As Southeast Asian countries continue to experience strong economic growth and improved consumer access to electricity, a rapid rise in electricity demand has prompted several governments in the region to plan large-scale coal-fired power capacity expansions to take advantage of the relative abundance and competitive price of coal resources available for regional consumption.
A shift towards a coal-dominated power sector in Southeast Asia is already underway, with coal plants accounting for more than half of the gross thermal capacity additions over the past five years. Indonesia, Malaysia and Vietnam account for the bulk of existing coal-fired generation with a combined 54 gigawatts (GW) of capacity, of which 91% features subcritical technology constructed after 2000. At present, more than 90 GW of additional coal capacity is planned in the three countries. If left unabated, and if planned capacity additions were to go ahead, existing and planned coal-fired power generation would lead to the long-term “lock-in” of high levels of GHG emissions.
While more efficient technologies play an important role in reducing the emissions intensity of coal-fired power generation, they are only part of the solution to improve the environmental impact of a power sector that is presently heavily dependent on fossil fuels – and increasingly on coal. Mounting environmental pressures will undoubtedly lead to a softening of the coal capacity targets, with a need for carbon capture and storage to be ultimately deployed. Improved energy efficiency and more ambitious implementation of clean energy technologies will be essential. Governments have a pivotal role in incentivising greater deployment of low-carbon generation by creating an enabling environment, together with private sector participation and international support.