As the global community advances toward cleaner energy, Asia’s coal-reliant giants are grappling with significant energy transitions. The largest continent, housing the world’s biggest coal fleet, faces the dual challenge of expanding renewable energy while managing traditional coal power.
Coal Power Dynamics in Asia
China, Japan, South Korea, and Indonesia, home to over a quarter of the world’s population, have collectively expanded their coal power capacity since 2020. Together, these nations contribute to 57% of the global coal-fired capacity projected to reach 2,143 gigawatts (GW) by 2024. Notably, China’s addition of 95GW alone constitutes nearly half of the European Union’s coal fleet and over half of the United States’.
Despite this growth, coal plant utilization hours in these countries have decreased, signaling opportunities to phase out less efficient plants. Meanwhile, renewable energy, particularly solar and wind, is on the rise, offering cost-effective and rapid deployment options.
Economic and Energy Policy Challenges
Each country’s economic structure and energy policy presents unique challenges in financing and managing coal phaseouts. The increasing renewable energy installations are predicted to reduce coal’s dominance in the energy mix.
Current Energy Landscape
Coal remains a significant part of the energy supply in China and Indonesia, where it constitutes over half of all energy sources. Japan and South Korea, reliant on imported fossil fuels, have made minimal progress in reducing coal dependency. Liquefied natural gas (LNG) usage has been relatively stable despite high costs.
In 2023, Japan and South Korea had higher gas-fired capacity shares in their fossil fuel generation compared to Indonesia and China. All four countries saw substantial increases in renewable energy. China’s per capita renewable energy generation rose significantly, driven primarily by solar and wind energy.
Coal Usage and Renewable Energy Transition
By 2024, China’s coal plants reported increased utilization hours, while Indonesia, Japan, and South Korea saw declines. However, Japan and South Korea increased their coal power capacities during this period.
Ultra-supercritical (USC) coal plants, expected to operate at higher utilization rates, show lower actual efficiencies, indicating potential overcapacity in coal infrastructure. This paves the way for retiring older, inefficient plants as renewable energy additions continue.
China’s Renewable Energy Expansion
China has made significant strides in renewable energy, with wind and solar comprising 42% of its total power capacity by 2024. Recent global developments have highlighted China’s dual role as a climate leader and coal capacity expander.
While coal capacity continues to grow, the country has also rapidly expanded solar and wind capabilities. This dual approach serves as a hedge against fluctuating hydropower availability and supports renewable energy prioritization through flexible coal plant operations.
However, challenges remain, such as transmission constraints limiting renewable energy utilization. Despite these hurdles, China’s investment in renewables and tariff adjustments indicate a shift towards cleaner energy sources.
Indonesia’s Coal and Renewable Energy Challenges
Indonesia, a leading nickel supplier, heavily relies on coal, which accounted for 56% of its power capacity in 2023. The nation’s energy transition faces regulatory challenges and the need to mobilize significant financial resources through initiatives like the Just Energy Transition Partnership (JETP).
Indonesia’s growing coal capacity is partly driven by captive coal plants supporting industrial activities. These dynamics complicate efforts to scale renewable energy without significant policy reforms and investment incentives.
Japan and South Korea’s Energy Transition
Japan’s energy mix in 2023 included 34% coal and 36% gas, with renewable energy at 23%, primarily due to solar power advancements. The nation’s energy strategies emphasize direct investment in fossil fuel development abroad. Transitioning to renewable energy could mitigate risks associated with fossil fuel reliance.
In South Korea, coal and gas made up significant portions of the energy mix, with renewable energy at 23% in 2023. The country faces a “power tariff trilemma,” balancing energy security, competitiveness, and sustainability amidst rising electricity costs due to LNG dependence.
South Korea’s energy policy has aimed at expanding LNG infrastructure despite underutilized existing facilities, highlighting the need for strategic shifts towards renewable energy sources.
Conclusion
Across Asia, the push toward renewable energy is gaining momentum, yet the transition remains fraught with challenges. While coal continues to play a dominant role, the economic and environmental benefits of renewable energy drive countries toward a cleaner, more sustainable future.
With varied progress and strategies, these nations are navigating complex energy landscapes to achieve their climate and economic goals.
Original Story at ieefa.org