Asia progressively transitions to clean energy; but coal energy remains significant
Renewable energy has been further accelerated in the Asia-Pacific region, according to the latest quarterly release of the IHS Markit Clean Power Additions Ranking (CPAR) for Asia Pacific. However, fossil fuel plants remain prominent and may jeopardise governments’ climate ambitions as US President Joe Biden hosts a global Leaders Summit on Climate on Earth Day 2021, with many Asian leaders attending.
By the end of March 2021, a total of 463 GW of new power generation projects were under construction in the region’s 16 key power markets. This was up 5% from the previous quarter, indicating more projects moving into construction phase than those that were completed.
The capacity mix of the under-construction projects did not change significantly from the previous quarter, with coal’s share down by 2% while hydro up by 2% in terms of share in the mix.
Australia’s announcements of solar PV and wind projects with a combined capacity of 4 GW, have contributed to its landing in top position in the Renewable Additions Index (RAI), and scoring 91 (or 91% of new projects at the different stage of planning is non-hydro renewables) in the second quarter, up 2 points from the previous quarter.
South Korea, which is on track with its 1.8 GW solar PV and 800 MW of onshore wind projects, rose to third from fourth place. The country installed a record 4.1 GW for solar PV last year and has already deployed 0.8 GW in the first two months of 2021.
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Taiwan, which announced a 0.6 GW of new solar PV project and a strong offshore wind pipeline, moved up to eighth from ninth. It is currently building 3 GW of offshore wind projects, which include Ørsted’s 900 MW Greater Changhua 1 and 2a Offshore Wind Farms.
Vietnam fell from third to fifth rank, mainly due to solar projects completion (about 1.6 GW) during the last quarter, but with fewer new renewable projects moving into the pipeline.
Meanwhile, new coal projects in the pre-construction planning phase have decreased by 6% compared with the previous quarter. In absolute terms, however, the capacity of coal-fired power being developed remains large: 190 GW under construction and 148 GW in pre-construction planning. These projects, if all brought online, would increase the region’s coal-fired power fleet by over 20%.
In the Philippines, India, and Vietnam, more than half of the power projects currently under construction are coal-fired. Even in developed economies like Japan and South Korea, coal accounts for 29% and 44% of all projects under construction, respectively. Singapore and Taiwan are the only two markets in the region that currently do not have coal projects being built or planned. Meanwhile, some mature economies still have coal projects in the pipeline from past planning.
On the other hand, gas-fired power accounts for 15% of new generation projects under construction in the region, a share that’s unchanged from the previous quarter, but representing a small increase in capacity. While new gas accounts for the majority of projects under construction in markets like Thailand, Taiwan, Bangladesh and Malaysia for baseload requirements, its role in other markets are less certain, especially those that have committed to net zero targets, i.e, China, Japan, and South Korea.
Overall, 68 GW of gas-fired capacity are under construction, led by China, India, Australia, and Japan in terms of capacity. Another 264 GW are in pre-construction planning, with most of them in China, Indonesia, and Australia, followed by South Korea, the Philippines, and Vietnam.
Accounting for a quarter of all power projects under construction, hydro and nuclear is playing an important role in meeting Asia’s baseload electricity demand with carbon-free energy.
Hydro is the largest source of low-carbon power among the projects under construction in the Asia Pacific region. In particular, Pakistan and Myanmar are ranked second and third, respectively, in the Low-Carbon Additions Index (LCAI), owing to the significant hydro capacity being developed. In Sri Lanka , 75% of power projects under construction are hydro.
Nuclear power is growing in a few regional markets. China, India, South Korea, Bangladesh, Pakistan and Japan are all actively building and/or developing new projects. Based on IHS Markit research, over half the world’s nuclear reactors under construction today are in Asia Pacific.
