Jakarta. Coal is expected to play an increasing role as a stable, low-cost baseload of power source for member countries of the Association of Southeast Asian Nations (Asean), as natural gas is set to become less competitive with subsidies of the energy source being removed by authorities in the region, a report from the World Coal Association and Asean Center for Energy showed.
The report, released on Wednesday (17/05) and titled "Asean's Energy Equation: The Role of Low Emission Coal in Driving a Sustainable Energy Future," said coal is expected to overtake natural gas by 2030 to become the largest source of power in Southeast Asia.
"The International Energy Agency forecasts that the installed capacity of coal will increase nearly 150 percent from 2013 levels to 163 gigawatt by 2035, covering over 34 percent of total power plant capacity in the region," the report said, quoting a Paris-based organization.
"In terms of generation, the IEA forecasts a threefold increase in coal-fueled generation from 255 terrawatt hour (TWh) in 2013 to 920 TWh in 2035. As a result, the share of coal-fueled generation in total electricity generation is expected to increase from 32 percent in 2013 to 48 percent in 2035," it said.
The report cited another IEA data, which showed that over the past 25 years energy demand in the bloc has increased by over 150 percent, as demographics continue to change and the region’s economy more than triples in size.
IEA, an autonomous organization with missions to promote reliable, affordable and clean energy for its 29 member countries and beyond, estimated Asean's energy demand to rise by 80 percent to just over 1,070 million tonnes of oil equivalent (Mtoe), which is equivalent to three times of Japan's current total energy need.
"Thus, it is critical for Asean to determine the most sustainable way to fuel the growth. Voracious demand for energy presents challenges and opportunities for Asean as the region’s governments seek to deliver an energy mix that balances social, economic and environmental imperatives," the report said.
Southeast Asia has reportedly been experiencing sustained economic growth that has lifted tens of millions from poverty and driven the expansion of its middle-class. Over the same period the number of people without access to electricity has declined by two-thirds.
This development trend, according to the report "has coincided with the rapid development of coal-fueled electricity generation."
With the bloc's population forecast to rise to over three-quarters of a billion by 2040, cities in the bloc are projected to experience growth and population in urban areas is expected to increase.
Energy demand = need for affordable, clean energy
The report said that by 2040, urbanization and its related benefits are expected to lead per capita income to rise to $27,000 from $10,000 in 2013 and, following the path of newly industrialized economies, all of those factors will drive increasing energy demand — especially for affordable, clean energy sources.
The report said that since the link between economic growth, industrial development and prosperity is clear, countries within Asean would benefit from investing in low-emission coal technologies.
"It is important to inject realism into the debate on how to reduce emissions across Asia. There is no question that cleaner coal is the lowest-cost option among all available low-carbon technologies in Asean," World Coal Association chief executive Benjamin Sporton said during the report's introduction in Jakarta.
"Investing in low-emission coal plants in Southeast Asia is one of the most efficient strategies for reducing greenhouse gas emissions in the region," the report said.
In order to achieve this, the report suggested that Asean needs to transition into HELE (high efficiency low emission) coal technology, a modern alternative for coal-fueled power facilities.
HELE is projected to reduce the region’s cumulative emissions by 1.3 billion tons by 2035. The amount is equivalent to combined annual emissions from China, United States and the European Union.
The projection is in line with the goals of the Paris Agreement, which entered into force in November. It reflects current global commitment to reduce toxic carbon emissions and combat climate change. Beside Myanmar, all Asean member countries have ratified the agreement.
HELE technology will kick off progress to eventually adopt carbon capture and storage (CCS) technology, which according to the report is a vital technology required to meet global climate objectives.
CCS technology involves capturing carbon dioxide produced by electricity generation, which is then compressed for transportation to be injected into a rock formation, or alternatively used in industrial applications, for example to increase pressure in oil reservoirs.
The report also said that investing in HELE technology for sustainable electricity is a "more effective carbon reduction strategy than transitioning to renewables."
According to the 4th Asean Energy Outlook survey conducted by the Asean Center for Energy, Asean’s energy demand is expected to grow 2.7 times in the next two decades. In this scenario, coal continues to be a major contributor for energy in the region.
"With around 100 million people still without electricity, the delivery of affordable, reliable and sustainable electricity is crucial to Asean’s economic growth," Asean Center for Energy Executive Director, Dr. Sanjayan Velautham, said in a statement.
He added that modern coal technologies are "essential" to ensure that coal is used in a sustainable way to balance the region’s economic needs and climate commitments.