Coal use on rise in SE Asia despite best intentions

The energy multinational Wood Mackenzie determined in a recent study that coal would remain a major fuel source in Southeast Asia for years to come, its use expected to peak only in 2027.

The Indonesian government has a target of generating 23 per cent of its power from renewable sources but has achieved only 12 per cent thus far due to widespread dependence on coal, the burning of which is known to severely damage the environment and affect human health.

The International Energy Agency (IEA) has stated that global demand for coal grew by 0.7 per cent for the two years ending in 2018.

“The narrative surrounding coal has been pessimistic across the world,” commented Jacqueline Tao, a research associate at Wood Mackenzie. “This will result in the gradual slowdown of new coal-fired capacity in Southeast Asia. But the reality of rising power demand and affordability issues in the region means that we will only start to see coal’s capacity plateau post-2030.”

The IEA has estimated that, in the next 20 years, coal demand will continue to rise due to its affordability and availability.

Southeast Asian nations, India and other developing countries will be the centre of coal demand for the next 25 years, obtaining three-fourths of their energy from it, the IEA believes.

By 2040, the power generated from coal will have risen from the current 35 per cent to 40 per cent, while the proportion generated from natural gas drops from 30 to 45 per cent, it has said.

Countries such as Vietnam, the Philippines, Malaysia, Thailand, and Pakistan will have to import coal-generated power from other nations, while the European Union, Japan, South Korea and China will need less.

With coal demand increasing 3.2 per cent a year, India is expected to be the main importer of coal power, though it is increasing its own coal productivity and solar-power generation, as well as developing renewable power along with coal-fired power plants.

 
Coal-fired plants generating a combined 370,000 megawatts will be ready in 2040, compared to the 50,000MW produced at present.

The IEA speculates that countries such as Australia will export more coal despite its falling price and will have to continuously reduce production costs and raise quality.

Indonesia, one of the biggest exporters, expects to produce 400 million tonnes of coal this year, mainly for domestic use and less for export, with other exporting countries taking up the slack.

Due to environmental concerns, most banks around the world decline to subsidise the coal industry and instead encourage the use of clean and renewable energy.

Wood Mackenzie believes wind and solar power will eventually predominate in Southeast Asia, integrated with coal use to generate 35 per cent of power by 2040.

Investment in wind and solar energy will increase by 23 per cent between 2019 and 2050, for a combined value of US$89 billion.

Coal companies in China expect use there to drop by 3 per cent by 2022. Measures have been introduced to curb air pollution in big cities, yet coal burning is still widespread, especially in transportation systems.