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SCMP | Why coal should have no future in Southeast Asia’s energy mix

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The View by Pamela Simamora, IESR’s Research Coordinator

Growing energy demand in Southeast Asia is often associated with increasing coal use despite the region’s huge renewable potential. To help lower carbon dioxide emissions from coal power, some have tried to for “clean” coal technology in Southeast Asia.

However, we need to carefully define what clean coal is. It is true that ultra-supercritical coal-fired power plants emit less carbon dioxide given their higher efficiency than conventional coal-fired plants. However, to call them clean is misleading. Even at peak efficiency, they still emit far more emissions than natural gas power plants.

Furthermore, do not forget the air, water and land pollution from coal power that make it far from clean. In Southeast Asia, air pollution caused 450,000 premature deaths in 2018. That number is predicted to increase to 650,000 by 2040 if the region continues its coal addiction.

In addition to emissions, studies suggest new-build solar power across Asean will be cheaper than new coal power from 2020 onwards. Those studies also predict that members of the Association of Southeast Asian Nations will see unprecedented low prices of renewables; building new solar and onshore wind power will be cheaper than operating coal plants between 2027 and 2029.

Moreover, battery storage costs have plummeted in recent years, making solar power and storage increasingly cost-competitive with coal plants. Portugal’s latest solar auction hit a world record for the lowest output price, at US$0.0131 per kilowatt hour. At this price, renewable energy is superior in almost all aspects – affordability, reliability and sustainability.

Clean energy technologies such as solar photovoltaics, wind turbines and batteries have become more affordable and reliable in the past 10 years. Falling prices, together with massive renewable energy potential, have led Thailand
to target increasing its solar capacity to 6 gigawatts and wind to 3 gigawatts by 2036. This will add to its existing 2.9 gigawatts of solar and 1.5 gigawatts of wind power.

At the same time, Vietnam has aggressively developed solar capacity from only 106 megawatts in 2018 to 5.5 gigawatts in 2019, making it Southeast Asia’s solar development leader. Malaysia has developed a solar module manufacturing industry that employed 54,300 people in 2018. Meanwhile, the Philippines has been catching up with other Asean countries by deploying 922 megawatts of solar energy and 427 megawatts of wind energy in 2019.

Some provinces and cities across the region have committed to phasing out coal. Through these commitments, local governments wish to show that sustainable development in developing countries is both possible and viable.

Any plan to keep building new coal-fired power plants is a dangerous game that no country should pursue.

In Indonesia for example, Carbon Tracker projected in 2018 that phasing out coal power consistent with the Paris climate agreement would leave owners facing US$34.7 billion in stranded assets. Increasing coal capacity would only worsen the situation and lock Indonesia into coal infrastructure.

Risks from climate change and stranded assets are so real that more than 100 financial institutions from around the world have committed to divesting from coal projects, according to the Institute for Energy Economics and Financial Analysis (IEEFA). The increasingly limited access to finance makes proposals for new coal power in Southeast Asia even more puzzling.

Meanwhile, carbon capture and sequestration technology has obstacles to overcome to enable its widespread use. Two coal plants, Boundary Dam in Canada and Petra Nova in the United States, are often cited by carbon capture advocates as an implementation success story. The truth, however, is more complex.

Like any other technology, carbon capture systems need energy to run. Boundary Dam uses its own power to run its carbon capture system, lowering power output. Meanwhile, Petra Nova uses a natural gas plant to run its system, making the net emission reduction only about 70 per cent instead of the 90 per cent advertised.

ve. A UC Berkeley study warned that adding carbon capture systems to coal plants could expose them to water scarcity.

High cost is another barrier to carbon capture implementation. Estimates put the cost at around US$60 per tonne of carbon dioxide but, to be commercially viable, the cost must be closer to US$30 per tonne. A US Department of Energy study found that installing carbon capture systems at coal plants would drive up capital costs by 80 per cent to 86 per cent, translating into higher electricity prices.

While carbon capture technology has the potential to address emissions from industrial processes, its use at coal plants is unjustifiable when renewables are available at lower cost. Rather than how can carbon capture technology prolong coal use in Southeast Asia, the question to ask is: how can the region

transition towards carbon neutrality

by 2050 in a just and sustainable manner? Energy transition is a long, complex process that requires careful planning.

Early decisions to move away from coal will help markets make necessary changes and allow countries time to make plans to manage the transition’s impact. Too early, therefore, is better than too late. Asean countries should work together to help Southeast Asia enjoy all the benefits energy transition can provide.

Pamela Simamora is a research coordinator at the Institute for Essential Services Reform, a think tank focusing on energy transition issues in Indonesia

 

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