Fears of an Asian coal surge are overblown – study

Dirty power plants planned in China, India, Vietnam and Indonesia are unlikely to all be built, says think tank ECIU

Investors are warning coal miners to be prepared for climate policies (Pic: Peabody Energy)

Many coal plants planned in Asia will not be built, say analysts (Pic: Peabody Energy)

By Ed King

Predictions of a global coal surge may be over-stated, according to study of energy trends in China, India, Vietnam and Indonesia.

Together these four countries have plans for for 1,824 coal power plants, three-quarters of the total worldwide, and enough to trash hopes of limiting temperature rise to safe levels.

But analysis of approved energy projects in these countries by the London-based Energy and Climate Intelligence Unit (ECIU) suggests fewer than half of those will be built by 2020. The figure is likely to be closer to 500, according to the think tank.

Demand for coal power in China is crashing says the ECIU, due to over-capacity, air pollution concerns and a push for renewable power in light of last December’s Paris climate deal.

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“Some 123 gigawatts of new thermal capacity [in 2014 and 2015] appear to have made net zero contribution to electricity consumption, illustrating the chronic over-capacity,” says the report. “The country has more than 100GW of effectively idle capacity in thermal power.”

Climate analysts have long feared an Asian coal surge could derail efforts to limit carbon dioxide emissions, the main driver of global warming.

Last year CO2 levels leapt by the largest amount since records began, while average temperatures spurred by an El Nino weather event passed 1C above pre-industrial levels.

To hold global warming below 2C, as agreed in Paris, the International Energy Agency has said nearly all energy infrastructure from 2017 must be low carbon. Otherwise, dirty plants will lock in high emissions for decades to come.

The ECIU report suggests the outlook is more climate-friendly than it looks on paper. China’s coal use is falling and Vietnam has decided to review all coal projects. India and Indonesia still have big plans for coal, but there are reasons to think these won’t materialise as fast as expected.

(Pic: ECIU)

(Pic: ECIU)

With an estimated 240 million lacking grid access, India is adding 15-20 gigawatts of coal power a year.

The government wants to open 60 new mines and built several vast 4GW power plants across the country to meet growing energy demand.

(Pic: ECIU)

(Pic: ECIU)

Still, many existing coal plants are already under-used said the report’s author Gerard Wynn, who points out the Delhi government axed 390GW of projects from 2010-2015.

“The astonishing drop in coal-fired power generation in China tells its own story about an economy in trouble,” he told Climate Home.

“But it may be followed by lower than expected demand growth also in India, and possibly Vietnam. India will build new coal power plants, but it will never fill the gap in demand growth left by China.

“And meanwhile the story in solar is interesting. If India met a 100GW target by 2022, that may exceed coal capacity growth over the same period.”

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