Why Malaysia’s low emission coal model could be emulated across ASEAN

30th Apr 2018

Last week, I was in Malaysia, meeting with energy experts from many of the countries that make up the Association of Southeast Asian Nations (ASEAN). This trip was interesting for two reasons: firstly, Malaysia’s energy situation has a significant impact on the rest of ASEAN because it is one of the most advanced countries in the region. Secondly, Malaysia could serve as a model for others across the region in choosing to use coal with the lowest carbon emissions profile.

Energy is the foundation that supports and spurs the socio-economic development of a country. Development is not possible without energy and sustainable development is not possible without sustainable sources of energy. Therefore planning for future energy demand is crucial. Different countries have different approaches in how they will meet future energy needs. These approaches are influenced by various factors such as population growth, economic growth, energy prices and technological advancement.

Malaysia has the third-largest economy in Southeast Asia and is also the third largest energy consumer in the region. It has high per-capita energy demand – three times the region’s average, with its GDP growing at an average of 6.5% per annum for the last 50 years.

Malaysia’s urban population is experiencing one of the fastest growth rates in the region and it also has a burgeoning middle class that puts pressure on energy resources. Coupled with the country’s extremely hot and humid climate almost all year round, Malaysia’s need for electricity for cooling in major urban centres is expected to continue to increase. This helps to explain why Malaysia’s appetite for coal is on the rise.

Since 2000, there has being an increase in the role of coal in Malaysia’s electricity mix. Today the fuel makes up 25% of the country’s power mix; by 2040, coal is expected to make up almost 60%.

In Malaysia, 70% of the demand for coal is used for power generation. The remaining is used for industrial uses; coal is an essential raw material for steel production and the key energy fuel used in the production of cement, aluminium, glass and in other highly energy intensive materials, which are key to building modern economies and urban infrastructure.

Undoubtedly, a significant challenge for Malaysia is how to balance its fast-growing electricity demand while simultaneously pursuing objectives to reduce emissions.

Recognising that coal is going to remain a major fuel source for power generation, Malaysia is taking the necessary steps to develop and promote utilisation of cleaner coal technologies. The development of ASEAN’s first and largest ultra-supercritical unit in Malaysia is testament to the country’s climate ambitions. Manjung 4 is also Southeast Asia’s most efficient coal-based plant achieving an efficiency rate of almost 40%, surpassing the global average of 33%.

The ultra supercritical technology used at the plant generates power at a higher efficiency rate with significantly reduced emissions and related operational costs. Using low emission coal technology also prepares Malaysia for carbon capture, use and storage (CCUS) which is critical to its ultimate climate ambitions.

The meeting I attended focussed on how low emissions coal technologies, such as Manjung 4, can be deployed across the region. It was clear from the policy makers in the room that coal is going to play a growing role in Southeast Asia but that they are very keen to use the most advanced technologies. Challenges such as access to technology, finance and addressing legitimate public concerns about air quality were key discussion points. From an international perspective that means working with countries in the ASEAN region to help deploy the most advanced technologies, whether that be through sharing technology or developing more constructive approaches to financing for coal plants.

What was clear is that, even in scenarios where renewables and other energy sources grow faster than they are today, coal is also going to grow significantly across the region. That means the focus on low emission coal technologies is essential; and the international community should be working with ASEAN member states to support wider deployment.