Urban background solar panels, Shanghai, China. Photo: iStock
Solar panels, Shanghai, China. Photo: Asia Times files / iStock

Innovation and pragmatism may prove to be crucial allies over the next few years as the energy requirements of emerging economies in Asia continue to surge, according to the authors of a new report by the International Energy Agency (IEA).

The Coal 2018 report shows that while established economies like Europe and the United States are sidelining coal in favor of gas and renewable energy, emerging markets such as India are banking on the fossil fuel as a platform for scalable growth. And, while the evidence points to the eventual phaseout of coal-fired power generation, the report suggests that only by deploying new, energy-efficient technologies in existing plants can governments support increased global energy demands in the short term, at the same time tackling the issues that are driving climate change.

Coal is fueling policy debate

IEA predictions that the market for coal will remain net-stable over the next five years actually mask significant swings in the pattern of global usage. In reality, marked declines in consumption in China and the West are likely to be matched by an equivalent upsurge in demand from India and Southeast Asia as urbanization and industrial development continues apace.

At the moment, a quarter of the world’s coal is used to produce electricity in China – a figure that’s set to fall as Beijing starts to take clean-air measures more seriously and switches its focus from industrialization to expanding its services-based economy. Meanwhile, thanks to its rapid and continuing process of electrification, India looks set for a sharp rise in coal consumption. In fact, the IEA is forecasting an increase in annual demand equivalent to 150 million tons of coal by 2023.

Demand will also rise by around 5.7% as a whole across Southeast Asia, where countries are busy investing in new coal-fired power plants. The populations of Indonesia, Pakistan, Bangladesh, the Philippines and Vietnam currently boast a per-capita annual electricity consumption figure that’s circa one-seventh of that in Western nations. The level of coal-powered electricity generation in this region is predicted to rise to 538 TWh by 2030: this represents an increase of more than 30% on current figures, dwarfing growth in renewable and other sources.

Limiting impact of emissions with technology

As emerging economies turn to coal for the energy independence necessary for growth, the implementation of new technologies could have an important part to play in slowing the rate of climate change. It’s an issue that was under the microscope at the recent COP24 meeting in Poland, where the US government held a technologies panel event designed to look at ways in which innovation can actively help to counter the negative environmental effects of fossil fuel usage.

Using the same rationale, the IEA report also argues for the wider implementation of technologies such as high-efficiency, low-emission (HELE) coal-fired plants and carbon capture, utilization and storage (CCUS) methodologies, claiming that marrying “strong policies with innovative technologies” is likely to yield the most sustainable results. HELE plants produce power more efficiently and with fewer emissions, while CCUS helps power plants to burn coal more cleanly, at the same time reducing nitrogen oxides (NOx) and other pollutants. However, the report also acknowledges that carbon capture projects are few and far between in developing nations because of high capital costs, as well as a lack of funding from institutional finance sources like the World Bank.

Stark choice between growth and compliance

As a result, while CCUS represents an opportunity to deliver “clean” industrial growth, the technology isn’t yet being deployed on the scale necessary to slow the rate of global warming. It’s a problem that’s especially acute in India and Southeast Asia, according to a recently released report by a group of researchers from the Massachusetts Institute of Technology (MIT).

The team analyzed emission levels in the 10 member states of the Association of Southeast Asian Nations (ASEAN), which showed that the region was currently around 400 Mt short of its 2030 carbon emissions target. Simply put, ASEAN would need to reduce its combined emissions by 11% to get back on track – more if the current trajectory is maintained. It’s a figure that’s increasingly difficult to reconcile with the predicted doubling of consumption that would be required to meet the region’s energy requirements in the next decade or so.

ASEAN member governments believe that coal is essential to sustain growth, even as they recognize that there’s a balance to be struck between fueling the economy on the one hand and protecting public health and the environment on the other. Currently, too much of the region’s coal capacity comprises inefficient, and polluting technologies, with only two HELE plants in operation across the whole of ASEAN. It’s perhaps unsurprising: HELE technologies aren’t cheap and it’s difficult for hard-pressed economies to justify CCUS as anything more than a strategic consideration at this point.

Too little, too late?

Inaction isn’t an option, however: it’s already too late to wait for the expected decline in global coal use post-2023. International policymakers must act now to promote innovative technologies to help minimize the impact of coal use in the interim. The schism that has emerged between those countries choosing to limit the use of coal and those – including ASEAN nations – who see it as the only affordable route to economic success, has turned the subject of emissions into a political hot potato.

Technologies such as HELE and CCUS may provide a bridge between these two worlds – but only if governments grasp the nettle and commit to the level of deployment necessary to secure a sustainable energy future. By implementing these technologies more widely in Asia’s emerging economies, policies that promote cleaner power generation could begin to have real traction and the worst effects of climate change may still be averted.

Jon Connars is an American investment risk analyst and researcher currently shuttling between Singapore and Bangkok with expertise in the ASEAN region. He has been featured in The Hill, The Diplomat and Asia Times.