TAKE ACTION
  • EN
  • JP
  • About Us
  • The Problem
    • Public Finance
    • Private Banks
    • Corporate Players
    • Insurance Companies
    • Projects
  • Campaigns
    • SMBC Group: The Time to Act is Now
    • Mitsubishi: LNG expansion undermining climate commitments
    • MUFG: Climate Chaos For You
  • Past Campaigns
    • Japan at the COP in Madrid
    • G20 Summit in Osaka
    • Wave of Change: Japan Stop Funding Coal
    • COP26 in Glasgow
  • Blog
  • Media
    • Media Contact Details
    • Media releases
  • Take Action
May 27, 2022 - By Carbon Tracker

Stop Fuelling Uncertainty: Why Asia should avoid the LNG trap

The risks associated with gas infrastructure investment have never been higher.

This report continues our series exploring the long-term risks associated with investment in power sector gas infrastructure globally. It follows on from our Put Gas on Standby report from last year which focused on the outlook for gas power plants in Europe and the US, with attention turning here to Asia and the extreme risks associated with nations in this region increasing their exposure to the highly volatile market for liquefied natural gas (LNG).

Source: Carbon Tracker analysis

The Russia-Ukraine conflict has demonstrated that gas supplies can be weaponised or face international sanctions at any time and nations should now be urgently prioritising ways to reduce exposure to this highly volatile market.

This report attempts to persuade policymakers to grasp the immense opportunities presented to them in the clean energy sector and begin the journey to energy independence by planning for a power system centred around lower cost and lower risk renewables.

Key Findings:

  • Increased exposure to the highly volatile global LNG market would be unwise. The Russia-Ukraine conflict has demonstrated that gas supplies can be weaponised or face international sanctions at any time, and shown clearer than ever that now is not the time for nations to be increasing their dependence on volatile gas markets for energy sector needs. Planning a power system centred around renewables with battery storage will minimise exposure to commodity price risk, can be developed at lower cost than new gas, and will prevent billions of dollars of LNG infrastructure investment from stranding.
  • New large-scale gas units in Japan, South Korea and Vietnam appear totally incompatible with a net zero emissions by 2050 pathway and any that are built may be forced to close well in advance of the end of planned lifetimes. Up to $70 billion could be lost if planned new gas units are developed under this more stringent climate scenario. The vast majority of projects would require extensive government backing to be made viable, the provision of which makes no sense when cheaper renewable alternatives are available.
  • Opportunities for renewables in Japan, South Korea and Vietnam are vast and more cost-competitive than gas. New solar and onshore wind power developments in Japan, South Korea and Vietnam are either already cheaper, or will become cheaper overall investments than new gas units by 2025. Given typical planning and construction timeframes of at least four years for new gas, any units that move ahead to development could face constrained running hours from day one amid strong competition from lower cost renewables.
  • Even new solar units with battery storage capacity will become cost-competitive with existing gas plant capacity in Japan and South Korea during the early 2030s. This means that these nations will have a low carbon energy source able to provide comparable flexibility services to a gas unit available at lower cost to the system within a decade, allowing policymakers to plan their phase-out of power sector gas use in line with their net zero emissions by 2050 targets. This inflection point could come even earlier in the event of upward swings in LNG prices.
  • Offshore wind sector growth potential in Asia is huge. Large coastlines and territorial water areas mean that all three countries analysed here are extremely well-positioned to become world leaders in offshore wind development. Offshore wind capacity in South Korea and Vietnam will become cost competitive with new gas this decade.

***

Download the Full Report here.

***
This article “Stop Fuelling Uncertainty: Why Asia should avoid the LNG trap” is originally from Carbon Tracker.  

Share this

You might also like

Mar 31, 2021 - By Insure our Future
Actions Around the World Put Tokio Marine on Notice
Oct 28, 2020 - By Environmental NGOs
[Joint Statement] Japanese NGOs praise collective engagement by institutional investors calling for investees to withdraw from Vung Ang 2 coal-fired power plant in Vietnam
Oct 20, 2020 - By Environmental NGOs
[Joint Press Statement] Inadequately aligned with Paris Agreement, Mitsubishi UFJ Financial Group lags far behind its international peers

#FossilFreeJapan is supported by:

© 2023 Fossil Free Japan
  • About Us
  • The Problem
  • Blog
  • Privacy Policy
We use cookies to help us understand how you use our site and give you the most relevant experience with Fossil Free Japan, including our content and ads on our social media and other digital platforms. By clicking “Accept All”, you consent to the use of ALL cookies. However, you may visit “Preferences” to enable or disable the specific cookies.

Please refer to our Privacy Policy for more information regarding cookies and other third-party tracking that may be enabled.
PreferencesAccept All
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytics
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
Others
Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
SAVE & ACCEPT