
is further supported by its cleaner
emissions relative to other fossil fuels
such as coal and oil, as well as the im-
provements to energy security brought
about by diversied developments in
natural gas markets. The Internation-
al Energy Agency (IEA) has projected
that natural gas will overtake coal as
the most dominant fuel option and
reach up to 25% of the worlds energy
mix by 2035
1
. The supply increase is
backed by signicant discoveries of
unconventional gas in different parts
of the world, including the US, China
and Australia.
Asia, in particular, is well-placed to
ride on this trend towards the golden
age of gas. Within the Association of
Southeast Asian Nations (ASEAN), we
are seeing infrastructural develop-
ments by several countries to prepare
for the integration of liqueed natural
gas (LNG) as a fuel source for the re-
gion. Energy security is further boost-
ed by ASEANs long-term goal of an in-
tegrated energy market, underpinned
by ongoing initiatives such as the
ASEAN Power Grid and Trans-ASEAN
Gas Pipeline.
Beyond physical energy supplies,
securing our energy future also
means nding new solutions which
can transform uncertainties into op-
portunities. Such is the importance
of technology as a key enabler. Asia
special section
Securing Our
Energy Future
Chee Hong Tat, Chief Executive, Energy Market Authority
1
http: //www.iea.org/weo/docs/weo2011/
WEO2011_GoldenAgeofGasReport.pdf
special section
recognizes this and is participating
in global efforts in energy research,
development and deployment. Both
China and India are top leaders in
clean energy investments. Japan is
also a forerunner in promoting smart
energy technologies. Being major en-
ergy consumers and innovators, their
efforts will impact the Asian energy
landscape and catalyse opportunities
in the development and deployment
of energy technologies. Southeast
Asia is no exception. Recognizing the
importance of achieving low carbon
economic growth, ASEAN is collabo-
rating with the IEA to identify tech-
nological options and chart develop-
ment pathways for such a future.
Singapores Role and Efforts
Amidst the volatile global energy
landscape, no single city or country
will have all the answers. As a small
city-state with no natural resources,
Singapore is acutely aware of its en-
ergy challenges. Our fuel mix has
changed to more than 80% natural
gas today from 71% fuel oil in 2001.
Natural gas emits half as much car-
bon dioxide as fuel oil, so each unit of
electricity we use is now cleaner than
it was 10 years ago. This is one of the
positive outcomes of market liberal-
ization, which had led to the rapid re-
planting of more efcient and cleaner
gas-red combined gas turbines, re-
placing the oil-red steam plants. It
also benets consumers as gas-red
plants can produce electricity more
cost-effectivelyly and efciently com-
pared with oil-red steam plants. If
we had continued to use steam plants,
our electricity tariff today would be
about 15 to 20% higher.
To strengthen Singapores energy
security, we are building an LNG ter-
minal to enable us to diversify our gas
imports from different sources around
the world. The LNG terminal, which
is Asias rst multi-user terminal, will
be ready by the rst-half of 2013. The
terminal will enable Singapore to posi-
tion itself as a regional LNG hub and
catalyse new business opportunities
such as LNG trading, LNG bunkering
and cold energy integration.
We also seek to augment our lim-
ited energy supply options by miti-
gating demand, thus making us more
carbon-efcient. Singapores energy
intensitymeasured by the energy
consumed per unit of GDPfell by
22% from 1990-2005. We plan to
achieve another 35% improvement in
our energy-efciency levels from 2005
to 2030. This means we continue to
grow while consuming less energy.
This has been made possible through
incentives to encourage the adoption
of more energy-efcient industrial
equipment, and the greening of
commercial buildings.
In the industry sector, we have grants
for companies to install energy-ef-
cient equipment. We are also working
with industry players to implement
co-generation/tri-generation plants,
which are more energy-efcient. In the
area of green buildings, we have intro-
duced incentives to encourage develop-
ers and owners to build and maintain
greener buildings. Under the Green
Mark Scheme, new buildings and exist-
ing buildings undergoing major retro-
tting are required to meet minimum
requirements on environmental sus-
tainability equivalent based on this de
facto yardstick for sustainable develop-
ment in the tropics.
Singapore is investing in energy-relat-
ed R&D because we recognise that tech-
nology is a key enabler for achieving
our objectives of having a competitive
energy market, securing energy sup-
plies and developing a dynamic energy
sector. New advances in smart grids,
green buildings, and carbon capture
and utilisation will help mitigate ener-
gy demand and carbon emissions. We
recently invested S$195 million under
the Energy Innovation Programme Of-
ce to support the pursuit of such tech-
nologies. This will involve industry,
government, and the scientic commu-
nity to develop innovative energy solu-
tions, to strengthen our local research
capabilities in clean energy. This will
enhance Singapores role as a living
laboratory to demonstrate large-scale
viability of clean energy solutions.
Test-bedding is a necessary process
for the successful commercialisation
of new energy technologies. Singa-
pore is among the first in the region
to embark on an Electric Vehicle (EV)
test-bed that aims to examine the
technical and operational feasibility
of using EVs in the city-states tropi-
cal urban environment. We have also
embarked on an Intelligent Energy
System (IES) pilot project, which is
an important step towards a smarter
power grid. The goal is to provide
consumers with more information,
choice and real-time control over
their electricity usage, thereby im-
proving energy-efficiency for Singa-
pore as a whole.
Our small energy demand notwith-
standing, we hope to contribute to the
global energy agenda by actively foster-
ing dialogue and collaboration among
various energy stakeholdersbe it lo-
cally, within the region or beyond.
Singapore facilitates such discussions
on pertinent energy issues, strategies
and solutions through the Singapore
International Energy Week (SIEW),
which brings together energy profes-
sionals and thought leaders alike. Aptly
themed Securing Our Energy Future,
this years SIEW (31 October to 4 No-
vember) reects the urgent need to
rethink policies and strategies to meet
the growing energy demand, as we se-
cure our collective energy landscape for
a sustainable future.
Securing our energy future is a long-
term endeavour that requires the joint
efforts of all countries. Technological
innovation and international collabo-
ration will be key as Asia continues to
nd solutions to address our shared en-
ergy challenges.
special section
Our Reputation
Put simply, Platts is one of the most trusted,
most respected information sources for the
global energy industry.
Our Reach
Access to virtually any industry market
segment you want to reach, no matter how
specialized
Our Reliability
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experience and unbiased voice of the energy
industry.
Our Relationship
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strategic solutions, integrating marketing
solutions across our vast network of media
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Platts Strategic Media connects you to the
markets and decision-makers you want to reach.
2010 was a year of recovery, but for
some more than others. Oil may have
bounced back, but the energy com-
plex as a whole was marked by distinct
disparities between commodities and
regions. But if there is one consistent
factor, it is that Asia steals the show.
Whether coal, gas, oil or electricity, re-
cession or boom, Asia-Pacics rate of
consumption growth outstrips all other
regions by a substantial margin.
At the heart of this is one of the
worlds largest mass migrations in his-
tory, from countryside to city. Even if
Chinas population growth may have
slowed, it expects to add 16 million
urban dwellers a year out to 2020, cre-
ating huge new demand for energy.
Urbanization across non-OECD Asia-
Pacic is one of the key driving forces
behind the regions rapid growth in en-
ergy consumption, so it is no surprise
that in the Platts 250 Asian companies
are once again to the fore.
However, companies ability to ben-
et from Asias growth depends on
location, activity type and market.
While crude, coal and to some extent
LNG benet from international pric-
ingand thus from Asian growthgas
and power markets are more regionally
based. Higher feedstock prices make
prots for some, but represent costs
to others. In Asia too, the impact of
growth in energy demand is differenti-
ated. Oil reners and power producers
often nd themselves caught between
the rock of international feedstock pric-
es and the hard place of regulated do-
mestic markets.
Recovery and Decline
World oil demand in 2010 grew by
3.1% on year to 87.382 million bar-
rels a day, surpassing its former peak
in 2007 and more than reversing the
previous two years of contraction. Ris-
ing demand was accompanied by rising
prices: Platts physical crude benchmark
Dated Brent averaged $79.50/barrel in
2010, its second-highest annual average
ever and a big step up from the $61.67/b
top 250 global energy companies
Asia Forges
Ahead
Ross McCracken, Editor,
Platts Energy Economist
Platts Top 250 Global Energy
Company Rankings
reviewed.
Platts Top 250 Global Energy
Company Rankings measures
nancial performance by ex-
amining each companys assets,
revenue, prots and return on
invested capital. All ranked com-
panies have assets greater than
(US) $3 billion. The underlying
data comes from S&P Capital
IQ, a Standard & Poors business
(like Platts, a division of The Mc-
Graw-Hill Companies).
average seen in 2009. Asia saw the fast-
est on-year growth in demand, at 5.3%,
as opposed to Europes anemic 0.1%.
World gas consumption jumped by
7.4% on year in 2010 to 3,169 billion
cubic meters, also reversing the con-
traction of 2009 and reaching a new
peak. Although demand rose in all re-
gions, the pricing picture amply dem-
onstrated the benets to consumers of
gas-to-gas competition, and by contrast
the benets of its absence to producers.
It also illustrated the almost complete
disconnection of the US gas market
from trade in LNG and thus the sever-
ing of international gas price transmis-
sion mechanisms.
In the US, gas prices at Henry Hub av-
eraged $4.09/MMBtu over 2009, rising to
only $4.4/MMBtu in 2010 as supply from
shale plays kept overall gas supply well
above demand. This has caused a shift
in drillers attention from shale gas itself
to liquids production. By contrast, gas
prices at the UK National Balancing Point
jumped from an average of $4.775/MMB-
tu in 2009 to $6.575/MMBtu in 2010.
But the runaway gas markets were,
rst, spot LNG prices in the Asia-Pacif-
ic market, which increased 46.2% on
year from an average of $5.28/MMBtu
in 2009 to $7.72/MMBtu in 2010, and
second, long-term oil-linked gas con-
tracts. Although these rose less than
spot prices, they achieved the highest
absolute values, averaging, in Europe,
$9.0058/MMBtu in 2010, up from
$7.4038/MMBtu in 2009.
World coal consumption jumped
7.6% on year to 3,555.8 million tons of
oil equivalent (mtoe) in 2010, driven
by Asian demand. While this is also an
all-time global high, the regional varia-
tion is stark. Coal consumption in Eu-
rope is in long-term decline. Although
consumption rose by 4.4% in 2010, and
steam coal prices delivered to Northwest
Europe jumped 39.6%, coal use remains
well below pre-nancial crisis levels.
A similar trend is emerging in newly
gas-rich North America. US steam coal
prices on NYMEX averaged $61.60/
short ton over 2010, up 26.3% from
2009. But again, while North Ameri-
3-year
CGR %
Platts
Rank
Rank Company Country Industry
1 Cairn India Ltd India E&P 116.5 120
2 PTT Aromatics & Rening Plc Thailand R&M 49.6 217
3 YTL Power International Bhd Malaysia DU 48.9 209
4 China Resources Power Holdings Co Ltd Hong Kong IPP 42.4 149
5 YTL Corp Bhd Malaysia DU 40 227
6 China Yangtze Power Co Ltd China IPP 35.8 112
7 GD Power Development Co Ltd China IPP 32.7 180
8 Shanxi Xishan Coal and Electricity Power Co Ltd China C&CF 29.5 192
9 Shanxi Lu'an Environmental Energy Development Co Ltd China C&CF 29.1 159
10 Reliance Infrastructure Ltd India EU 28.8 232
11 Adaro Energy Tbk Pt Indonesia C&CF 28.7 238
12 Huaneng Power International Inc China IPP 28.1 127
13 Yanzhou Coal Mining Co Ltd China C&CF 28.1 100
14 China Longyuan Power Group Ltd China IPP 26.9 247
15 Banpu Pcl Thailand C&CF 26.3 151
16 CNOOC Ltd Hong Kong E&P 26.2 15
17 China Coal Energy Co Ltd China C&CF 25.1 97
18 Reliance Industries Ltd India R&M 24.7 24
19 Bumi Resources Tbk Pt Indonesia C&CF 24.5 226
20 Gail (India) Ltd India GU 23.1 109
1. Fastest growing Asia companies.
Source: S&P Capital IQ/Platts
Fastest Growing is based on a three year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
numbers for the past four years (current year included). If only three years of data was available then it is a two year CGR. All rankings are computed from
data assessed on June 8, 2011.
Platts
Rank
2011
Assets Revenues Prots
Return on
invested capital
3-year
CGR%
Industry
code
Company State or country Region $ million Rank $ million Rank $ million Rank ROIC % Rank
1 Exxon Mobil Corp Texas Americas 302,510 5 341,578 2 30,460 2 18 13 -2 IOG
2 Chevron Corp California Americas 184,769 13 189,607 6 19,024 6 16 20 -2 IOG
3 Gazprom OAO Russian Federation EMEA 330,261 2 118,401 12 32,443 1 13 39 14 IOG
4 PetroChina Co Ltd China Asia/Pacic Rim 254,914 8 220,177 5 21,034 3 12 41 21 IOG
5 Total SA France EMEA 206,640 11 189,153 7 14,234 7 13 35 1 IOG
6 Royal Dutch Shell plc United Kingdom EMEA 322,560 4 368,056 1 20,127 5 11 54 1 IOG
7 ConocoPhillips Texas Americas 156,314 15 175,752 8 11,358 8 12 46 1 IOG
8 China Petroleum & Chemical Corp China Asia/Pacic Rim 153,143 16 281,981 4 10,788 9 11 49 17 IOG
9 OJSC Rosneft Oil Company Russian Federation EMEA 93,829 21 61,942 25 10,400 10 14 30 9 IOG
10 Lukoil Oil Company Russian Federation EMEA 84,017 27 104,956 15 9,006 12 13 34 9 IOG
11 Statoil ASA Norway EMEA 119,203 19 89,523 17 6,473 16 12 47 0 IOG
12 Petrobras-Petroleo Brasilier Brazil Americas 328,193 3 125,937 10 20,779 4 9 84 8 IOG
13 E.ON AG Germany EMEA 219,815 10 125,833 11 9,007 11 9 78 11 EU
14 Repsol YPF SA Spain EMEA 97,241 20 74,779 20 6,319 17 11 56 2 IOG
15 CNOOC Ltd Hong Kong Asia/Pacic Rim 50,464 47 27,280 52 8,175 14 24 6 26 E&P
16 Eni SpA Italy EMEA 189,590 12 132,663 9 8,507 13 8 89 4 IOG
17 RWE AG Germany EMEA 133,828 18 68,593 21 4,454 24 10 67 7 DU
18 JX Holdings Inc Japan Asia/Pacic Rim 77,058 28 114,941 13 3,719 30 10 61 9 R&M
19 Endesa SA Spain EMEA 89,990 24 40,157 34 5,560 21 10 60 20 EU
20 TNK-BP Holdings Russian Federation EMEA 30,881 91 40,280 33 6,540 15 26 4 6 IOG
21 Oil & Natural Gas Corp Ltd India Asia/Pacic Rim 42,881 59 25,888 56 4,943 22 18 14 7 E&P
22 China Shenhua Energy Co Ltd China Asia/Pacic Rim 52,454 39 22,165 64 5,729 20 14 32 23 C&CF
23 Ecopetrol SA Colombia Americas 37,626 66 22,613 63 4,389 25 98 1 23 IOG
24 Reliance Industries Ltd India Asia/Pacic Rim 68,061 32 58,508 27 4,247 26 9 83 25 R&M
25 Centrica plc United Kingdom EMEA 31,732 85 35,405 37 2,957 36 19 11 11 DU
26 Scottish and Southern Energy plc United Kingdom EMEA 35,314 73 44,738 30 2,376 43 15 25 23 EU
27 Occidental Petroleum Corp California Americas 52,432 40 19,045 69 4,569 23 12 45 0 IOG
28 PTT Plc Thailand Asia/Pacic Rim 41,195 61 61,784 26 2,702 37 9 77 8 IOG
29 Gazprom Neft JSC Russian Federation EMEA 32,064 83 30,301 46 3,148 33 12 42 14 IOG
30 Marathon Oil Corp Texas Americas 50,014 50 67,113 23 2,568 40 8 92 4 IOG
31 Exelon Corp Illinois Americas 52,240 41 18,644 71 2,563 41 10 66 0 EU
32 GDF Suez France EMEA 265,503 7 113,751 14 6,216 18 4 183 21 DU
33 National Grid plc United Kingdom EMEA 76,388 29 22,647 62 3,409 31 7 104 8 DU
34 Enel SpA Italy EMEA 241,628 9 96,872 16 5,911 19 4 187 19 EU
35 Surgutneftegaz Russian Federation EMEA 46,682 53 17,640 77 3,894 28 9 73 0 IOG
36 Hess Corp New York Americas 35,396 72 33,862 40 2,125 47 10 72 2 IOG
37 BG Group plc United Kingdom EMEA 50,299 49 17,166 81 3,383 32 10 71 9 IOG
38 Iberdrola SA Spain EMEA 134,725 17 40,976 32 3,866 29 5 157 20 EU
39 Dominion Resources Inc Virginia Americas 42,817 60 15,197 88 2,963 35 11 57 -1 DU
40 Imperial Oil Ltd Canada Americas 21,246 127 23,494 59 2,197 46 17 18 0 IOG
41 AK Transneft OAO Russian Federation EMEA 50,767 45 11,759 111 4,033 27 10 68 20 S&T
42 Indian Oil Corp Ltd India Asia/Pacic Rim 40,850 62 67,824 22 1,724 55 7 114 14 R&M
43 EnBW Energie Baden-Wuerttemberg AG Germany EMEA 50,668 46 23,664 58 1,576 60 8 91 6 EU
44 Suncor Energy Inc Canada Americas 72,439 31 35,692 36 2,673 38 5 166 27 IOG
45 Sasol Ltd South Africa EMEA 22,925 120 17,305 79 2,256 45 14 28 8 IOG
46 Apache Corp Texas Americas 43,425 58 12,183 109 3,032 34 9 76 7 E&P
47 CEZ As Czech Republic EMEA 31,822 84 10,548 120 2,575 39 13 36 4 EU
48 Vattenfall AB Sweden EMEA 87,594 26 31,458 43 1,914 52 5 174 14 EU
49 Southern Co Georgia Americas 55,032 37 17,456 78 2,040 49 6 133 4 EU
50 NextEra Energy Inc Florida Americas 52,994 38 15,317 87 1,957 50 6 124 0 EU
Notes: C&CF = coal and consumable fuels, DNR = data not reported, DU = diversied utility, E&P = exploration and production, EU = electric utility, GU = gas utility, IOG = integrated oil and gas, IPP = independent
power producer and energy trader, R&M = rening and marketing, S&T = storage and transfer. All rankings are computed from data assessed on June 8, 2011.
Platts
Rank
2011
Return on
invested capital
3-year
CGR%
Industry
code
51 Coal India Ltd India Asia/Pacic Rim 18,015 140 11,057 117 2,392 42 31 2 13 C&CF
52 Devon Energy Corp Oklahoma Americas 32,927 80 9,940 126 2,333 44 10 62 -4 E&P
53 OMV AG Austria EMEA 37,964 65 31,405 44 1,240 83 6 132 5 IOG
54 Tatneft OAO Russian Federation EMEA 20,281 129 15,664 86 1,563 62 11 52 10 E&P
55 Formosa Petrochemical Corp Taiwan Asia/Pacic Rim 15,761 149 23,336 61 1,348 75 12 44 -6 R&M
56 SK Innovation Co Ltd Korea Asia/Pacic Rim 27,005 101 47,147 28 989 98 7 116 1 R&M
57 Gas Natural SDG SA Spain EMEA 65,195 34 26,432 54 1,617 58 4 198 25 GU
58 NTPC Ltd India Asia/Pacic Rim 30,228 93 12,638 105 2,059 48 8 99 14 IPP
59 Public Service Enterprise Group Inc New Jersey Americas 29,909 95 11,793 110 1,557 63 9 80 -3 DU
60 Kansai Electric Power Co Inc Japan Asia/Pacic Rim 89,986 25 33,044 42 1,469 67 3 215 1 EU
61 EDP Energias De Portugal SA Portugal EMEA 58,216 36 19,081 68 1,453 69 4 186 9 EU
62 Bashneft OJSC Russian Federation EMEA 14,991 154 13,341 98 1,429 70 13 37 58 E&P
63 Fortum Oyj Finland EMEA 31,580 87 8,478 138 1,750 54 9 85 12 EU
64 EDF France EMEA 345,880 1 87,746 18 854 109 1 241 3 EU
65 YPF SA Argentina Americas 11,402 183 11,084 116 1,453 68 28 3 15 IOG
66 Chesapeake Energy Corp Oklahoma Americas 37,179 68 9,366 128 1,774 53 6 125 6 E&P
67 Saudi Electricity Co Saudi Arabia EMEA 50,905 44 7,437 150 608 138 12 43 10 EU
68 Entergy Corp Louisiana Americas 38,685 64 11,488 112 1,270 81 6 120 0 EU
69 Valero Energy Corp Texas Americas 37,621 67 81,342 19 923 103 4 188 -5 R&M
70 Idemitsu Kosan Co Ltd Japan Asia/Pacic Rim 30,994 90 43,656 31 724 125 5 142 -2 R&M
71 Canadian Natural Resources Canada Americas 44,050 57 12,730 104 1,687 56 5 173 5 E&P
72 Compania Espanola de Petroleos SA Spain EMEA 16,500 146 29,818 47 854 110 8 88 1 IOG
73 Edison International California Americas 45,530 56 12,409 108 1,304 80 5 148 -2 EU
74 Tokyo Gas Co Ltd Japan Asia/Pacic Rim 22,523 123 18,316 72 1,139 88 7 111 1 GU
75 Veolia Environnement SA France EMEA 74,064 30 46,841 29 814 112 2 226 2 DU
76 Inpex Corp Japan Asia/Pacic Rim 32,995 79 11,251 114 1,535 64 5 140 -8 E&P
77 Chubu Electric Power Co Inc Japan Asia/Pacic Rim 65,635 33 27,808 51 1,009 95 2 220 -1 EU
78 PG&E Corp California Americas 46,025 54 13,841 97 1,113 89 5 164 1 DU
79 Eletrobras-Centrais Electricas Brasileiras SA Brazil Americas 92,721 22 16,191 84 1,327 78 2 225 7 EU
80 Polski Koncern Naftowy Orlen SA Poland EMEA 18,609 137 28,284 49 803 115 7 109 9 R&M
81 TonenGeneral Sekiyu Corp Japan Asia/Pacic Rim 11,163 189 28,617 48 511 157 17 17 -8 R&M
82 American Electric Power Co Inc Ohio Americas 50,455 48 14,427 92 1,214 86 4 189 3 EU
83 Cia Energetica de Minas Gerais Brazil Americas 21,180 128 7,596 147 1,333 76 10 64 10 EU
84 Duke Energy Corp North Carolina Americas 59,090 35 14,272 93 1,317 79 3 210 4 EU
85 Husky Energy Inc Canada Americas 30,076 94 18,074 75 1,166 87 5 161 5 IOG
86 Murphy Oil Corp Arkansas Americas 14,233 160 23,401 60 798 116 9 81 8 IOG
87 Encana Corp Canada Americas 35,152 74 8,827 133 1,492 65 5 151 -25 E&P
88 SNAM Rete Gas SpA Italy EMEA 28,423 98 4,679 185 1,489 66 8 87 25 GU
89 Consolidated Edison Inc New York Americas 36,146 70 13,325 99 1,003 96 5 175 1 DU
90 Tenaga Nasional Bhd Malaysia Asia/Pacic Rim 24,469 109 9,772 127 1,032 93 7 113 9 EU
91 S-Oil Corp Korea Asia/Pacic Rim 9,285 202 18,141 74 619 134 13 33 11 R&M
92 MidAmerican Energy Holdings Co Iowa Americas 45,668 55 11,127 115 1,238 84 4 193 -3 DU
93 Federal Grid Co of Unied Energy System JSC Russian Federation EMEA 31,163 88 3,721 202 1,946 51 7 108 20 EU
94 Enersis SA Chile Americas 27,792 99 12,596 106 991 97 5 149 10 EU
95 CLP Holdings Ltd Hong Kong Asia/Pacic Rim 23,065 119 7,513 149 1,329 77 7 106 5 EU
96 Woodside Petroleum Ltd Australia Asia/Pacic Rim 20,196 131 4,193 194 1,575 61 10 70 4 E&P
97 China Coal Energy Co Ltd China Asia/Pacic Rim 18,592 138 10,708 119 1,038 92 7 107 25 C&CF
98 Galp Energia SGPS SA Portugal EMEA 13,153 165 18,936 70 594 141 9 82 4 IOG
99 KazMunaiGas Exploration and Production JSC Kazakhstan EMEA 9,830 194 4,149 195 1,597 59 19 10 8 E&P
100 Yanzhou Coal Mining Co Ltd China Asia/Pacic Rim 11,207 187 5,235 176 1,354 74 15 22 28 C&CF
Platts
Rank
2011
Return on
invested capital
3-year
CGR%
Industry
code
101 PTT Exploration and Production Plc Thailand Asia/Pacic Rim 11,286 185 4,617 186 1,357 73 17 16 15 E&P
102 Cenovus Energy Inc Canada Americas 22,810 121 12,898 103 987 99 6 138 -20 IOG
103 Turkiye Petrol Ranerileri AS Turkey EMEA 8,712 210 17,168 80 483 163 17 19 5 R&M
104 Novatek OAO Russian Federation EMEA 10,197 192 3,914 198 1,358 72 19 12 24 E&P
105 Enbridge Inc Canada Americas 31,095 89 15,040 89 964 100 4 197 8 S&T
106 CPFL Energia SA Brazil Americas 12,659 170 7,100 152 908 104 11 51 9 EU
107 Polska Grupa Energetyczna SA Poland EMEA 18,727 136 6,932 155 1,012 94 8 102 -4 EU
108 Transcanada Corp Canada Americas 48,096 52 8,018 142 1,265 82 3 212 -3 S&T
109 Gail (India) Ltd India Asia/Pacic Rim 8,886 207 7,727 145 885 105 14 31 23 GU
110 PPL Corp Pennsylvania Americas 32,837 81 8,521 137 955 101 5 170 9 EU
111 Empresa Nacional de Electricidad SA Chile Americas 12,896 169 4,888 182 1,088 90 12 48 12 IPP
112 China Yangtze Power Co Ltd China Asia/Pacic Rim 24,231 110 3,287 209 1,236 85 8 86 36 IPP
113 FirstEnergy Corp Ohio Americas 34,805 76 13,253 100 784 118 4 199 1 EU
114 Alpiq Holding AG Switzerland EMEA 21,663 125 14,539 90 655 129 5 152 2 EU
115 Polish Oil And Gas Co SA Poland EMEA 12,485 173 7,205 151 831 111 10 65 9 IOG
116 Anadarko Petroleum Corp Texas Americas 51,559 42 10,842 118 761 120 2 223 -1 E&P
117 Progress Energy Inc North Carolina Americas 33,054 78 10,190 123 860 108 4 195 4 EU
118 BP plc United Kingdom EMEA 272,262 6 297,107 3 -3,719 249 -3 249 1 IOG
119 Spectra Energy Corp Texas Americas 26,686 103 4,945 180 1,043 91 6 136 1 S&T
120 Cairn India Ltd India Asia/Pacic Rim 10,285 191 2,262 227 1,394 71 15 24 117 E&P
121 Plains All American Pipeline LP Texas Americas 13,703 161 25,893 55 505 160 5 139 8 S&T
122 Peabody Energy Corp Missouri Americas 11,363 184 6,860 156 777 119 11 59 14 C&CF
123 Eletropaulo-Metropolitana Eletricidade de Sao Paulo SA Brazil Americas 7,193 228 5,726 171 796 117 22 7 11 EU
124 Xcel Energy Inc Minnesota Americas 27,388 100 10,311 122 752 121 4 181 1 DU
125 GS Holdings Corp Korea Asia/Pacic Rim 26,037 104 37,107 35 448 174 3 211 16 R&M
126 Public Power Corporation SA Greece EMEA 23,293 114 7,825 144 751 122 5 150 4 EU
127 Huaneng Power International Inc China Asia/Pacic Rim 34,464 77 15,672 85 533 152 3 218 28 IPP
128 OMV Petrom SA Romania EMEA 12,106 177 5,932 165 701 128 10 63 15 IOG
129 Sempra Energy California Americas 30,283 92 9,003 130 749 123 4 190 -8 DU
130 Acea SpA Italy EMEA 9,173 205 3,340 208 868 107 18 15 0 DU
131 Tokyo Electric Power Co Inc Japan Asia/Pacic Rim 182,065 14 64,048 24 -14,881 250 -13 250 -1 EU
132 Mol Hungarian Oil and Gas Co Hungary EMEA 24,194 111 21,041 65 509 159 4 204 18 IOG
133 Interregional Distribution Grid Companies Holding JSC Russian Federation EMEA 7,128 229 134 250 1,618 57 25 5 EU
134 Ultrapar Participacoes SA Brazil Americas 8,199 216 25,085 57 452 172 8 98 29 S&T
135 DTE Energy Co Michigan Americas 24,896 107 8,557 136 630 132 5 171 0 DU
136 Kyushu Electric Power Co Inc Japan Asia/Pacic Rim 51,522 43 17,729 76 343 193 1 238 0 EU
137 Korea Electric Power Corp Korea Asia/Pacic Rim 92,035 23 34,611 39 -63 246 0 245 11 EU
138 Eskom South Africa EMEA 36,058 71 10,080 124 539 151 2 222 21 EU
139 Cosmo Oil Co Ltd Japan Asia/Pacic Rim 19,442 134 33,065 41 345 191 3 209 -8 R&M
140 Osaka Gas Co Ltd Japan Asia/Pacic Rim 17,693 142 14,163 94 548 148 4 191 -1 GU
141 Canadian Oil Sands Trust Canada Americas 7,243 227 3,162 213 881 106 14 29 -1 E&P
142 Hindustan Petroleum Corp Ltd India Asia/Pacic Rim 15,385 152 30,484 45 375 183 4 196 11 R&M
143 Bharat Petroleum Co Ltd India Asia/Pacic Rim 14,805 155 27,254 53 360 187 4 192 4 R&M
144 Caltex Australia Ltd Australia Asia/Pacic Rim 5,639 240 18,163 73 308 201 9 75 -1 R&M
145 Power Assets Holdings Ltd Hong Kong Asia/Pacic Rim 11,921 179 1,334 242 925 102 10 69 -6 EU
146 Tractebel Energia SA Brazil Americas 8,111 217 2,421 225 715 127 14 26 10 IPP
147 Sunoco Inc Pennsylvania Americas 13,297 163 34,915 38 257 218 4 178 -6 R&M
148 Moscow United Electric Grid OJSC Russian Federation EMEA 8,361 214 3,743 201 575 145 13 38 42 EU
149 China Resources Power Holdings Co Ltd Hong Kong Asia/Pacic Rim 18,391 139 6,248 163 631 131 5 167 42 IPP
150 Noble Energy Inc Texas Americas 13,282 164 2,904 217 725 124 8 95 -2 E&P
Platts
Rank
2011
Return on
invested capital
3-year
CGR%
Industry
code
151 Banpu Pcl Thailand Asia/Pacic Rim 6,385 234 2,123 232 804 114 16 21 26 C&CF
152 Origin Energy Ltd Australia Asia/Pacic Rim 23,272 117 8,302 140 595 140 3 208 11 IOG
153 Hong Kong & China Gas Co Ltd Hong Kong Asia/Pacic Rim 9,344 201 2,492 224 718 126 11 58 11 GU
154 El Paso Corp Texas Americas 25,270 105 4,616 187 806 113 4 205 0 S&T
155 Energy Transfer Partners LP Texas Americas 12,150 176 5,885 167 617 135 6 134 -5 S&T
156 Tohoku Electric Power Co Inc Japan Asia/Pacic Rim 49,594 51 20,386 66 -402 248 -1 248 -2 EU
157 NRG Energy Inc New Jersey Americas 26,896 102 8,849 132 477 165 3 216 14 IPP
158 ONEOK Partners LP Oklahoma Americas 7,920 220 8,676 135 473 168 8 94 14 S&T
159 Shanxi Lu'an Environmental Energy Development Co Ltd China Asia/Pacic Rim 4,519 246 3,219 212 516 155 22 8 29 C&CF
160 Southwestern Energy Co Texas Americas 6,017 239 2,611 222 604 139 15 23 28 E&P
161 Companhia Paranaense de Energia Brazil Americas 11,272 186 3,999 197 583 144 8 97 9 EU
162 Datang International Power Generation Co Ltd China Asia/Pacic Rim 32,433 82 9,116 129 372 184 2 231 23 IPP
163 RusHydro JSC Russian Federation EMEA 23,279 116 14,002 96 351 188 2 228 106 EU
164 Neste Oil Oyj Finland EMEA 9,582 200 14,470 91 308 200 5 143 -4 R&M
165 Showa Shell Sekiyu KK Japan Asia/Pacic Rim 14,687 156 27,989 50 190 235 4 194 -9 R&M
166 Esso Saf France EMEA 5,326 241 16,942 82 199 234 9 79 5 R&M
167 AES Corporation Virginia Americas 40,511 63 16,647 83 -86 247 0 247 7 IPP
168 CenterPoint Energy Inc Texas Americas 20,111 132 8,785 134 442 175 4 201 -3 DU
169 Terna SpA Italy EMEA 15,492 151 2,064 234 628 133 6 126 6 EU
170 Cimarex Energy Co Colorado Americas 4,358 250 1,713 239 575 146 19 9 4 E&P
171 Nexen Inc Canada Americas 22,616 122 5,799 169 569 147 3 207 -4 E&P
172 Enel Green Power SpA Italy EMEA 18,880 135 2,856 218 609 137 5 156 9 IPP
173 ONEOK Inc Oklahoma Americas 12,499 172 13,030 102 335 195 4 177 -1 GU
174 Verbund AG Austria EMEA 16,234 147 4,306 192 540 150 5 169 2 EU
175 Wisconsin Energy Corp Wisconsin Americas 13,060 167 4,202 193 454 171 6 128 0 DU
176 Korea Gas Corp Korea Asia/Pacic Rim 22,520 124 20,020 67 184 237 1 234 17 GU
177 A2A SpA Italy EMEA 17,773 141 7,975 143 415 176 4 202 -5 DU
178 Chugoku Electric Power Co Japan Asia/Pacic Rim 34,850 75 13,055 101 21 244 0 244 0 EU
179 Talisman Energy Inc Canada Americas 24,976 106 6,763 157 406 177 2 224 -4 E&P
180 GD Power Development Co Ltd China Asia/Pacic Rim 23,107 118 6,126 164 361 186 4 203 33 IPP
181 Gasunie Netherlands EMEA 15,979 148 2,205 229 611 136 5 158 6 GU
182 Thai Oil Pcl Thailand Asia/Pacic Rim 4,835 244 10,352 121 293 206 8 100 7 R&M
183 Iberdrola Renovables SA Spain EMEA 37,165 69 3,018 214 485 162 2 227 33 IPP
184 Red Electrica Corp SA Spain EMEA 11,911 180 1,906 235 525 153 7 105 11 EU
185 CONSOL Energy Inc Pennsylvania Americas 12,071 178 5,163 179 347 189 6 130 13 C&CF
186 Empresa De Energia De Bogota SA Colombia Americas 6,479 232 502 248 589 142 11 55 27 GU
187 Companhia De Transmissao De Energia Eletrica Paulista Brazil Americas 4,375 248 1,332 243 480 164 14 27 20 EU
188 Cheung Kong Infrastructure Holdings Ltd Bermuda Asia/Pacic Rim 8,264 215 362 249 647 130 8 90 15 EU
189 Light SA Brazil Americas 6,056 238 3,843 200 340 194 11 53 14 EU
190 Tata Power Co Ltd India Asia/Pacic Rim 8,832 208 4,009 196 460 170 7 112 19 EU
191 Hellenic Petroleum SA Greece EMEA 9,866 193 11,414 113 242 220 5 162 0 R&M
192 Shanxi Xishan Coal and Electricity Power Co Ltd China Asia/Pacic Rim 4,456 247 2,546 223 397 178 12 40 29 C&CF
193 Neweld Exploration Co Texas Americas 7,494 226 1,883 237 523 154 9 74 2 E&P
194 Edison SpA Italy EMEA 23,743 112 14,066 95 28 243 0 243 8 IPP
195 Acciona SA Spain EMEA 29,478 96 8,433 139 225 228 2 232 -8 EU
196 CMS Energy Corp Michigan Americas 15,616 150 6,432 160 363 185 4 200 0 DU
197 Northeast Utilities Massachusetts Americas 14,522 158 4,898 181 388 180 4 176 -6 EU
198 Elia System Operator SA Belgium EMEA 8,489 212 1,265 245 541 149 8 93 10 EU
199 AGL Energy Ltd Australia Asia/Pacic Rim 9,263 204 6,431 161 346 190 5 145 21 DU
200 SCANA Corp South Carolina Americas 12,968 168 4,601 188 376 182 5 165 0 DU
Platts
Rank
2011
Return on
invested capital
3-year
CGR%
Industry
code
201 Powergrid Corp Of India India Asia/Pacic Rim 17,191 143 1,896 236 588 143 4 184 23 EU
202 Cameco Corp Canada Americas 7,920 221 2,111 233 512 156 8 96 -3 C&CF
203 Abu Dhabi National Energy Co PJSC United Arab Emirates EMEA 31,595 86 5,681 172 277 214 1 236 36 DU
204 NiSource Inc Indiana Americas 19,939 133 6,422 162 295 205 3 213 -7 DU
205 Pioneer Natural Resources Co Texas Americas 9,679 198 1,803 238 475 167 7 110 1 E&P
206 Electric Power Development Co Ltd Japan Asia/Pacic Rim 24,772 108 7,587 148 234 223 1 235 3 IPP
207 Santos Ltd Australia Asia/Pacic Rim 14,676 157 2,167 230 486 161 5 172 -3 E&P
208 Canadian Utilities Canada Americas 9,720 197 2,642 221 476 166 5 141 3 DU
209 YTL Power International Bhd Malaysia Asia/Pacic Rim 11,203 188 4,333 191 390 179 5 168 49 DU
210 Shikoku Electric Power Co Inc Japan Asia/Pacic Rim 16,986 145 7,064 153 282 212 3 217 -1 EU
211 UGI Corp Pennsylvania Americas 6,374 235 5,591 173 261 217 7 103 1 GU
212 Kinder Morgan Inc Texas Americas 28,908 97 8,191 141 -41 245 0 246 -8 S&T
213 Brookeld Infrastructure Partners LP Bermuda Americas 13,109 166 634 247 467 169 5 153 EU
214 Enagas SA Spain EMEA 9,819 195 1,322 244 449 173 6 123 7 GU
215 Ameren Corp Missouri Americas 23,515 113 7,638 146 139 240 1 240 0 DU
216 NHPC Ltd India Asia/Pacic Rim 11,707 181 1,093 246 510 158 5 155 15 IPP
217 PTT Aromatics & Rening Plc Thailand Asia/Pacic Rim 5,055 243 8,902 131 206 231 6 137 50 R&M
218 Energias Do Brasil SA Brazil Americas 8,085 218 2,973 215 344 192 6 118 4 EU
219 Tauron Polska Energia SA Poland EMEA 8,524 211 5,210 177 291 209 5 147 EU
220 Pinnacle West Capital Corp Arizona Americas 12,363 175 3,264 210 330 197 5 163 -3 EU
221 Grupa Lotos SA Poland EMEA 6,453 233 6,663 159 230 224 6 129 14 R&M
222 Energen Corp Alabama Americas 4,364 249 1,579 240 291 208 11 50 3 E&P
223 International Power plc United Kingdom EMEA 23,289 115 5,280 175 229 225 1 233 13 IPP
224 OGE Energy Corp Oklahoma Americas 7,669 224 3,717 203 295 204 6 120 -1 DU
225 Essar Energy plc United Kingdom EMEA 12,474 174 10,006 125 202 233 2 221 200 R&M
226 Bumi Resources Tbk Pt Indonesia Asia/Pacic Rim 8,773 209 4,370 190 311 199 5 159 24 C&CF
227 YTL Corp Bhd Malaysia Asia/Pacic Rim 15,244 153 5,320 174 274 215 2 219 40 DU
228 Rabigh Rening & Petrochemical Co Saudi Arabia EMEA 12,600 171 12,503 107 56 242 1 242 168 R&M
229 AES Elpa SA Brazil Americas 7,791 222 5,778 170 222 230 5 143 11 EU
230 Hokkaido Electric Power Co Japan Asia/Pacic Rim 20,207 130 6,756 158 143 239 1 239 0 EU
231 Hokuriku Electric Power Co Japan Asia/Pacic Rim 17,002 144 5,896 166 228 227 2 229 1 EU
232 Reliance Infrastructure Ltd India Asia/Pacic Rim 8,436 213 3,220 211 334 196 5 146 29 EU
233 EOG Resources Inc Texas Americas 21,624 126 5,853 168 161 238 1 237 12 E&P
234 Alliant Energy Corp Wisconsin Americas 9,283 203 3,416 207 308 202 5 160 0 DU
235 El Paso Pipeline Partners LP Texas Americas 6,177 237 1,344 241 378 181 7 117 130 S&T
236 Fortis Inc Canada Americas 13,321 162 3,643 205 311 198 3 214 11 EU
237 MDU Resources Group Inc North Dakota Americas 6,304 236 3,910 199 244 219 6 127 -3 DU
238 Adaro Energy Tbk Pt Indonesia Asia/Pacic Rim 4,743 245 2,771 220 267 216 8 101 29 C&CF
239 Pepco Holdings Inc District of Columbia Americas 14,480 159 7,039 154 139 240 2 230 -9 EU
240 Integrys Energy Group Inc Illinois Americas 9,817 196 5,203 178 224 229 4 180 -20 DU
241 Mosenergo Ao Russian Federation EMEA 9,143 206 4,867 183 290 210 4 185 23 EU
242 AGL Resources Inc Georgia Americas 7,518 225 2,373 226 234 222 7 115 -2 GU
243 QEP Resources Inc Colorado Americas 6,785 230 2,246 228 283 211 6 119 7 E&P
244 MVV Energie AG Germany EMEA 5,230 242 4,544 189 187 236 6 122 14 DU
245 NSTAR Massachusetts Americas 7,934 219 2,917 216 238 221 6 135 -4 DU
246 EVN AG Austria EMEA 9,678 199 3,706 204 279 213 4 179 7 EU
247 China Longyuan Power Group Ltd China Asia/Pacic Rim 11,485 182 2,135 231 303 203 4 182 27 IPP
248 BKW Energie AG Switzerland EMEA 7,704 223 2,798 219 229 226 6 131 0 EU
249 Atmos Energy Corp Texas Americas 6,764 231 4,790 184 206 232 5 154 -7 GU
250 Atco Ltd Canada Americas 10,571 190 3,426 206 291 207 3 206 6 DU
can coal use rose 5.3% over 2009, it re-
mained 9.5% below 2007 levels.
In Asia, the story is very different.
Consumption rose by 9.1% on year to
2,384.7 mtoe, reaching its highest-ever
level. Average Chinese steam coal prices
at Qinhuangdao leapt 31.6% in 2010 to
$115.42/metric ton.
Top Ten
The entry of German multi-utility
E.ON AG to the top ten in 2009
the only non-Integrated Oil and Gas
(IOG) company to do so in the last
ve yearsproved eeting. The oil and
gas giants reasserted their dominance
of the top ten rankings, taking all ten
spots despite a stricken BP dropping far
from sight. On the back of higher oil
prices, the top ten companies brought
in a combined $178.874 billion in prof-
its, a 20.4% increase from 2009, but
still down from the bumper year of
2008, when prots hit an all-time high
of $214.042 billion.
US giant Exxon Mobil Corp retained
the top spot in 2010, while Chevron
Corp moved up from ninth in 2009
to second place as it boosted its re-
turn on invested capital (ROIC) to
16% from 10.2% in the previous year.
Gazprom OAO, PetroChina Co Ltd,
Total SA and the China Petroleum &
Chemical Corp took third, fourth,
fth and eighth places, respectively,
while Royal Dutch Shell climbed from
tenth to sixth.
Three re-entrants to the top ten in
2010 included ConocoPhillipsnow
the subject of an innovative demerger
into upstream and downstream busi-
nesseswhich moved up from 24th
place to seventh. Meanwhile Russias
OJSC Rosneft Oil Company and Lukoil
Oil Company rose from 14th and 11th
places, respectively to take the ninth
and tenth spots.
E.ON dropped back to 13th from
sixth, and Brazils Petrobras-Petroleo
Brasilier fell from fourth in 2009 to
12th in 2010. But the biggest omis-
sion from the top ten was UK major BP.
Ranked second in 2009, BP dropped to
118th on account of the cost of the Ma-
condo oil spill in the US Gulf of Mex-
ico. Although in dollar terms its asset
base expanded, as did its revenues, BPs
prots were wiped out. The company
posted a loss for 2010 of $3.719 billion.
Here Come the Russians
Although the year-to-year changes
in the top ten companies can be small,
the big trends can be seen from longer-
term comparisons. In 2006, the top ten
consisted of ve west European inte-
grated oil and gas companies, three US
majors, PetroChina and Petrobras. In
2010, there were still three US majors
but now two Chinese and three Russian
companies, with only two European
companies remaining.
But among the top 20, there were
still eight European companies, includ-
3-year
CGR %
Platts
Rank
Rank Company State or country Industry
1 El Paso Pipeline Partners LP Texas S&T 130.3 235
2 Ultrapar Participacoes SA Brazil S&T 28.7 134
3 Southwestern Energy Co Texas E&P 27.7 160
4 Suncor Energy Inc Canada IOG 27.5 44
5 Empresa De Energia De Bogota SA Colombia GU 27.2 186
6 Ecopetrol SA Colombia IOG 23.4 23
7 Companhia De Transmissao De Energia Eletrica Paulista Brazil EU 20.2 187
8 YPF SA Argentina IOG 14.9 65
9 Peabody Energy Corp Missouri C&CF 14.5 122
10 Light SA Brazil EU 14.3 189
2. Fastest growing Americas companies.
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
Top
Asia
Platts
Rank
2011
Return on
invested capital
Industry
code
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
1 4 PetroChina Co Ltd China 254,914 8 220,177 5 21,034 3 12 41 IOG
2 8 China Petroleum & Chemical Corp China 153,143 16 281,981 4 10,788 9 11 49 IOG
3 15 CNOOC Ltd Hong Kong 50,464 47 27,280 52 8,175 14 24 6 E&P
4 18 JX Holdings Inc Japan 77,058 28 114,941 13 3,719 30 10 61 R&M
5 21 Oil & Natural Gas Corp Ltd India 42,881 59 25,888 56 4,943 22 18 14 E&P
6 22 China Shenhua Energy Co Ltd China 52,454 39 22,165 64 5,729 20 14 32 C&CF
7 24 Reliance Industries Ltd India 68,061 32 58,508 27 4,247 26 9 83 R&M
8 28 PTT Plc Thailand 41,195 61 61,784 26 2,702 37 9 77 IOG
9 42 Indian Oil Corp Ltd India 40,850 62 67,824 22 1,724 55 7 114 R&M
10 51 Coal India Ltd India 18,015 140 11,057 117 2,392 42 31 2 C&CF
11 55 Formosa Petrochemical Corp Taiwan 15,761 149 23,336 61 1,348 75 12 44 R&M
12 56 SK Innovation Co Ltd Korea 27,005 101 47,147 28 989 98 7 116 R&M
13 58 NTPC Ltd India 30,228 93 12,638 105 2,059 48 8 99 IPP
14 60 Kansai Electric Power Co Inc Japan 89,986 25 33,044 42 1,469 67 3 215 EU
15 70 Idemitsu Kosan Co Ltd Japan 30,994 90 43,656 31 724 125 5 142 R&M
16 74 Tokyo Gas Co Ltd Japan 22,523 123 18,316 72 1,139 88 7 111 GU
17 76 Inpex Corp Japan 32,995 79 11,251 114 1,535 64 5 140 E&P
18 77 Chubu Electric Power Co Inc Japan 65,635 33 27,808 51 1,009 95 2 220 EU
19 81 TonenGeneral Sekiyu Corp Japan 11,163 189 28,617 48 511 157 17 17 R&M
20 90 Tenaga Nasional Bhd Malaysia 24,469 109 9,772 127 1,032 93 7 113 EU
21 91 S-Oil Corp Korea 9,285 202 18,141 74 619 134 13 33 R&M
22 95 CLP Holdings Ltd Hong Kong 23,065 119 7,513 149 1,329 77 7 106 EU
23 96 Woodside Petroleum Ltd Australia 20,196 131 4,193 194 1,575 61 10 70 E&P
24 97 China Coal Energy Co Ltd China 18,592 138 10,708 119 1,038 92 7 107 C&CF
25 100 Yanzhou Coal Mining Co Ltd China 11,207 187 5,235 176 1,354 74 15 22 C&CF
26 101 PTT Exploration and Production Plc Thailand 11,286 185 4,617 186 1,357 73 17 16 E&P
27 109 Gail (India) Ltd India 8,886 207 7,727 145 885 105 14 31 GU
28 112 China Yangtze Power Co Ltd China 24,231 110 3,287 209 1,236 85 8 86 IPP
29 120 Cairn India Ltd India 10,285 191 2,262 227 1,394 71 15 24 E&P
30 125 GS Holdings Corp Korea 26,037 104 37,107 35 448 174 3 211 R&M
31 127 Huaneng Power International Inc China 34,464 77 15,672 85 533 152 3 218 IPP
32 131 Tokyo Electric Power Co Inc Japan 182,065 14 64,048 24 -14,881 250 -13 250 EU
33 136 Kyushu Electric Power Co Inc Japan 51,522 43 17,729 76 343 193 1 238 EU
34 137 Korea Electric Power Corp Korea 92,035 23 34,611 39 -63 246 0 245 EU
35 139 Cosmo Oil Co Ltd Japan 19,442 134 33,065 41 345 191 3 209 R&M
ing three utilities, just one less than in
2006. US representation dropped from
six to three, while Russia had four com-
panies in the top 20 compared with
three in 2006. China is represented by
three companies compared with only
two ve years earlier.
The entry of Russian companies into
the ranks of the worlds top energy en-
terprises is a striking feature of the 2010
list, and features not only oil and gas,
but also electricity industry compa-
nies as a result of privatization in the
sector. Of the top ten fastest-growing
companies, three are Russian: RusHy-
dro JSC, Bashneft OJSC and Moscow
United Electric Grid OJSC, with RusHy-
dro recording a giant three-year CGR of
106.1%. There are now 15 Russian com-
panies in the top 250, compared with
11 in 2009 and nine in 2006.
Mighty Gazproms position remains
pre-eminent in natural gas, based on its
huge production volumes and monop-
oly grip on Russias gas pipelines and
exports. However, it may one day have
Asian companies in 2010 Top 250
Top
Asia
Platts
Rank
2011
Return on
invested capital
Industry
code
Company State or country $ million Rank $ million Rank $ million Rank ROIC % Rank
36 140 Osaka Gas Co Ltd Japan 17,693 142 14,163 94 548 148 4 191 GU
37 142 Hindustan Petroleum Corp Ltd India 15,385 152 30,484 45 375 183 4 196 R&M
38 143 Bharat Petroleum Co Ltd India 14,805 155 27,254 53 360 187 4 192 R&M
39 144 Caltex Australia Ltd Australia 5,639 240 18,163 73 308 201 9 75 R&M
40 145 Power Assets Holdings Ltd Hong Kong 11,921 179 1,334 242 925 102 10 69 EU
41 149 China Resources Power Holdings Co Ltd Hong Kong 18,391 139 6,248 163 631 131 5 167 IPP
42 151 Banpu Pcl Thailand 6,385 234 2,123 232 804 114 16 21 C&CF
43 152 Origin Energy Ltd Australia 23,272 117 8,302 140 595 140 3 208 IOG
44 153 Hong Kong & China Gas Co Ltd Hong Kong 9,344 201 2,492 224 718 126 11 58 GU
45 156 Tohoku Electric Power Co Inc Japan 49,594 51 20,386 66 -402 248 -1 248 EU
46 159 Shanxi Lu'an Environmental Energy Development Co Ltd China 4,519 246 3,219 212 516 155 22 8 C&CF
47 162 Datang International Power Generation Co Ltd China 32,433 82 9,116 129 372 184 2 231 IPP
48 165 Showa Shell Sekiyu KK Japan 14,687 156 27,989 50 190 235 4 194 R&M
49 176 Korea Gas Corp Korea 22,520 124 20,020 67 184 237 1 234 GU
50 178 Chugoku Electric Power Co Japan 34,850 75 13,055 101 21 244 0 244 EU
51 180 GD Power Development Co Ltd China 23,107 118 6,126 164 361 186 4 203 IPP
52 182 Thai Oil Pcl Thailand 4,835 244 10,352 121 293 206 8 100 R&M
53 188 Cheung Kong Infrastructure Holdings Ltd Bermuda 8,264 215 362 249 647 130 8 90 EU
54 190 Tata Power Co Ltd India 8,832 208 4,009 196 460 170 7 112 EU
55 192 Shanxi Xishan Coal and Electricity Power Co Ltd China 4,456 247 2,546 223 397 178 12 40 C&CF
56 199 AGL Energy Ltd Australia 9,263 204 6,431 161 346 190 5 145 DU
57 201 Powergrid Corp Of India India 17,191 143 1,896 236 588 143 4 184 EU
58 206 Electric Power Development Co Ltd Japan 24,772 108 7,587 148 234 223 1 235 IPP
59 207 Santos Ltd Australia 14,676 157 2,167 230 486 161 5 172 E&P
60 209 YTL Power International Bhd Malaysia 11,203 188 4,333 191 390 179 5 168 DU
61 210 Shikoku Electric Power Co Inc Japan 16,986 145 7,064 153 282 212 3 217 EU
62 216 NHPC Ltd India 11,707 181 1,093 246 510 158 5 155 IPP
63 217 PTT Aromatics & Rening Plc Thailand 5,055 243 8,902 131 206 231 6 137 R&M
64 226 Bumi Resources Tbk Pt Indonesia 8,773 209 4,370 190 311 199 5 159 C&CF
65 227 YTL Corp Bhd Malaysia 15,244 153 5,320 174 274 215 2 219 DU
66 230 Hokkaido Electric Power Co Japan 20,207 130 6,756 158 143 239 1 239 EU
67 231 Hokuriku Electric Power Co Japan 17,002 144 5,896 166 228 227 2 229 EU
68 232 Reliance Infrastructure Ltd India 8,436 213 3,220 211 334 196 5 146 EU
69 238 Adaro Energy Tbk Pt Indonesia 4,743 245 2,771 220 267 216 8 101 C&CF
70 247 China Longyuan Power Group Ltd China 11,485 182 2,135 231 303 203 4 182 IPP
a challenger in the form of private gas
company Novatek OAO, which is opera-
tor of the planned Yamal LNG project.
Novatek has moved up from 126th
position in 2009 to 104th in 2010. Prof-
its rose from $854 million to $1,358
million with an impressive ROIC of
19% in 2010the twelfth-highest
ROIC out of the entire top 250. It is
also the 34th fastest-growing company
based on its three-year CGR. Includ-
ing AK Transneft OAO, the countrys
oil pipeline monopoly, Russia now has
eight companies primarily focused on
oil in the top 250 as well as two gas and
ve power sector companies.
Returns and Growth
The ROIC rankings are revealing. The
oil majors and big European utilities
may dominate in terms of asset base,
revenues and prots, but when it comes
to return on invested capital only
one OECD-based company makes the
framethe US E&P company Cimarex
Energy Co, which is a new entrant to
Asian companies in 2010 Top 250 (continued)
the list with an overall ranking of 170.
Instead, this is where Latin America
really makes its mark. Top of the board
is Colombias rejuvenated Ecopetrol SA
with a staggering ROIC of 98%. Argen-
tinas YPF SA is third with an ROIC of
28%, while Brazils Eletropaulo-Metro-
politana Eletricidade de Sao Paulo SA is
seventh ranked with an ROIC of 22%.
Russian and Chinese companies are
also well represented, while Kazakh-
stans oil and gas company KazMun-
aigas Exploration and Production JSC
takes the tenth spot with an ROIC of
19%. Coal India Ltd, newly listed in
2010, is second with an ROIC of 31%.
Distinct trends also emerge from the
top 50 fastest growing companies, the
leader of which is Essar Energy plc. Al-
though Essar Energy is incorporated in
the UK, the credit for its three-year CGR
of 199.5% has to go to India, as this is
an Indian-owned and led company.
Out of the top 50 fastest growers, 40 are
from outside the OECD compared with
36 in 2009. And while the oil industry
is out in front in terms of absolute size,
when it comes to growth it is Electric
Utilities, Independent Power Producers
and Coal & Consumable Fuels compa-
nies that dominate the top 50 list of
fastest growers.
That said, oil companies still make
up six of the top ten spots. Perhaps sur-
prisingly, three of these are oil and gas
rening and marketing companiesall
non-OECD and all export-orientated.
They are Indias Essar Energy, Saudi
Arabias Rabigh Rening & Petrochemi-
cal Co and Thailands PTT Aromatics &
Rening Plc. A fourthEl Paso Pipeline
Partners LPis from the oil and gas
storage and transportation segment.
There are three such companies among
the top 50 fastest-growing companies,
as well as four rening and marketing
businesses, compared with ve E&P
and three IOG companies.
The E&P companies lead the IOGs.
The E&P companies posting the fast-
est growth are Cairn India Ltd, with a
three-year CGR of 116.5%, followed by
Russias Bashneft (57.9%) and then Tex-
an company Southwestern Energy Co.
(27.7%). Close on their heels are Chinas
CNOOC Ltd (26.2%) and Russian gas
player Novatek (23.6%). By contrast, the
fastest-growing IOG is Canadas Sun-
cor Energy Inc, with a three-year CGR
of 27.5%. The only other two IOGs to
make it into the top 50 fastest-growing
companies are Colombias Ecopetrol
(23.4%) and PetroChina (20.6%).
C&CF
Chinese companies increasingly dom-
inate the coal and consumable fuels
category, reecting a number of factors.
First, China has the largest and most
rapidly-expanding coal industry in the
world. Second, the industry is undergo-
ing a state-led process of consolidation
that is pushing smaller operations into
major conglomerations. And third, as
the countrys coal imports continue
to increase, Chinese companies are
looking to expand beyond their own
borders for supplies. While there were
three Chinese companies in the C&CF
top ten in 2009, there are now ve, the
two new entrants being Shanxi Luan
Environmental Energy Development
Co Ltd. and Shanxi Xishan Coal and
Electricity Power Co Ltd.
Another new entrant is Coal In-
dia, which in 2010 undertook a mas-
sive initial public offering which was
more than 15 times oversubscribed.
As Indias primary coal producer in
the worlds third largest coal market,
this puts the company second behind
only China Shenhua Energy Co Ltd. It
also puts it 51st in the overall rankings.
In addition, Thailands Banpu Pcl has
Industry Company Country Platts Rank 2011
IOG PetroChina Co Ltd China 4
E&P CNOOC Ltd Hong Kong 15
R&M JX Holdings Inc Japan 18
C&CF China Shenhua Energy Co Ltd China 22
IPP NTPC Ltd India 58
EU Kansai Electric Power Co Inc Japan 60
GU Tokyo Gas Co Ltd Japan 74
DU AGL Energy Ltd Australia 199
3. #1 in Asia by industry.
All rankings are computed from data assessed on June 8, 2011.
emerged in the C&CF group at number
six, reecting the companys expan-
sion into China, Laos and Indonesia.
The emergence of these companies has
pushed Indonesias Adaro Energy Tbk
and Bumi Resources Tbk Pt out of the
top 10 C&CF companies, while the USs
Patriot Coal Corp has also dropped out
to be replaced by Consol Energy Inc.
In terms of growth, there are eight
C&CF companies in the top 50 fastest
growing list. They are all Asian; ve from
China, two from Indonesia and Thai-
lands Banpu. Adaro Energy and Bumi
Resources may have dropped out of the
top ten C&CF companies, but they can
still claim to be amongst the fastest-
growing energy companies in the world.
Utilities
The Electric Utilities category remains
dominated by the European giants. Of
the top ten, eight are European and
two American. While there have been
slight changes in relative positions, the
group remains largely as in 2009. How-
ever, two companies have disappeared
from the top tenFrances EDF and US
company NextEra Energy Incwith
the latter performing well but just be-
ing edged out into 11th place. Replac-
ing them are Germanys EnBW Energie
Baden-Wrttemberg AG and the USs
Southern Co.
Nuclear giant EDF has dropped from
22nd in the overall Platts rankings in
2009 to 64th in 2010, the third year in
a row it has slipped. While still rank-
ing top in terms of assets, the decline in
the companys nancial performance
reects 2.9 billion ($3.9 billion) in
non-recurring risks and impairments
in 2010, owing to deterioration in inter-
national power and gas market condi-
tions. Most of the impairments relate to
the US and Italian markets, but EDF is
also struggling with cost and construc-
tion overruns with its new model nu-
clear reactor at Flamanville in France.
In the IPP sector, the results are much
more internationally diversied. Indias
NTPC Ltd has moved to the top of the
leader board, while the USs Constel-
lation Energy Group Inc has dropped
from rst in 2009 to disappear from
the list altogether, following a net in-
come loss of $931.8 million in 2010.
The company is likely to re-emerge in
2011, but in a new guise, if a proposed
merger with Exelon is completed.
There are now four Chinese compa-
nies in the IPP top ten compared with
two in 2009. This group shows the larg-
est change in composition with the new
entrants including China Yangtze Pow-
er Co. Ltd in third, Datang Internation-
al Power Generation Co. Ltd in eighth
and Enel Green Power SpA in tenth
place. In addition to Constellation En-
ergy, the UKs International Power Plc
has dropped out of the top ten.
The picture is different when it comes
to growth rather than absolute size. If
western Europe dominates the top
rankings for EUs, Russia has the fast-
est growth in the form of RusHydro
JSC, Moscow United Electric Power
Grid, Mosenergo Ao and the Federal
Grid Company of Unied Energy Sys-
tem JSC. Indias Reliance Infrastructure
Ltd and Power Grid Corp of India are
also amongst the fastest growing EUs.
There are no US companies in the fast-
est-growing top ten, but Europe contin-
ues to provide opportunities. The UKs
Scottish and Southern Energy plc and
Spains Iberdrola SA and Endesa SA are
present, while South Africas Eskom
completes the leader board.
There are seven IPPs in the fastest-
growing top 50 companies, with six
coming from China. The non-Chinese
Industry Company Country 3-year CGR % Platts Rank 2011
IOG PetroChina Co Ltd China 20.6 4
GU Gail (India) Ltd India 23.1 109
EU Reliance Infrastructure Ltd India 28.8 232
C&CF Shanxi Xishan Coal and
Electricity Power Co Ltd
China 29.5 192
IPP China Resources Power
Holdings Co Ltd
Hong Kong 42.4 149
DU YTL Power International Bhd Malaysia 48.9 209
R&M PTT Aromatics & Rening Plc Thailand 49.6 217
E&P Cairn India Ltd India 116.5 120
4. Fastest growing Asian companies by industry.
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. All rankings are computed from data
assessed on June 8, 2011.
company is Spains Iberdrola Renovables
SA with a three-year CGR of 33.0%. A
notable absence from the growth list
are Chilean IPPs, with companies such
as AES Gener SA and Colbun SA, which
were represented in 2009, failing to
maintain their places in 2010.
Asian Leaders
The number of Asian companies in
the top 250 continues to rise, reaching
70 in 2010, up from 67 in 2009 and 56
in 2006. In addition, despite having
more companies represented, the aver-
age ranking of Asian companies has also
improved from 135.2 in 2006 to 134.9 in
2009 and 131.3 in 2010 (a lower number
denotes a higher ranking). Asian compa-
nies are not just increasing in number,
but are increasing their rankings relative
to their international peers.
Within Asia, the average ranking of
Japanese companies overall has im-
proved from 145.9 to 132.1. This partly
reects the Japan Petroleum Explora-
tion company dropping out of the top
250, but the improvement is notable
given the sharp fall in the ranking of
the Tokyo Electric Power Co (Tepco)
which was ranked 54th in 2009, but
131st in 2010.
This is the result of the nancial im-
pact of the Fukushima nuclear disaster
in March 2011 and Japanese reporting
of nancial data based on scal years
running from April-March. Tepco re-
corded a loss of $14,881 billion in s-
cal 2010. Other Japanese companies
dropping down the rankings include
Tohoku Electric Power Co, which fell
from 119th to 156th and Chugoku
Electric Power Co, which dropped from
134th to 178th.
By contrast, Japans oil and gas com-
panies performed well. JX Holdings was
the shining star, rising from 129th in
2009 to 18th in 2010. Idemitsu Kosan
Co Ltd increased its ranking from 144th
to 70th. Tokyo Gas Company Ltd upped
its place in the list from 108th to 74th.
For China, most change was seen
within the power sector. The number of
Chinese companies in the top 250 was
the same in 2010 as in 2009, but the
Shenzhen Energy Group, Huadian Pow-
er Intl Corp and Shenergy Co. Ltd were
displaced by Shanxi Luan Environmen-
tal Energy Development Co., Shanxi
Xishan Coal and Electricity Power Co.
and China Longyuan Power Group. In
the oil sector, PetroChina moved up
from seventh in the rankings to fourth,
and CNOOC from 29th to 15th. The
biggest mover, however, was China
Yangtze Power Co., which jumped from
163rd in 2009 to 112th in 2010.
By contrast, India saw three new com-
panies join the top 250 listthe newly-
listed Coal India, oil and gas producer
Cairn India Ltd and the IPP company
NHPC Ltd. As in Japan, the oil sector
also gave India its strongest movers.
The Indian Oil Corp Ltd jumped from
78th in 2009 to 42nd in 2010, while
3-year
CGR %
Platts
Rank
Rank Company Country Industry
1 Essar Energy plc United Kingdom R&M 199.5 225
2 Rabigh Rening & Petrochemical Co Saudi Arabia R&M 167.5 228
3 RusHydro JSC Russian Federation EU 106.1 163
4 Bashneft OJSC Russian Federation E&P 57.9 62
5 Moscow United Electric Grid OJSC Russian Federation EU 42.4 148
6 Abu Dhabi National Energy Co PJSC United Arab Emirates DU 35.8 203
7 Iberdrola Renovables SA Spain IPP 33 183
8 Gas Natural SDG SA Spain GU 24.8 57
9 SNAM Rete Gas SpA Italy GU 24.8 88
10 Novatek OAO Russian Federation E&P 23.6 104
5. Fastest growing EMEA companies.
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. The compound growth rate (CGR) is based on the companies revenue
the Hindustan Petroleum Corp Ltd rose
from 174th to 142nd.
The improvement in oil companies
vis--vis EUs and IPPs largely reects the
difference between being on the cost or
prot side of rising feedstock prices. But
in terms of revenue growth, Asia comes
out on top. Taking all Asian companies
in the top 250 into account, revenues
jumped 32.1% from 2009 to 2010. This
compares with an increase of 21.4% in
South America, 19% in EMEA and just
10.7% in North America.
However, the picture for company
prots was rather different. These rose
by 9.1% in EMEA and by 15.5% in Asia-
Pacic. By contrast, they jumped 32.6%
in South America and a huge 56.6% in
North America. Asia-Pacics relatively
poor performance reects write-downs
amongst Japanese electric utilities and
regulated prices in key domestic markets
such as China and India. By contrast,
the 2010 gures for North America are
attered by hefty write-downs in 2009
by companies such as Chesapeake, Dev-
on Energy and Talisman, all of which
bounced back to protability in 2010.
3-year
CGR %
Platts
Rank
Company
1 Essar Energy plc 199.5 225
2 Rabigh Rening & Petrochemical Co 167.5 228
3 El Paso Pipeline Partners LP 130.3 235
4 Cairn India Ltd 116.5 120
5 RusHydro JSC 106.1 163
6 Bashneft OJSC 57.9 62
7 PTT Aromatics & Rening Plc 49.6 217
8 YTL Power International Bhd 48.9 209
9 Moscow United Electric Grid OJSC 42.4 148
10 China Resources Power Holdings Co Ltd 42.4 149
11 YTL Corp Bhd 40 227
12 Abu Dhabi National Energy Co PJSC 35.8 203
13 China Yangtze Power Co Ltd 35.8 112
14 Iberdrola Renovables SA 33 183
15 GD Power Development Co Ltd 32.7 180
16 Shanxi Xishan Coal and Electricity Power Co Ltd 29.5 192
17 Shanxi Lu'an Environmental Energy Development Co Ltd 29.1 159
18 Reliance Infrastructure Ltd 28.8 232
19 Ultrapar Participacoes SA 28.7 134
20 Adaro Energy Tbk Pt 28.7 238
21 Huaneng Power International Inc 28.1 127
22 Yanzhou Coal Mining Co Ltd 28.1 100
23 Southwestern Energy Co 27.7 160
24 Suncor Energy Inc 27.5 44
25 Empresa De Energia De Bogota SA 27.2 186
3-year
CGR %
Platts
Rank
Company
26 China Longyuan Power Group Ltd 26.9 247
27 Banpu Pcl 26.3 151
28 CNOOC Ltd 26.2 15
29 China Coal Energy Co Ltd 25.1 97
30 Gas Natural SDG SA 24.8 57
31 SNAM Rete Gas SpA 24.8 88
32 Reliance Industries Ltd 24.7 24
33 Bumi Resources Tbk Pt 24.5 226
34 Novatek OAO 23.6 104
35 Ecopetrol SA 23.4 23
36 Gail (India) Ltd 23.1 109
37 Powergrid Corp Of India 23 201
38 Scottish and Southern Energy plc 22.9 26
39 Mosenergo Ao 22.9 241
40 China Shenhua Energy Co Ltd 22.8 22
41 Datang International Power Generation Co Ltd 22.7 162
42 GDF Suez 21.2 32
43 Eskom 21.1 138
44 AGL Energy Ltd 20.6 199
45 PetroChina Co Ltd 20.6 4
46 Iberdrola SA 20.3 38
47 Federal Grid Company of Unied Energy System JSC 20.3 93
48 Endesa SA 20.2 19
49 Companhia De Transmissao De Energia Eletrica Paulista 20.2 187
50 AK Transneft OAO 20.1 41
6. Top 50 fastest growing companies.
Fastest Growing is based on a 3 year compound growth rate (CGR) for revenues. All rankings are computed from data assessed on June 8, 2011.
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