According to a report by Wood Mackenzie. Coal will continue to be the dominant fuel source in power generation. Peaking at 2027 before slowing down and accounting for 36% of the region’s power generation mix in 2040.
By then, total power demand in Southeast Asia is expected to double from 1.05PW/h in 2018 to 2.46PW/h. To meet the rapidly increasing power demand, Southeast Asia will have to invest an average US $17billion/yr in power capacity. Coal should for most of this investment in the medium term, before being overtaken by spending on gas-fired generation. By 2034, investments in solar and wind power plants should surpass that of gas power plants.
Incremental coal will decline over time as the cost of renewables and pressure on environmental grounds increases. By 2040, solar and wind power plants will lead in the region’s power capacity mix at 35% or 205GW.
“Collectively, investments in wind and solar power supply makes up 23% of total power investment, amounting for more than US $89billion from 2019-2040. This is despite renewables being less cost-competitive in the region compared to the rest of the world, and Challenges such as land acquisition and intermittency issues.”
Said Jacqueline Tao, Research Associate, Wood Mackenzie.
Often touted as a transition fuel, the percentage of gas in the regions should remain flat at about 30% through to 2040. Southeast Asian total gas demand will from 14 billion ft3/d today to more than 23 billion ft3/d by 2040. This is Supported by the continued infrastructure expansions in Thailand, Vietnam and Indonesia.
Tao said “Driven by strong economic growth, burgeoning population and developing middle class, power demand in Indonesia and Vietnam, could rise three-fold to 1.44 PW/h in 2040. Together these two markets will account for almost 60% of Southeast Asia’s power demand.”
The demand for gas continues to grow. The outlook of gas supply in the region remains largely constrained as many of the mature fields are going into decline. The first half of 2019 saw three large gas discoveries in the region. Which may lead to a revival of exploration interest and CAPEX spend in the region. However, it is unlikely to arrest the decline from mature fields.
Southeast Asian countries are expected to import more than 100 million tpy of LNG by 2036. This represents almost a 10-fold from the 10 million tpy imports 2018. Substantial investments in regasification infrastructure will be required to enable this volume of LNG to enter Southeast Asian markets.
Article courtesy of World Coal Magazine.