Energy securityCoal Developers Risk $600 Billion As Renewables Outcompete Worldwide
Coal developers risk wasting more than $600 billion because it is already cheaper to generate electricity from new renewables than from new coal plants in all major markets, the financial think tank Carbon Tracker warns in a new report. The report also finds that over 60 percent of global coal power plants are generating electricity at higher cost than it could be produced by building new renewables. By 2030 at the latest it will be cheaper to build new wind or solar capacity than continue operating coal in all markets.
Coal developers risk wasting more than $600 billion because it is already cheaper to generate electricity from new renewables than from new coal plants in all major markets, the financial think tank Carbon Tracker warns in a new report.
The report also finds that over 60 percent of global coal power plants are generating electricity at higher cost than it could be produced by building new renewables. By 2030 at the latest it will be cheaper to build new wind or solar capacity than continue operating coal in all markets.
Matt Gray, Carbon Tracker co-head of power and utilities and co-author of the report, said: “Renewables are outcompeting coal around the world and proposed coal investments risk becoming stranded assets which could lock in high-cost coal power for decades. The market is driving the low-carbon energy transition but governments aren’t listening. It makes economic sense for governments to cancel new coal projects immediately and progressively phase out existing plants.”
Limiting global warming to 1.5°C will require global coal use in electricity generation to fall by 80 percent from 2010 to 2030 (Climate Analytics, Global and regional coal phase-out requirements of the Paris Agreement: Insights from the IPCC Special Report on 1.5°C, September 2019). This means one coal plant needs to retire every day until 2040 (see Carbon Tracker, Earth to investors: Paris Agreement requires one coal unit to close every day until 2040,5 March 2018).
Carbon Tracker notes that worldwide, 499GW of new coal power is planned or already under construction at a cost of $638 billion, but Carbon Tracker warns that governments and investors may never recoup their investment because coal plants typically take 15 to 20 years to cover their costs.
The report finds that falling costs of wind and solar power and the investment needed to comply with existing carbon and air pollution regulations mean that coal is no longer the cheapest form of power in any major market.
How to waste over half a trillion dollars: The economic implications of deflationary renewable energy for coal power investments evaluates the economics of 95% of coal plants that are operating, under construction or planned worldwide: 6,696 operating units (2,045GW) and 1,046 units in the pipeline (499GW). It reveals that:
· In China $158 billion is at risk, with 100GW of coal power in construction and 106GW planned. It has 982GW of existing coal power and 71 percent of this costs more to
