Philippines Indonesia

In response to concerns around coal’s environmental impact, clean coal technologies are being implemented. The Philippines commissioned its first 500MW supercritical coal plant, by San Buenaventura Power Ltd. Co, in September 2019. The second, by GNPower Dinginin Ltd Co, is expected to be in operation by the end of 2023. With the coal moratorium, the growth of conventional power generation is expected to shift to gas-fired power plants.

The Philippines currently has six operating gas-fired power plants, mostly in the Batangas province. It is expected to add around 4GW of additional capacity by 2040. With the declining reserves of the Malampaya gas field (the Philippines’ only source of gas supply), the Department of Energy aims to secure LNG imports in the future for its existing and upcoming gas-to-power projects, approving the development of seven LNG import terminals. Recent power projects announced include the 1.1GW Batangas LNG Power Plant by ACE Enexor Inc and Gen X Energy, with construction works to begin in 2023 with completion expected in H2 2026.

Indonesia is shifting towards using more renewable energy, although coal still accounts for 64% of power generation capacity as of 2022. This is followed by gas, which represented 15% of electricity generation. Renewables made up 20%, led by hydropower, geothermal and biofuels.

There are 19 coal power projects in planning and development, with capacity of over 10GW; 10 are in the engineering, procurement and construction stage and will mostly come online by 2027. The rest are in the early stages, and are likely to face difficulties due to the deteriorating investment climate for coal power and the Just Energy Transition Partnership (JETP) agreement Indonesia signed in November 2022.

The agreement, signed with a group of developed countries led by the US and Japan, entails the provision of US$20bn in support for Indonesia’s energy transition, mainly targeting coal-fired power plants. It is expected to speed up the phase-out of coal-fired output in the medium-to-long term, and involves putting coal-fired plant projects on ice.

There are currently 21 gasfired projects in the pipeline with total generation capacity of

4.52GW, all to startup by 2027. Gas-fired projects could move at an accelerated pace as Indonesian officials see gas as a quick fix to cutting emissions. The nation plans to convert its diesel fuel-fired power plants to gas-fired power plants starting this year as a part of its energy transition programme.

The Indonesian government hopes that the gas conversion project could be funded by the JETP. There are currently 5,200 diesel power plants in 2,130 locations throughout Indonesia; the plan is to convert at least 52 into gas plants, with the first stage of the plan seeing the conversion of 33 plants. The project is reportedly still at the auction stage and is expected to commence this year.

Vietnam, the Philippines and Indonesia are expected to build coal-fired power plants throughout the 2020s. Opportunities will primarily stem from existing and planned plants, many of which will be operational until 2050. Carbon capture, utilisation and storage is anticipated to grow strongly in the region, although implementation will vary. Another key opportunity will be the deployment of digital technologies to increase the operational efficiency of legacy assets – maximising power generation, minimising emissions and reducing unplanned downtime. Finally, for regions closing their plants, there will be significant decommissioning opportunities.