Asean coal power plant construction falls

The number of new coal power plants under construction across Asean has fallen over the past two years, causing fears for Australian exporters of the environmentally ruinous fossil fuel.

US-based climate group Global Energy Monitor reported that 1.5 gigawatts (GW) of new coal generation began in Asean in the first half of 2019, all of which was in Indonesia.

Across Asean, 53.4GW of capacity is listed as at pre-construction stage but 69.6GW has been cancelled since 2015.

Construction started on power stations with a capacity of 2.7GW in 2018 and there has been a 79-per-cent decline in building coal-powered capacity since 2016.

Australian exporters are now fearful that Asean demand for coal will not grow as anticipated by the government.

The Australian government’s chief economist reported last month that Asean would be a source of growth for coal exports as imports to Japan, China and South Korea, the main export markets, began to decline.

Australia’s thermal coal export earnings are tied to Japan with 45 per cent of sales, China at 16 per cent and South Korea with 15 per cent.

Asean coal imports rose by 15 per cent last year and it was the only region in which coal’s share of electricity generation reported an increase.

The Australian Conservation Foundation revealed that Australia’s Prime Minister Scott Morrison ahead of his August visit to Vietnam was “strongly recommended” to focus on boosting coal exports. Official advice said the potential growth in coal exports to Vietnam could “partially mitigate declining exports elsewhere, notably China”.

Vietnam is experiencing an energy supply crisis amid rising demand from the population and its booming manufacturing sector. Hanoi is also in dispute with Beijing in the South China Sea over large oil and gas reserves off its coast.

A future coal-fired plant in central Vietnam may be funded by Singapore’s DBS Bank, according to environmental groups.

DBS, however, announced in April that it would stop financing new coal plants after honouring existing commitments.

Japanese and Australian environmental groups, including Kiko Network and Mekong Watch, urged DBS to reconsider funding for the Vung Ang 2 project in Ha Tinh province.

The proposed plant is purportedly being sponsored by One Energy Ventures, a joint venture between Diamond Generating Asia – a Mitsubishi subsidiary – and China Light and Power.

DBS said it did not comment on individual projects.

Global Energy Monitor reported that Vietnam had the most coal projects at pre-construction stage within Asean, with 22.9GW in capacity proposed. But it also said 26.4GW of projects had been cancelled over the previous five years and work on just 1.5GW had begun since late 2016.

Coal use must end. Picture credit: Pexels