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Can ASEAN Run Away from Coal?

22 December 2014

By Beni SuryadiAll of the sources are saying the same story: Asia currently leads in global energy consumption increases. The ten members of the Association of Southeast Asian Nations (ASEAN) are – along with China and India – shifting the centre of gravity of the global energy system to Asia (IEA, 2013). And it doesn’t stop there, as, along with the expected moderate or even slower economic growth, the demand in Asia still continues to soar. Particularly in ASEAN where per capita energy is still lower than the world average and around one-fifth of its 625 million people are living without access to energy.

While effort has been made and continuously implemented and enhanced by ASEAN – on the regional and national level – in a cleaner way, all sources are also saying the same thing: developing countries in Asia, including in ASEAN, rely heavily on coal to fuel economic growth.

Today’s oil price slump is on a level that no one could have predicted. The new prices will bring the competitiveness of oil down among other types of fuel. However, with regard to fueling power plants, even in ASEAN, oil is no longer the majority choice, similar to what happened three decades ago. As recorded on ASEAN Energy Review and Statistics (ACE, 2013), in 2002, oil products fired power consumed only 14.63% of total fuel consumption in 2002 and even declined to 12% in 2011. During the period 2002-2011, gas-fired power plants dominated, however only fired power plants enjoyed the growing trend from 29.55% in 2002 to 39.54% in 2011.

With the current Power Development Plan (PDP) in each of the ASEAN Member States, ACE – an intergovernmental organization on energy in Southeast Asia – forecast that the composition of fuels for power generation, which was dominated by natural gas (around 48.45% in 2011) will be lead by coal under Business as Usual Scenario (69%) and Alternative Policy Scenario (67%).

This week, the International Energy Agency (IEA), through its Medium-Term Coal Market Report 2014, said that global coal demand is forecast to grow through 2019. Coal consumption worldwide is forecast to increase by 2.1% per year until 2019 (+772 Mtce), mostly via China (+471 Mtce), India (+177 Mtce) and ASEAN countries (+79 Mtce). The low price of coal, combined with the existence of large reserves, compounded by the non-existence of a carbon price, makes coal more attractive than other options.

ASEAN has been a net importer of oil since 1995, but still a net exporter of natural gas and coal. But, an internal study from the ASEAN Council on Petroleum (ASCOPE) on its Trans-Asian Gas Pipeline Masterplan mentioned that ASEAN will see a supply gap starting 2017. New prospects in Southeast Asia are located offshore in deepwater or as unconventional gas which is not easy to extract. But, as shown in the figure, ASEAN will continue to be an important player in the global coal market in the coming decades, backed by Indonesia as one of the world’s major producers and exporters. So, because it is cheap and with abundant reserves, going with coal is the natural choice for the region to fulfil its sharp increase in the need for energy for economic development.

To lessen the environmental impact of coal use, ASEAN must adopt all necessary measures to use coal in an efficient way and to prevent and reduce its environmental impacts. ASEAN would need to utilize the latest and most efficient and clean coal technologies. Even though many advanced technologies for environmentally friendly coal utilization have been developed, it has not been properly implemented due to financing and the limited technical knowledge of the region.

Recognising that coal is a major fuel source for the region, through its Joint Ministerial Statement (JMS) at the 32ndASEAN Ministers on Energy Meeting (AMEM) on September 23rd, 2014 in Vientiane, Lao People’s Democratic Republic, the region supported the ongoing efforts to address the increase in electricity demand, the reduction of greenhouse gas emissions, and the development of highly efficient coal-fired power plants in the region. Such efforts include the promotion of the adoption of Clean Coal Technologies (CCT), enhancement of technology transfers, and public financing. At the broader level, in cooperation with its +3 Dialogue Partners; China, Japan and Korea; the region also reiterated their collective call to step up efforts to develop cooperation programs, promote policies on CCT, such as high-efficiency coal-fired power generation, the upgrading of low-rank coal technologies, carbon capture and storage (CCS), coal gasification, coal liquefaction, and develop the industry in the region.

Because there is a big concern on the limitation of the public financial support for new coal-fired power plants (CFPP), during the 11th ASEAN+3 Ministers on Energy Meeting on September, 23rd, the Ministers also collectively decided to continue transferring technology and public financial support by developed countries and Multilateral Development Banks (MDBs) in order to develop and deploy highly efficient CFPP which can significantly address both the increase of electricity demand and reduce greenhouse gas (GHG) emissions in the region.

In the end, sources are all saying the same thing; it’s not about running away from coal, but figuring out how to utilize it environmentally.

Originally appear here

The views, opinions, and information expressed in this article were compiled from sources believed to be reliable for information and sharing purposes only, and are solely those of the writer/s. They do not necessarily reflect the views and opinions of the ASEAN Centre for Energy (ACE) and/or the ASEAN Member States. Any use of this article’s content should be by ACE’s permission.