Asian demand for coal waning: report

CLAIMS that Asia is on the verge of a huge expansion in coal burning for electricity generation are incorrect, says a new report by the Energy and Climate Intelligence Unit, which contradicts statements made by the Minerals Council of Australia this week about growing demand for Australian coal in Vietnam.

Lou Caruana

The report, Asia’s Tigers: Reconciling coal, climate and energy demand, argues that the Asian Tiger economies with the world’s four biggest coal power project pipelines, China, India, Indonesia and Vietnam, are likely to build far less than half of their current planned coal plants.

The four “Asian Tigers” have 1,824 plants either in planning or under construction – more than two-thirds of the world total. But the report concludes that the number actually built in the next five years will fall far short of 1,000 plants, and is likely to lie in the region of around 500.

In addition, the proportion of time for which coal plants in both India and China are actually being used is falling, so increasing capacity does not necessarily mean increasing coal-related emissions. In China, coal burning is falling even as new plants come online, according to the report.

The report’s author Gerard Wynn, consultant at GWG Energy, said: “These findings suggest that claims of an Asian coal boom that will derail climate change pledges made at the recent Paris summit are wide of the mark.

“In fact, the evidence suggests that the shift away from the dirtiest fossil fuels in favour of cleaner forms of energy is happening much faster than anyone could have expected.

“The report’s assessment of new capacity that will be built may even be an over-estimate once the Paris Agreement comes into effect, as it will further restrict financing for new coal projects.”

This week Minerals Council director of coal Greg Evans said demand for high quality Australian coal will continue to increase in Asia as coal-fired electricity continues to play a critical role fuelling inexpensive, reliable electricity generation in the region.

Evans referred to figures by Platts which show a 538.8% increase in Vietnamese demand in February 2016 compared to February 2015.

The successful conclusion of the Paris climate summit last December is expected to accelerate existing investments in energy efficiency and low-carbon generation, and also restrict available financing for global coal projects.

The Paris Agreement confirms that $US100 billion per year will be available for developing nations, much of which will assist them to enact their full climate and clean energy pledges.

Vietnam announced that as a result of the agreement it is reviewing its coal expansion plans.

Director of the Energy and Climate Intelligence Unit (ECIU) Richard Black said: “This report belies the notion that coal will be forever King in Asia, further undermining the already spurious argument that there’s no point in countries such as the UK reducing carbon emissions because cuts will be obliterated by China and India’s coal burning.

“Asian countries will build new some new coal-fired power stations, but lack of finance, air pollution, the growth of low-cost renewables, the Paris factor – all suggest that the total will be far less than the headline figures imply.”

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