Decades-long contracts chain Asia to coal-fired power - The Japan Times
Published November 22, 2025
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Long-Term Contracts Bind Asia to Coal Power Generation
In Asia, a significant number of countries are facing a critical challenge as they remain tethered to coal-fired power generation due to long-term contracts. These agreements, often spanning decades, have been established with various stakeholders, including energy companies and investors, which complicates the transition to cleaner energy sources.
As of recent reports, several Asian nations are actively working to reduce their reliance on coal. However, the presence of these lengthy contracts poses a substantial barrier. The financial commitments associated with coal projects are substantial, leading many governments to hesitate in making the necessary shifts toward renewable energy.
For instance, countries like Indonesia, Vietnam, and the Philippines have made commitments to reduce greenhouse gas emissions and increase the share of renewable energy in their energy mix. Despite these intentions, the existing contracts for coal power generation continue to bind them, creating a paradox where the desire for cleaner energy is at odds with financial obligations to fossil fuel projects.
Moreover, the global energy market is witnessing a shift, with many investors increasingly favoring renewable energy projects over coal. This shift is driven by the declining costs of renewable technologies and growing awareness of climate change impacts. Nonetheless, the entrenched nature of coal contracts makes it challenging for Asian nations to pivot quickly.
In conclusion, while there is a clear movement towards renewable energy in Asia, the legacy of long-term coal contracts remains a significant hurdle. Addressing this issue will be crucial for these countries as they strive to meet climate goals and transition to a more sustainable energy future.
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