Asia's coal-fired power generation threatened by headwinds

Financing restriction is just the tip of the iceberg.

Asia relies heavily on coal-fired power generation to meet its electricity needs, with over 60% of the power mix derived from coal. BMI Research believes that this trend will continue over 10 -year forecast period to 2024.

It expects coal to account for 59% of Asia’s total generation in 20 24, equal to 9,108 terawatt hours (TWh), forming an integral part of the power mix.

“Asia’s status as the global powerhouse for coal-fired electricity generation is supported by our key projects database, which collates major power projects in various stages of development across the world. The power project pipeline for Asia indicates that nearly 45% of the total power capacity under development in the region consists of coal-fired power capacity,” says BMI Research.

Coal will remain the dominant fuel in Asia’s power mix over the coming decade as countries continue to ramp-up their domestic coal-fired power capacity, but financial restrictions and public opposition are major hurdles.

The research firm however notes that there are a number of counter trends that could materialise and prevent the realisation of the coal capacity in the pipeline.

In particular, is the growing public opposition to coal projects in the region, financing restrictions on coal projects and increasing international pressure on the Asia region to reduce carbon emissions.

Some of these risks have already materialised, evidenced in the number of ‘delayed’ or ‘suspended’ projects in the pipeline.

According BMI Research, over 50 GW (roughly 14%) of coal capacity is either delayed or suspended - with reasons including environmental opposition and difficulties in securing financing.

Furthermore, BMI notes that China’s coal capacity pipeline has been reigned in over the last year as the government has taken steps to diversify the power mix away from coal.