SINGAPORE - As industrialists, environmentalists and government officials open discussions in Bali, Indonesia, about the importance of combating global climate change, there is still clearly a long way to go before the rhetoric translates into substantial change in carbon-intensive energy consumption patterns.
Underlining the gap between the environmental talk and commercial action is Asia's increasing reliance on coal to fuel large electricity generation expansion plans. Coal combustion
power generation is by far the largest volume emitter of carbon dioxide per megawatt (mw) of any fossil fuel - much higher than both natural gas and oil. Yet it is coal that is increasingly being turned to for base load power generation in most major Asian power systems, particularly in Southeast Asia.
It would seem that greenhouse gas issues have a central place on regional government agendas, with Indonesia hosting the United Nations Climate Change conference this week, following on the Association of Southeast Asian Nations' (ASEAN) leaders' declaration on climate change, energy and the environment at their summit meeting in Singapore a fortnight ago.
Yet so far these concerns have yet to have an impact on actual development plans for the electricity sector, as regional countries race ahead to power their fast economic growth. Consider, for instance, Vietnam, one of the region's fastest-growing economies. Hanoi's current power master plan includes 48,700 megawatts of new generation capacity that is set to come on line between 2006 and 2015. Of this, 25,890 MW, or 53%, is slated to be coal-fueled, 29% from hydropower and 13% from natural gas.
The additional generation includes imported power from southern China from a mixture of hydropower and coal-fueled generation and from hydropower in Laos. A further 120,000 MW is planned for between 2016 and 2025 and again coal use features prominently. These targets are colossal numbers, especially when measured against the country's existing capacity of just 12,000 MW. But it is what government planners believe is needed to sustain the country's current high economic growth rates.
Or, as another example, take Indonesia. Now with a total installed capacity of 35,000 MW, over one-fifth, or 7,460 MW, is currently coal-fired. But Jakarta now has plans underway to build 10,000 MW of coal-fired production through the support of Chinese contractors, equipment and finance. Indonesia has the most abundant coal resources in Southeast Asia, but also has large reserves of more environmentally friendly natural gas.
Natural gas was earlier expected to play a much larger role in Indonesia’s power generation expansion plans. Its development has been stymied by the slow pace of gas pipeline construction. About 37% of Indonesia’s electricity is now produced by coal, with the state utility, Perusahaan Listrik Negara, planning to raise that level to 66% by 2016.
Coal has also found favor in neighbouring Malaysia. The country's main power system on the peninsula - the power systems on the outlying states of Sarawak and Sabah are comparatively small - are largely natural gas-based. Government policy is now to diversify that environmentally friendly fuel mix to greater coal reliance, which in recent years has risen on peninsular Malaysia from less than a 9% share of the total fuel generation mix to 22.5% at present. Coal use is further projected in the Ninth Malaysian Development Plan to rise to 38.1% by 2010, with total installed capacity on the peninsula rising from 17,622 MW to 22,802 MW.
The power generation system in Thailand is also largely natural-gas based. But energy planners there want coal to play a larger role, given uncertainty over the future extent of the natural gas supplies available in the Gulf of Thailand and from neighboring Myanmar, which now supplies about 25% of Thailand’s power generation demand. An additional 30,000 MW of power is projected to be needed by 2021, on top of Thailand's present 26,000 MW capacity. Currently about 65% of Thai power is gas-fueled, while another 16% is fueled by domestic coal and a small volume by imported coal.
Unlike in other countries in the region, coal has proven a politically difficult option to implement in Thailand due to vocal and effective opposition from local nongovernmental organizations and community groups. Rather than fearing of climate change, these groups have been galvanized by the memories of a lignite coal-fired plant disaster in Lampang province in the early 1990s. The development of two planned coal-fired independent power projects has been scrapped and the Lamang issue continues to be an obstacle for new coal-fired developments. As a result, Thai planners have cautiously put forward just 2,800 MW of new coal-fired plants between now and 2021.
The Philippines is perhaps the only country in the region where government policy actually aims to reduce reliance on coal - or at least not to increase its percentage of the national fuel mix - through greater use of domestic natural gas and imported liquefied natural gas (LNG). Currently coal-fueled power represents 4,200 MW of the Philippines total installed capacity against the country's total 16,000 MW installed capacity.
Singapore relies increasingly on natural gas piped from Indonesia and Malaysia, and is not seriously entertaining coal as an option for expansion - though energy planners have not ruled it out. ASEAN's underdeveloped countries, including Myanmar, Laos and Cambodia, all have marginal power generating systems, though fast-growing Cambodia is turning to coal for the first time with a 200 MW plant under construction.
Few clean options
According to the US-based Union of Concerned Scientists, a 500 MW coal-fired power plant emits 3.7 million tons of carbon dioxide per year. Coal combustion plants incur the wrath of environmentalists because of their emissions - if not properly controlled - of sulphur dioxide, poisonous nitrous oxides, particular matter and mercury.
These of course can be mitigated to acceptable levels through various filtering technologies. A problem seen in China, for example, where coal is used on a massive and growing scale, is that these technologies are often not deployed in order to beat down costs. In Southeast Asia, governments generally have regulations in place which require coal-fired plant developers to mitigate polluting emissions.
Resorting to coal and the carbon emissions that its use as a fuel source produces can easily be condemned when set against the emerging apocalyptic dangers of global warming. So what can be done? Natural gas could be used to a greater extent in a number of places, but development is often slow and difficult because of the need to co-ordinate investments in pipelines and other supply infrastructure with the development of power plants - often representing a logistical nightmare.
Coal by contract, in comparison, is an easy fuel to obtain on short- or long-term contracts and can be shipped in from a variety of nearby suppliers, including producers in Indonesia's Sumatra and Kalimantan islands, Australia and South Africa. Additional natural gas could also be supplied from sources distant from major demand centers as shipped LNG. Northwest Australia has huge reserves of natural gas that could be drawn on, as could the huge gas reserves untapped offshore near Iran if the situation there was less politcally volatile and commercial conditions more conducive to project development.
Thailand is one country that is looking at more LNG imports to deal with its projected natural gas shortfall, as is reportedly Indonesia and the Philippines. But in comparison to coal this is still an expensive option, with LNG prices now at record highs. As with piped gas, LNG prices in Asia are generally indexed against oil, while contracted coal prices are increasing but generally much lower on a dollar per heat content basis.
Hence the region's governments face a cost-benefit challenge. While global attention is now focused on the power and other energy needs of the industrializing giants China and India, often overlooked is the large-scale demand in Southeast Asia in aggregate terms. The region, with upwards of 570 million people and comprising some of the world's fastest-growing economies, is expected soon to have electricity demand comparable on a per capita basis to North America or Europe and it is projected to expand quickly for many decades.
Perhaps Southeast Asia does not need to follow the energy-intensive paths followed in the developed world. But alternative patterns of energy use that still deliver acceptable standards of living will not be easy to achieve. Not surprisingly, nuclear power is now starting to emerge as a possible greenhouse gas friendly answer to the region's mounting energy conundrum. For instance, Vietnam plans 2,000 MW of nuclear capacity by 2015, Indonesia 4,000 MW by 2017 and Thailand 4,000 MW by 2020. Malaysia is also reported to be looking into the nuclear option.
Yet there are many economic, logistical and safety issues that will have to be addressed before the region shifts substantially towards more nuclear-generated power. And even if they do, new nuclear plants will for the foreseeable future only make a small dent in the region's projected energy needs. Indeed, if nuclear is to replace coal anytime soon as central fuel source in Southeast Asia, its safe development and least-cost planning will need to be co-ordinated closely across the region.
That would represent a true test of ASEAN's maturity and effectiveness as an organization and is at present still far beyond the scope of the climate change discussions now underway in Bali.Andrew Symon is a Singapore-based journalist and analyst specializing in energy and mining. He may be reached at