News analysis from Frost & Sullivan (F&S) finds that Asia will be the main focus area for coal fired investment in the coming decade and beyond. The region’s projected growth in electricity demand, coupled with low production costs, is expected to make it attractive for both domestic and global investors.
China, for example, is expected to enjoy unprecedented growth with 945 GW and 1040 GW of total coal fired capacity in 2020 and 2030, respectively, while India is expected to have 201 GW and 267 GW of coal capacity in 2020 and 2030, respectively. Domestic power demand and capacity shortages will be the key market drivers for both.
Asia’s coal boom will also involve other countries in the region.
Indonesia and Vietnam, for example, will also emerge as major countries fuelling demand for coal fired generation. Japan and South Korea will offer limited prospects while Australia, which is rich in fossil fuel, will experience strong growth.
In contrast, the prospects for investment in coal fired power generation in Europe and North America are currently bleak because of the threat of tougher regulations, uncertainties over future carbon prices and the development of carbon capture and storage, rising engineering procurement and construction costs, and low gas prices.”
F&S believes these factors will deter investors from investing in new coal fired plants across both regions, with activity focused on investment in their existing base.
New coal investment will be minimal until the investment climate in both North America and Europe becomes more certain, F&S concludes.
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