IEA forecasts coal-fired power to overtake gas in Southeast Asia

The International Energy Agency (IEA) has produced its Southeast Asia Energy Outlook this week at a gathering in Bangkok and the report forecasts that coal power will soon outstrip gas-fired power as the dominant fuel for producing electricity in the region.

“A comparison of electricity generating costs demonstrates a strong competitive advantage for coal-fired plants under a wide range of coal and gas prices,” the report said. While coal has the edge, gas will remain the second-biggest source of generation, it added.

Maria Van der Hoeven
The 10 members of ASEAN, with energy demand growing at more than twice the global average, will get 49 per cent of their power from coal by 2035, up from 31 per cent in 2011. The share from gas will drop to 28 per cent from 44 per cent.

“Coal is emerging as the fuel of choice because of its relative abundance and affordability in the region,” Maria Van der Hoeven, executive director for the IEA, said in Bangkok. “As long as fuel-price differentials continue to favour coal over gas by a significant margin, Southeast Asia‘s incremental power generation is set to be dominated by coal.”

While the trends support plans by Indonesia, the world’s top exporter of thermal coal, to almost double output by 2035, emissions linked to climate change will increase at the same rate, the IEA forecasts. Coal, which emits about twice as much carbon as gas, is the fuel source for about 75 per cent of power-generating capacity being built by members of the Association of Southeast Asia Nations, according to the report.

Van der Hoeven added that the unique economic environment shale gas has in the US is unlikely to be replicated in other regions. “The U.S. shale-gas revolution can’t be copied elsewhere. Geological and logistical constraints means output from shale won’t be significant in China before 2020”, she added.

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