4 Major Asian Nations Cancel 80% of Planned Coal Power Projects After Fossil Fuel Market Crashes in 2020
Indonesia, Vietnam, Bangladesh and the Philippines canceled nearly 45 gigawatts of proposed coal power projects, a figure equivalent to more than a quarter of Germany’s total installed capacity.
These are four critical emerging markets that were the growth target of the struggling coal industry, but a combination of issues related to the pandemic and financing caused them to shift towards considering more profitable and environmentally sound alternatives.
The year 2020 was as bad for coal as it was for healthcare systems, and a new analysis by Global Energy Monitor (GEM) shows that there will be no V-shaped stimulus or recovery for the black mineral.
After banks in South Korea and Japan, major Asian coal investors, announced new regulations on coal power development, plans that included 29 new plants in Bangladesh alone, for example, fizzled out.
“We are reviewing how we can move from coal-fired power plants,” said Bangladesh’s Energy Minister Nasrul Hamid. during a webinar in June 2020. He noted that they were maintaining three coal plants that are under construction, but they are targeting 40GW of total generation capacity where only 5GW are coal-fired.
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Thousands of miles to the east, Vietnam’s draft version of its Energy Development Plan, due to go into effect in 2022, included the cancellation of 7 plants and the freezing of 6 that were already in progress, to be reviewed again in 2030.
By November, the Philippines had proposed a moratorium on new coal projects, which GEM analysts estimate at a total of almost 10GW.
Secretary of Energy Alfonso G. Cusi famous That part of the moratorium was to urge 100% foreign ownership in exploration and geothermal projects. His nation already has the highest rate of renewable energy in the Greater Southeast Asia region and they project that solar power will rise to 35% of the energy mix by 2030.
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“I am determined to accelerate the development of indigenous resources in our country,” he said in a speech in Singapore during International Energy Week 2020. “We are also driving the transition from using fossil fuel-based technology to energy sources. cleaner to guarantee more sustainable growth for the country ”.
How everything happened
During the 2010s, it was estimated that while most of the developed world was on the verge of avoiding coal, the Asian strengths of Korea, Japan, Southeast Asia, and China provided the opportunity for a last golden age for the coal exporters.
But in early 2020, energy monitoring groups like Carbon Tracker were showing lawmakers that their planned coal plants carried a huge risk of becoming “stranded assets,” projects that would simply become too uneconomic to operate.
In a Carbon Tracker report titled: How to waste more than half a billion dollars, The authors showed that renewable energy sources had bitten market share so deeply that in all of the countries mentioned above, renewables were cheaper to build and operate than coal, nearly 10 years before new energy projects were completed. $ 600 billion worth of coal. .
In 2019, the top three banks in Singapore announced a complete end to coal power financing.
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Banks such as Sumitomo Mitsui in Japan and KSURE in Korea, along with their respective governments, reconsidered their financing route. Energy Tracker Asia reports that Japanese investments would depend on the country having “ultra-supercritical technology” and “having a decarbonization strategy.”
China remains the world’s largest investor in Asian coal projects, but its recent announcement of net zero suggests that while they have bolstered Cambodia’s coal resources, they will reduce their own dependence on the mineral.
Regardless of how monopoly governments spend their money, the reality is that both banks and thousands of investors around the world are make investment decisions based on climate reality, while the simple development of lower cost, higher quality technology driven by market innovation has rapidly brought renewable energy or liquefied natural gas up to speed with modern energy needs.
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