EVENT COVERAGE: ASIAN POWER THERMAL ENERGY CONFERENCE
Bidding thermal power goodbye? It will be a long journey Asia’s 1.5TW coal-fired capacity is still at a ‘youthful state’, The Lantau Group’s Mike Thomas says.
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hilst emerging technologies are in place to support the energy transition, experts from various Asian countries argue that veering away from thermal energy, like coal, in Asia will take at least 20 more years as there is a need to ensure energy security. In Asia, China has the largest coal capacity at 1,050 gigawatts (GW), followed by India at 198.6GW. Overall, the region’s coal-fired capacity is currently at 1.5 terawatts, with most of its power plants at 15 years old and less. “I think given the youthful state of thermal capacity in Asia, If you think about the long goodbye, we're still talking about 20 years, [maybe around] 2040s,” Mike Thomas, managing director of The Lantau Group, said at the Asian Power Thermal Energy Conference. “Thermal capacity is essential to energy security, competitiveness of industry, and affordability of tariffs. If you want to speed that transition up, then it will cost more money. That's just a decision that needs to be taken,” he said, adding that most of the coal capacity is new, efficient, and super or ultra-supercritical design. Asian countries’ energy status In China, Thomas said coal capacity runs at an average utilisation of 50% and when there is more demand and there are fewer renewable energy sources such as hydro generation, coal will take over. “Usually, it's some other [energy source],
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Thermal capacity is essential to energy security, competitiveness of industry, and affordability of tariffs
like gas, or peaking capacity in other parts of the world. But in China, it's coal. So again, this fits the whole energy security call, viable supply chain, and financial sustainability. Everything has to fit together. You can have an energy transition, but everything has to be orderly along the way,” he said. China has recently undergone a power crisis wherein power rationing measures were imposed in 20 provinces from late September 2020. The reasons for the rationing vary per province but include strong power demand growth due to high industrial consumption and unseasonal weather. There was also insufficient domestic coal production which resulted in high coal fuel prices, leading to coal-fired generators being unwilling to operate their plants. There were also provincial restrictions and energy consumption and intensity to meet environmental goals, as well as poor generation from hydropower and other generation such as wind. Thomas noted coal is going to be sold in open markets where commercial and industrial power users are going to buy them. Thailand, meanwhile, is not a ‘coal country,’ mostly reliant on gas and growing renewables. Its commercial and industrial solar capacity grew 22% to its peak of 976 megawatts (MW). But Thomas said its limited coal remains and will only be out of its generation mix when it reaches the end of technical life or until the policy turns
‘antagonistic.’ Thomas also said that Vietnam’s peak electricity demand is expected to register a compound annual growth rate of 7.8% between 2025 and 2030. There is a significant increase in renewable energy, but there is still the building of some coal and gas. “It's very difficult because of the rate of growth to nudge conventional [power] out in Vietnam. The coal is actually mostly less than 10 years old, and quite a bit of this is just a little bit more than five. So we are talking about fairly efficient and very new coal plants,” he said. Malaysia, meanwhile, has pledged not to build new coal plants and there will be some coal retirements around 2030, he said. However, the existing coal base will only go down when the power purchase agreements expire. Coal remains important in energy mix Thomas noted that there may be an opportunity for existing coal to come back if there is a wholesale market or the plants can be phased out when the deals expire. It also depends on the emerging carbon policy. “But from a lifetime point of view, most of the coal will continue to operate in Malaysia through the end of the 2030s and into the early 2040s,” he said, adding that one of the reasons for this is that gas has been the marginal fuel. Thomas also said that the entry of solar energy can displace gas, whilst integration of more renewable energy can address coal. Coal also remains to be an important part of Indonesia’s energy mix, said Adaro Power CEO Dharma Djojonegoro. “I think Indonesia, at some point, has to come to a choice. whether we want to keep our very competitive electricity costs and therefore, still stick with coal, or no, we forgo this and we go to the other renewable energies? And I think we haven't gotten to the timing of that choice yet,” he said. In the Philippines, Frank Thiel, managing director of coal plant Quezon Power, said the Department of Energy, particularly Secretary Alfonso Cusi, recognises that coal and thermal power has to remain in the energy mix, with coal comprising 52% of the country’s energy mix. Thiel said that there is a moratorium against the building of new coal plants in the country but the around 3,500MW in the pipeline may proceed. Quezon Power has an existing power supply purchase agreement with Manila Electric Co., the power distributor in the capital region, that will expire in May 2025. Thiel said they will work on securing another PSA that will run for 20 years. If the bid will not be successful, Quezon Power will look for other alternatives, such as selling power to retail energy suppliers, or it will operate within the wholesale electricity market in the Philippines.
