By 2040 Most of ASEAN’s Coal Power Plants Will Be Aged 28 Years, Ready to be Profitably Phased Out for Renewable Transition

• 2 October 2024
• Construction Focus
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Southeast Asia’s coal power plants could be profitably retired by 2040, aligning with global climate goals, as per a recent analysis by Global Energy Monitor (GEM). The study indicates that the region’s coal plants will average 28 years of age by 2040, approaching the global retirement benchmark of 36 years, which challenges the prevailing assumption that the fleet is too young to phase out, according to Global Energy Monitor (GEM) updated by solarquarter on 2 September 2024.

The report outlines that by 2040, 32% of the coal plants in ASEAN will be over 30 years old, with 25% aged between 25-29 years, 27% between 20-24 years, and only 17% under 20 years old. This distribution suggests that the oldest plants would have already recovered their investment costs, making their retirement and replacement with renewable energy economically sound.

Contrary to previous conclusions from the ASEAN Centre for Energy and the World Bank, which advocated for retrofitting coal plants with carbon capture and storage (CCS) or repurposing them for biomass or ammonia, GEM’s findings underscore the potential for a profitable transition to renewable energy if the development of new coal plants is halted.

Christine Shearer, Project Manager of GEM’s Global Coal Plant Tracker, emphasized, “The notion that Southeast Asian coal plants are too young to retire is a misconception. Our analysis shows that these plants will be old enough to be retired by 2040, making a transition to clean energy not just feasible but necessary.”

Currently, around 15 GW of coal power is in pre-construction, and another 15 GW is under construction, but the report advises against these expansions, highlighting the economic viability of retiring existing plants instead.

Paul Jacobson from the Institute for Energy Economics and Financial Analysis (IEEFA) supports this view, noting, “Coal power plants as young as 15 years old could be retired profitably by 2030-2035 with the right policy and financing framework. This transition could be achieved without increasing wholesale power prices if proper agreements are made to replace coal power purchase agreements with renewable energy contracts.”

GEM’s analysis provides a timely perspective as Southeast Asia faces mounting pressure to cut carbon emissions and embrace cleaner energy sources, underscoring the urgency for a strategic shift in the region’s energy planning. By halting new coal developments and focusing on a transition to renewables, ASEAN countries can align with the International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC) goals to limit global warming to below 1.5°C.

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