Coal demand resilient in Asia even as renewables pick up pace – IEA
Coal demand in Asia will grow in coming years primarily due to its affordability as the region needs to power up its fast-growing economies, a director of the International Energy Agency (IEA) said.
The region will continue to see widespread use of coal, increasing carbon emissions, even as renewable power resources become cheaper and increasingly more feasible, Keisuke Sadamori, IEA director for energy markets and security said.
Coal’s share in the energy mix will increase in Southeast Asia, but coal demand will also increase in other parts of Asia such as India, Pakistan or Bangladesh, Sadamori said.
“Even in China they might have stopped growing strongly but they are not going down so easily. Coal is rather resistant because it’s affordable. Of course renewables are growing but we still do need the conventional power generation to provide flexibility to the system.”
Demand in Southeast Asia is projected to rise steadily over the next two decades, largely fuelled by new coal-fired power plants, the agency said in its annual outlook for the region.
“All countries face substantial challenges in achieving the sustainable development path. But, here in this region, economic activity is a lot more dynamic than other regions,” Sadamori said on the sidelines of the Singapore International Energy Week.
“Economic growth is fast, while the population is also growing. That inevitably leads to increased energy demand. So in that respect, reducing CO2 emissions and environmental impact would be a lot more difficult.”
Renewable energy is set to play a larger role, but the share of renewables in power generation would rise only to 30% by 2040, from the current 24%, the IEA said.
“Renewable growth depends on policies and market frameworks… All in all, there’s enough potential (in the region) but what’s needed is strong policymakers’ action,” Sadamori said.
But growing reliance on imports raises concerns about energy security, the IEA said.
Talking about overall energy security in Asia, especially in the aftermath of an attack on Saudi Arabia’s oil facilities last month, Sadamori said maintaining a high level of reserves is crucial for oil markets.
“I think this was a very strong wake-up call for the importance of oil supply security… At this moment, OECD stocks are close to 3 billion barrels, and there exists an additional 1.6 billion barrels in emergency response reserves held by IEA member countries, Sadamori said.
“Existence of those reserves helped the market from falling into a panic reactions.”
Source: Reuters (Reporting by Koustav Samanta; Editing by Florence Tan & Kim Coghill)