Asia’s Coal Addiction Seen Growing Despite Promises on Climate

(Bloomberg) -- Asia's demand for coal is likely to increase for years to come even though countries including China, Japan and India have agreed on steps to limit fossil-fuel pollution damaging the climate.

That's the conclusion an analysis of Bloomberg New Energy Finance delivered at its conference in Shanghai on Wednesday. The charts below from a presentation by BNEF founder Michael Liebreich show the impact China's coal consumption will have on the world's climate goals.

With envoys from 190 nations gathering next week in Morocco to advance the emissions-curbs agreed to at a landmark United Nations conference in Paris last year, the BNEF findings show that the world remains far from its goal of reining in the threat of global warming. At the same time, clean-energy investment is set to drop.

“Clean energy investment will be down 15 to 20 percent this year,” Liebreich said in an interview in Shanghai. “As things stand, it will not bounce back to a new record in the next five years” because of sluggish economic growth, moves by policymakers to reduce costs and the falling price of wind and solar equipment.

Coal Use Is Rising Quickly In Asia

The slide above based on data from BNEF and the International Energy Agency shows coal use in Asia (on the right) continuing to rise while it drops markedly outside the region.

China Still Adding Coal Plants

A common refrain is that China builds two new coal plants a week. That's still true despite efforts by policymakers to rely less on coal for power generation and as growth in demand for power slides. The above chart shows that BNEF's outlook sees China's rate of building coal-fired power stations falling from two to one in the next five years.

But China could do more. The red dotted line shows that coal-fired power plant construction could be cut to zero in China by 2020 and yet the nation could still fulfill all its power demand needs easily, Liebreich said.

Japan Is Replacing Nuclear Plants With Coal

Japan is pushing ahead with new coal-fired plants based on an assumption that power growth will continue for the next 15 years. The chart shows an increase in coal generation capacity after 2020 -- and BNEF's forecast that electricity demand will ease in the next decade.

“The utilities are seeing how difficult it is to restart the nuclear power stations after Fukushima, so they've decided to build coal,” Liebreich said.

Coal Is Threatening the UN Goal on Global Warming

Coal use is rising too fast and renewables too slowly to remain consistent with the climate agreed to through the UN talks.

“If Asia keeps building coal-fired power stations, then there is no way of sticking within a carbon budget consistent with 2 degrees,” he said.

To contact the reporter on this story: Reed Landberg in London at landberg@bloomberg.net. To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Iain Wilson, Jonathan Tirone