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Dear IEEFA Asia Community, Welcome to the latest edition of the IEEFA Asia newsletter. As we dive into another month of pivotal developments in Asia's energy transition, our team has been at the forefront of research and analysis to drive positive change in the transition landscape. Highlights from our research and analysis include:
San Miguel Global Power Holdings Corporation is rapidly expanding coal and natural gas-fired power capacity in the Philippines, despite the clear financial risks caused by its overexposure to volatile fossil fuel prices. Their shift from coal to liquefied natural gas (LNG) will likely exacerbate financial issues, not alleviate them.
Pakistan’s tough political-economic circumstances and constrained transmission network present challenges for an early coal phaseout but LNG or diesel power plants can be more suited to an energy transition mechanism facility. For the young coal fleet, IEEFA’s analysis suggests waiting until these plants have fully paid up their loans and are at least ten years of age.
The Indonesian Adaro Group’s planned Phase 1 development of an aluminum smelter of 500 kilotonnes per annum and a 1,100-megawatt coal plant will need eight to 11 years to recoup capex of US$2 billion under a best-case price scenario of US$2,800 per tonne of aluminum. The smelter and coal plant could add 5.2 million tonnes of carbon dioxide, almost 1% of Indonesia’s 2021 carbon emissions.
As we move forward, we invite you to stay engaged with our research, publications, and events, especially as we approach COP28, one of the year's most significant climate change events.
Paige Nguyen
Regional Director, Asia Institute for Energy Economics and Financial Analysis
Latest Reports
The coal cost of aluminum
Ghee Peh
October 11
The first phase of the Adaro Group’s planned aluminum smelter and coal power plant in Indonesia will take years to recoup its US$2 billion investment under a best-case scenario that assumes sustained high prices for the metal.
Making the energy transition mechanism meaningful: A case study from Pakistan
Haneea Isaad and Grant Hauber
October 5
Pakistan’s medium-sized, middle-aged thermal plants operating on liquefied natural gas or diesel-based energy provide prime candidates for working toward an energy transition that will make economic sense to all stakeholders and serve public interest.
San Miguel Global Power: Fossil fuel-oriented growth strategy raises financial red flags
Sam Reynolds and Hazel Ilango
September 22
An overexposure to fossil fuels has weighed negatively on the financial health of San Miguel Global Power Holdings Corporation in the Philippines in recent years, highlighting risks to its expansion strategy focused heavily on coal and natural gas projects.
Indonesia signals it could abandon science-based taxonomy for coal power plants
Christina Ng and Putra Adhiguna
September 5
Indonesian financial regulators recently indicated they were considering a place for new coal-fired power plants in the country’s green taxonomy. The U-turn not only marks a backsliding of the official position displayed early last year but, if implemented, would also relegate Indonesia to the bottom of the pack of global green or sustainable finance taxonomies.
Draft natural gas rules in the Philippines ignore high costs and economic consequences
Sam Reynolds
September 4
The Philippines imported its first two shipments of liquefied natural gas (LNG) at a combined cost of nearly US$90 million (P5.1 billion), according to official customs data. The price tag for just two cargoes should be a warning sign for the exorbitant LNG import bills to come.
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