Analysts have for years warned against coal power expansion plans in several countries in the region
Many South and Southeast Asian countries have followed Bangladesh’s footsteps in radically reconsidering their coal power projects in the face of new economic realities following the spread of coronavirus.
According to a new analysis from Global Energy Monitor (GEM), four of the region’s largest emerging economies – Bangladesh, Indonesia, the Philippines, and Vietnam – plan to cancel nearly 45 gigawatts (GW) of coal power in 2020, reports China Dialogue.
It started in June 2020 with Bangladesh after Power, Energy and Mineral Resources Minister Nasrul Hamid announced that the government was planning to “review” all but three of the country’s under-development coal plants, capping coal power capacity at 5GW. The announcement put doubt on planned coal plants totalling 23GW.
By November 2020, Bangladeshi media reported that the plan to scrap most of the country’s planned coal was awaiting approval from the prime minister, the report added.
A month later, details of Vietnam’s draft Power Development Plan, which is due to come into force next year, became public.
The draft plan proposed cancelling seven coal plants and postponing six others until the 2030s, by which point it is highly unlikely they will go ahead. The 13 plants represent almost half of Vietnam’s planned coal power development.
Also in November 2020, the Philippines’ Department of Energy proposed a moratorium on new coal power plants which, according to analysis by GEM, could lead to 9.6GW of cancellations.
Later in December, on the fifth anniversary of the Paris Agreement, Pakistani Prime Minister Imran Khan announced that the country would not construct any new coal power plants, though the real-world impact of this grandiose announcement has been questioned.
Adding in proposed project cancellations in Indonesia, GEM estimates that the coal power pipeline in South and Southeast Asia’s four major emerging economies may have dropped by as much as 62GW in 2020, the report said.
Not only that, prospects for a revival of coal development plans in 2021 have also been limited by announcements from major coal financiers in South Korea and Japan of new restrictions on coal power investments beyond their borders.
That leaves just 25GW under development, an 80% decline from just five years ago.
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Exact figures for cancelled and remaining plants will depend on how last year’s flurry of announcements is manifested in specific policies, the report noted.
The report also mentioned that analysts have for years warned that coal power expansion plans in several countries in South and Southeast Asia risked overcapacity in the sector, wasted capital and asset stranding – not to mention greenhouse gas emissions and environmental costs.
One contributing factor to the wave of coal power cancellations and moratoriums around South and Southeast Asia in 2020 was the decline in finance. Banks faced growing public pressure to identify and manage the climate and biodiversity risks associated with coal power development and respond to the climate crisis by committing resources to renewables, the report said.
A recent report from Greenpeace Japan estimates that Southeast Asia’s renewable energy market could be worth up to US$205 billion over the next 10 years, it added.
In Japan, 2020 saw banks Mizuho, Sumitomo Mitsui, and Mitsubishi UFJ Financial Group announce restrictions on coal power investments.
In Korea, state financial institutions Korea Export-Import Bank and KSURE both stepped away from involvement in coal power projects, while Samsung corporation and the state-owned Korea Electric Power Corporation pledged no further investments in overseas coal projects.
The wave of announcements comes on the back of Singapore’s three major banks announcing an end to coal power financing in 2019, the report added.