ADVERTISEMENT

Coal-Fired Power Plant Construction Stalls in Southeast Asia, Report Says

Coal-Fired Power Plant Construction Stalls in Southeast Asia, Report Says

(Bloomberg) -- Construction of coal-fired power plants in Southeast Asia has slowed significantly since 2016, with only Indonesia starting any new stations in the first half of this year, according to a report by Global Energy Monitor.

The region, which has been targeted as a growth center in coming years for coal-fired power, saw 1,500 megawatts of capacity enter construction in the first six months of 2019, following 2,744 megawatts over the whole of 2018, according to the report, which is based on information from public sources, such as media articles and information from non-government agencies. That compares with a peak of 12,920 megawatts in 2016, it said.

Coal-Fired Power Plant Construction Stalls in Southeast Asia, Report Says

Construction starts are a strong indicator of the strength of the coal power pipeline, said Ted Nace, executive director of GEM, which is funded by a range of climate change advocacy groups. “To go into construction you have to get someone to commit hundreds of millions of dollars. In Southeast Asia, it looks like it’s becoming a difficult case to convince people to commit that kind of money,” Nace said.

The amount of coal plant capacity in the pre-construction stage has more than halved since 2015, GEM said in the report. With renewable energy increasingly undercutting coal on price and financial institutions backing away from the fuel, it’s likely that much of that pre-construction pipeline was canceled rather than implemented, the report’s authors said.

Southeast Asia has been seen as a potential growth market for big thermal coal producers such as Australia and Indonesia as other parts of the world move toward cleaner energy. The International Energy Agency has forecast coal-fired generation in the region to grow by around a third over the next five years to meet strong electricity demand growth.

To contact the reporter on this story: James Thornhill in Sydney at jthornhill3@bloomberg.net

To contact the editors responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Jasmine Ng

©2019 Bloomberg L.P.