Page 8 - AsiaElec Week 45 2021
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AsiaElec COAL AsiaElec
China’s coal pledge threatens
43GW of planned capacity in Asia
CHINA UP to two-thirds of the world’s planned coal- local opposition and serious financing obstacles,
fired power plants could be shelved if China fol- making their completion increasingly unlikely.
lows through on its recent pledge not to build National energy policies had already made a
new coal projects abroad. dent in the coal pipeline, with over 5.3 GW of
Before China made the pledge in its updated projects in Indonesia having been cancelled or
NDC, over 65 GW of coal-fired power plants postponed by such plans.
were planned for construction in Asia outside Across Asia, several projects have been allo-
China and India. Beijing’s new commitment cated or securitised under national energy plans,
would leave just 22 GW of coal capacity on the but in the face of dwindling direct financing for
drawing board across the continent. new coal, these projects will likely require signif-
A new report from the Centre for Research icant government subsidies and private domestic
on Energy and Clean Air, together with Global financing to get built.
Energy Monitor, said that without Chinese China’s pledge solidifies a global financial
financial support most coal-fired power plants trend away from coal, as several private and
will struggle to secure the massive up-front cap- governmental institutions, most notably from
ital necessary for construction. Japan and South Korea, have made similar
If the remaining 22 GW of planned coal announcements.
capacity is cancelled, it would save over $27bn in Meanwhile, the report also highlighted that
capital costs that could be spent on zero-carbon there were 43 GW of coal projects in construc-
technologies, energy efficiency and grid expan- tion in Asia. The report viewed that this prospec-
sion and modernisation, the report said. tive additional capacity is already unneeded and
It would also avoid adding approximately risky to build.
103mn tonnes of CO2 emissions annually – the Looking ahead, the report said that coal
equivalent of Bangladesh’s total CO2 emissions financing will now be hard to come by and be
in 2019. risky for governments.
The impact of investors’ pledges on the pipe- Financial institutions have been wary of
line has been immediate: not a single coal power backing coal-fired power for several years, and
station in the pre-construction stage reached without government-backed public financing,
financial close in 2021. most projects will find it virtually impossible
This is a significant decrease from $11bn to raise the large up-front capital investment
invested in coal in 2020 and $10bn in 2019, the required for coal-fired power plants.
report said. Even if they can secure financing, the power
For some countries, such as Bangladesh and plants are unlikely to be profitable. Instead, they
Sri Lanka, the impact of China’ s announcement will tie many countries into capacity payments
is substantial, with nearly all coal-fired projects for what will likely be underutilised units, sap-
being cancelled. ping financial resources away from greener alter-
Of the 22 GW remaining in Bangladesh, natives for decades.
Indonesia, Laos, Pakistan, the Philippines, Sri
Lanka, Thailand and Vietnam, only one-third
have secured financing, and many are facing
P8 www. NEWSBASE .com Week 45 10•November•2021
