Propelling ASEAN towards Clean Coal Technology

22nd May 2017

Coal, the most abundant and reliable energy resource, will continue to be the dominant energy source in power generation to meet the fast-growing electricity demand in the emerging economies of the Association of Southeast Asian Nations (ASEAN). Between 2015 and 2040, the share of coal in power generation is expected to increase from 32% to 42%, whereas the share of gas in power generation is projected to drop from 42% in 2015 to 37% in 2040 (Kimura and Han, 2016).

The increasing use of coal for power generation in ASEAN countries will lead to widespread construction of coal-fired power plants, which, without the use of the best available cleaner coal technology (CCT), would result in increased greenhouse gas and carbon dioxide emissions. Recognizing the need to use coal for power generations to meet growing electricity demands and to drive economic growth in emerging Asia, there must be a global initiative to finance CCT in order to use coal cleanly. Policy approaches must be reviewed; therefore, so emerging Asia can afford CCT and allow for more sustainable green growth across ASEAN and emerging Asia.

The dissemination of CCT technologies for the clean and efficient use of coal in the East Asia Summit (EAS) region is of pressing importance. A study conducted by ERIA on the strategic use of coal in the EAS region concluded that the application of inefficient technologies and ineffective environmental standards and regulations would lead to a waste of valuable coal resources (Otaka and Han, 2016). The study examined various technologies (ultra-supercritical [USC], supercritical, and sub-critical boiler types), comparing their thermal efficiencies, investment costs, maintenance costs, fuel consumption, and carbon dioxide emissions. It found that the use of highly efficient technologies such as USC would provide better economic returns in any coal price scenario (US$60/tonne, US$80/tonne, and US$100/tonne), and that the electricity produced by USC plants is cheaper and more affordable than the electricity produced with other conventional technologies.

Although USC technology is one of the best options to raise plant efficiency and reduce carbon dioxide and local pollution, such as nitrogen oxides and Sulphur oxides, many developing Asian countries still cannot afford this technology because its upfront investment costs are higher than those of conventional technologies. For example, some Southeast Asian countries have just recently started to use coal-fired power plants; but plant efficiency is only about 32%, very low compared with USC, which could raise plant efficiency up to 45%. In emerging ASEAN, additional capacity of coal-fired generation is likely to be built using both high efficiency and low efficiency of coal-fired power plants depending on countries’ environmental regulations and economic conditions.

This raises the question of how do we help developing Asia to afford the CCTs that are urgently needed? Construction of plants with conventional or sub-critical technology will be common amongst emerging countries in ASEAN such as Myanmar, Lao PDR, and Cambodia if they are unable to access USC technologies, and if support from developed countries is insufficient.

Cleaner coal technology, such as USC technology, involves larger capital investment than subcritical technologies. The higher upfront cost of CCT such as USC has been an issue for developers and investors. Lowering these costs is necessary and can be done through policy frameworks, such as attractive financial/loan schemes for USC power plants or through strong political institutions that can provide public financing for CCTs to emerging Asia, and international cooperation frameworks to ensure the deployment of CCTs, as they are crucially important for abating greenhouse gas emissions. Failing to reduce these costs would mean falling public financial support for CCTs in emerging Asia, resulting in the region’s use of non-Organisation for Economic Co-operation and Development (OECD) financing or other forms of financial support and, thus, greater use of low-efficiency power plants.

Some countries in ASEAN, particularly Thailand, have been embarking on CCTs by retiring their old conventional coal power plants and replacing them with ultra-supercritical coal power plants. But in Thailand the government was faced with huge protests from communities against coal-fired power plants. Thus, seeking public acceptance on cleaner use of coal through CCT technologies will be crucial. People are wary of new technologies because they are concerned about the environmental impacts of coal-fired power stations. Experiences in developed nations such as Japan could provide good examples for achieving public consensus on coal use by showing how CCT uses coal more efficiently; that it is much cleaner than conventional plants; and that emissions from plants using CCT are very close to that of gas-fired power plants.

Finally, community participation is essential, because it’s only through this that governments will choose technologies that are environment-friendly and sustainable for their community.

References:

Kimura, S. and P. Han (2016), Energy Outlook and Energy Saving Potential in East Asia 2016. Jakarta: Economic Research Institute for ASEAN and East Asia (ISBN 978-602-8660-94-5).

Otaka, Y. and P. Han (2016), Study on the Strategic Usage of Coal in the EAS Region: A Technical Potential Map and Update of the First-Year Study.

Downloadable at: http://www.eria.org/publications/research_project_reports/FY2014/No.36.html

The views expressed here are personal and do not reflect ERIA’s position.