May 13, 2020 Read More →

Thermal coal growth faces major headwinds in Southeast Asia

Asian Power:

Despite the positive medium-term outlook for thermal coal in Southeast Asia, the expectations for sustained decades-long growth for coal power generation is uncertain, according to the Institute for Energy Economics and Financial Analysis (IEEFA).

“There are an increasing number of technology, economic and financial headwinds which suggest the growth profile for coal is far less certain. The global deflationary renewable energy trends make this an ever more significant competitive pressure,” IEEFA’s director of energy finance studies Tim Buckley said. 

“Even where government policies are not supportive, finance can very quickly leverage this technology disruption, as Australia saw with solar tariffs dropping 70% in the three years from 2017 to average below $30/MWh by 2019,” Buckley noted.

Also playing a role is the impact of policy measures to address chronic air pollution. China has backed off their war on air pollution, but Taiwan and South Korea have taken up the mantle. South Korea, on the other hand, has dramatically stepped up their coal tax. 

There has also been a rapid shift in global financial markets away from coal mining and coal-fired power plants. IEEFA has found 134 big financial institutions that have introduced formal coal restrictions, divestment or exclusion policies.

IEEFA noted that this will have a long-term impact on the thermal coal export industries of Indonesia and Australia. “Future increases in coal demand in Southeast Asia look increasingly unlikely to offset the coming import declines in Japan, China, South Korea and Taiwan,” the report added.

[Staff Report]

More: Uncertainties loom over Southeast Asia’s thermal coal sector

Posted in: IEEFA In the News

Comments are closed.