In Southeast Asia, only 1 GW of new coal power capacity was proposed this year—0.8 GW of that had already begun construction in early 2020 as COVID-19 struck. This marks a turn from business-as-usual in the coal-reliant region. To put things in context, over the past five years, proposals for new coal plant construction have called for almost six GW of new coal power every year.
Indonesia attributed delays in coal plant construction to COVID-19’s disruption of the supply of raw materials needed to build plant components. Furthermore, its nationwide lockdown prevented Chinese workers from entering the country and working on new projects. The pandemic has since stalled 8,000 megawatts (MW) of the country’s new coal capacity under construction.
Other than travel restrictions and the disruption of supplies, the availability of cheap gas and the growth in renewables have also challenged coal production. Low-carbon energy sources such as wind and solar have proved not only more cost-effective and environmentally friendly but also more resilient to lockdown measures.
While demand for all other electricity sources (e.g., coal, gas, nuclear power) dipped, the share of renewables in the global electricity supply rose. As the pandemic cut demand for energy, utilities and grid operators sought the cheapest and cleanest energy sources.Energy from solar systems, wind turbines, and hydroelectric dams are more cost-effective—once the infrastructure is up and running—when there is low demand, which made power operators prioritise and dispatch renewables before turning to more costly carbon sources.
The rise in renewable energy demand was also fuelled by new wind and solar projects coming online this year. Renewables are increasingly being supported by government policies in their governments’ attempts to limit pollution and address climate change. The growing affordability of renewable power also draws investors towards scaling up renewable energy businesses, especially as wind and solar farms can be built more quickly and efficiently than coal plants can.