Opportunities for Asia’s coal phase-out

This briefing by Zero Carbon Analytics examines the financial and technical viability of phasing out coal-powered electricity in Asia. It argues that prioritizing the cessation of new coal projects is critical, as most existing plants will have recouped their investment costs by 2040. The document critiques co-firing as an expensive and inefficient alternative to retirement and highlights innovative financing models—such as renewables bundling and PPA replacements—that can make early retirement financially attractive. It emphasizes the need for concessional financing from developed nations to ensure a just transition for coal-dependent communities.

• Prioritizing the cessation of new coal plants is essential for a cost-effective transition. If no new coal is added, 90% of Asia's coal fleet will be over 20 years old by 2040, a threshold after which plants have typically recovered their initial investment costs and are easier to retire.
• Co-firing coal with ammonia or biomass is presented as a high-risk, low-reward strategy. Ammonia co-firing at a 20% rate leaves 80% of emissions intact, reduces thermal efficiency by 12%, and increases both capital and operating expenditures. Biomass co-firing risks significant deforestation; for example, replacing 10% of coal with wood in Indonesia's largest plants could cause deforestation 35 times the size of Jakarta.
• Innovative financing models can make early coal retirement financially viable. One model replaces private coal power-purchase agreements (PPAs) with renewables and storage PPAs, tying new capacity to decommissioning. Another model, tested on Chinese-sponsored plants in Vietnam and Pakistan, shows that refinancing combined with renewable energy investments can more than triple the enterprise value compared to original PPAs.
• The transition to renewables in Southeast Asia is expected to lower the average cost of electricity from approximately USD 120 per megawatt hour (MWh) currently to under USD 100 per MWh by 2035 and USD 80 per MWh by 2050.
• A just transition requires a combination of top-down and bottom-up strategies, supported by concessional and multilateral financing from developed countries. This includes establishing dedicated governance structures, conducting livelihood impact assessments for workers, and investing in the diversification of local economies to mitigate the socioeconomic effects of plant closures.
• Asia's energy mix is shifting, with coal's share falling from over 50% in 2010 to approximately 38% in 2023, driven largely by the rapid growth of solar power, which grew at an average of 50% year-on-year during that period.

APA

Team, Z. (2024). Opportunities for Asia’s coal phase-out. Zero Carbon Analytics. https://zerocarbon-analytics.org/energy/opportunities-for-asias-coal-phase-out/

Chicago

Team, ZCA. Opportunities for Asia’s coal phase-out. Zero Carbon Analytics, 2024. https://zerocarbon-analytics.org/energy/opportunities-for-asias-coal-phase-out/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=Opportunities for Asia’s coal phase-out |publisher=Zero Carbon Analytics |date=11 November 2024 |url=https://zerocarbon-analytics.org/energy/opportunities-for-asias-coal-phase-out/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2024opportunities, author = {Team, ZCA}, title = {{Opportunities for Asia’s coal phase-out}}, institution = {Zero Carbon Analytics}, year = {2024}, month = nov, url = {https://zerocarbon-analytics.org/energy/opportunities-for-asias-coal-phase-out/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }