The average age of a coal power plant in the Association of Southeast Asian Nations (ASEAN) will be 28 years by 2040, according to a new analysis by Global Energy Monitor (GEM), meaning it can be profitably retired under the right policy conditions before the year in which developing countries should phase out coal.
The analysis challenges previously held assumptions that coal power fleets in ASEAN countries are too young to be retired, with this age near the current global average retirement age of 36. The findings of the report highlight ASEAN members’ ability to transition away from coal power generation by 2040, as recommended by the International Energy Agency as well as Intergovernmental Panel on Climate Change modelling to keep global warming below 1.5°C.
“Those calling for repowering or retrofitting existing coal power plants to co-fire with biomass or ammonia have no justification to do so, as the ‘young Southeast Asian coal fleet’ will soon be a fiction. Despite arguments to the contrary, ASEAN coal plants will be old enough to be retired by 2040,” said Christine Shearer, Project Manager of GEM’s Global Coal Plant Tracker. “Energy transition from coal to clean is a complex process, but our analysis shows that the age of Southeast Asian coal plants as a barrier is simply a misconception.”
GEM’s analysis challenges conclusions made by the ASEAN Center for Energy and World Bank implying that southeast Asian coal power plants are too young to retire and therefore must be repurposed by retrofitting carbon capture and storage (CCS) technology or by repowering them to run on biomass or ammonia.
“ASEAN countries should stop building new coal power plants and avoid further investment in repowering existing coal power plants. Any further developments either increasing coal capacity or expanding the life of existing coal power plants will only make energy transition more difficult,” added Lucy Hummer, a Researcher at Global Energy Monitor.
ASEAN countries have about 15 gigawatts (GW) of new coal power capacity in pre-construction phases and another 15 GW under construction. It is essential for ASEAN countries to cancel new coal power plant projects on an urgent basis in order to stop exasperating an already challenging situation.
If ASEAN countries stop expanding coal capacity, less than 20 GW of its coal power capacity will be under 20 years of age by 2040. Under the right policy conditions, these plants could meet the criteria for a profitable transition to renewable energy.
Older coal power plants are usually cheaper to retire since they would have recouped investment costs. However, a recent IEEFA analysis authored by Paul Jacobson highlights coal power plants as young as 15 years in age could be profitably retired as early as 2030-2035, under the right policy and financing framework. The report indicates that there could be as many as 800 coal-fired units with the right conditions to make this switch, many of which are in Southeast Asia.
“My report provides evidence that coal power plants 15 years in age or older could be profitably retired as early as 2030-2035, under the right policy and financing framework. This requires effort to be put into developing and structuring such a phase out with agreements that replace private coal PPAs with new renewable energy PPAs. Analysis indicates that the costs of such a transition (including coal phaseout, new renewables construction, storage capacity construction, and grid upgrades) would NOT increase wholesale power prices, should policy and other conditions be suitable,” said Paul Jacobson, author of the IEEFA report.
