Asia’s shift towards cleaner energy is being hampered by decades-long coal power agreements that continue to bind utilities to fossil-fuel generation, even at times when cheaper renewable supplies are readily available, a piece on Devdiscourse claims. Climate analysts warn that these entrenched commitments are delaying emissions reductions in some of the world’s fastest-growing energy markets, undermining global climate targets and exposing governments to rising financial risks.

Across Southeast Asia, long-term users of coal, between 50 and 100% of existing coal-fired capacity is covered by power purchase agreements (PPAs) with roughly nine to 18 years yet to run, according to the Powering Past Coal Alliance (PPCA), a coalition of governments, businesses and civil society groups calling for a managed exit from coal. Long-term commitments are also widespread in China and India – two of the world’s biggest miners of coal, where buyers have accumulated extensive coal procurement obligations, leaving wind and solar assets underused.

The consequences are becoming increasingly visible. Southeast Asia still sourced about 45% of its electricity from coal in 2024, up from 35% a decade earlier, even as coal’s share of global power generation declined from 39% to around 34%, and while renewables investments increase, according to data from energy think-tank Ember. Renewables, by contrast, accounted for just 26% of the region’s electricity output, well below the global average of 41%.

Industry representatives acknowledge that the economics of entrenched coal assets present formidable barriers. Guaranteed revenue for plant operators and the security of jobs make early closures politically and financially challenging and the act of breaking contract terms can also expose grid operators to penalties.

Even China — where carbon emissions are on course to fall this year after an extended period of flat or declining output — has seen coal-fired generation rise. Analysts warn that the country risks repeating patterns seen in late 2024. As a result China’s curtailment challenges are expected to intensify. According to the report, consultancy Wood Mackenzie forecasts that solar curtailment rates will average more than 5% across 21 provinces over the next decade, compared with just 10 provinces facing similar issues in the first eight months of this year.

Other major Asia-Pacific economies are reporting similar strains. Japan, Australia and India have all indicated increased renewable curtailment in 2025 as coal commitments limit flexibility. India, despite setting ambitious clean energy targets, is preparing new long-term power purchase agreements with coal generators. Analysts at Ember and Climate Trends warn that as renewable generation grows, retailers risk accumulating stranded assets and paying mounting fixed charges on underused coal plants.