Wednesday , October 20 2021

Magnata declares condemned coal in Southeast Asia in the last bastion of big bank aid, Energy and Commodities



[ad_1]

Sat, May 18, 2019 – 13:59

[TOKYO] While Southeast Asia remains one of the last places where coal power can attract international funding, a rebel mogul believes the region will no longer tolerate the burning of the dirtiest fuel.

Sarath Ratanavadi, founder of the Gulf of Thailand energy development, is trying to electrify areas of the region using natural gas and renewable energy.

The billionaire, whose wealth rose about 22 percent this year, seeks to expand its reach to some of the poorer parts of Southeast Asia without using coal, where the need for cheap energy is expected to outpace environmental protection. the pursuit of economic development.

Although coal may be a traditionally cheaper source of electricity, avoiding air pollution and carbon emissions is worth the extra cost, according to Sarath.

And coal will lose its advantage even more as it becomes more difficult to get public approvals and cleaner energy becomes cheaper, he added.

"Expanding power generation capacity to keep pace with rising demand is not the only key issue for governments in the region," he said in an interview.

"Governments and the public in many countries are willing to pay higher electricity costs from more expensive sources, such as solar and wind, instead of risking possible pollution and public health threat" from coal.

At least 100 major funders in the past five years have placed restrictions on funding coal mines and fuel-fired power plants, the Institute for Energy Economics and Financial Analysis said in February.

But some banks are still keeping their options open for coal in Southeast Asia, while others plan to withdraw only after the completion of multi-billion dollar projects that will operate for decades.

While China consumes a lot more coal, Southeast Asia and India are among the few places on the planet where demand is likely to continue to rise as fuel has traditionally been the cheapest option to meet the growing energy demand of growing populations. class.

The CEO of Oversea-Chinese Banking Corp. (OCBC) Samuel Tsien said last month that two Vietnamese coal plants that the bank is helping to finance will be the last, as it will shift focus to renewable projects.

"We have to make sure that economic development in these countries and people's livelihoods will not be affected by the lack of funding for energy projects that they need," he said. The bank is one of the donors of the Nghi Son 2 and Van Phong 1 coal plants.

HSBC Holdings, which last year began to take a firmer stance against financing new coal-fired power plants, left a gap open until 2023 for projects in Bangladesh, Indonesia and Vietnam that meet certain criteria.

These nations are exempt from "balancing local humanitarian needs with the need to transition to a low-carbon economy," according to the bank's policy.

This exception for the most polluting fuel is becoming harder to bear amid dire warnings that the world must totally abandon coal power by 2050 to avoid catastrophic damage from climate change.

These forecasts are beginning to convince developers and investors to avoid coal, as pressure is expected to increase against fuel.

"The potential of coal-fired power plants is impaired or unproductive is increasing," due to lower-cost government policies and policies that will begin to favor renewable sources as well as disruptive technologies, analysts at Moody's Investors Service said. a report this month.

This change in coal will be slower across Asia than in advanced markets such as the US and Europe due to the fast pace of growth in energy demand, they wrote.

Gulf Energy plans to nearly triple installed capacity to about 6.7 gigawatts by 2024 from capacity last year, and the company said it plans to invest about 150 billion baht ($ 6.5 billion) in the next few years. years to build new plants in the southeast. Asia. The generator also had discussions with provincial officials in Vietnam about plans for a $ 7.8 billion gas-fired power plant as well as talks with partners for a hydroelectric project in Laos and a gas-fired power plant in Myanmar.

Gulf Energy gained about 19 percent this year, raising Sarath's net worth to about $ 4.8 billion, according to the Bloomberg Billionaires Index.

Mr Sarath said he had decided to adopt gas after the anti-pollution protests persuaded the Thai government in 2002 to suspend agreements for some coal-fired power plants. There is public opposition to coal mills in Myanmar and Vietnam as well, he said.

"Coal-fired power plants may have lower fuel costs compared to natural gas," Sarath said.

"But carbon emissions have become much more worrying."

BLOOMBERG

[ad_2]
Source link