The global analysis of 6,685 coal plants finds that it is now cheaper to build new renewable generation than to run at least 35 percent of coal plants worldwide. By 2030, that percentage increases dramatically, with renewables beating out 96 percent of today’s existing and planned coal-fired generation.
The analysis by Carbon Tracker covered 95 percent of worldwide operating capacity and about 90 percent of under-construction capacity. The report estimates that 42 percent of global coal capacity is already unprofitable due to high fuel costs. By 2040, it is predicted that the unprofitability margin will reach 72 percent.
By 2019, and beyond, falling renewable energy prices, along with stricter air pollution regulations and carbon pricing will put increased pressure on the coal-fired power plant fleet. Added to the increasing pressure on coal is the number of institutional investors who are divesting from fossil fuel companies.
These companies are looking ahead – using risk assessment – and right now, the chance of assets becoming stranded as tougher emission targets come online is just too much of a risk.
“Our analysis shows a least-cost power system without coal should be seen as an economic inevitability rather than a clean and green nicety,” said Sebastian Ljungwaldh, an energy analyst at Carbon Tracker and co-author of the report.
Sticking to the Paris Agreement
The report comes out as 195 nations prepare to meet in Katowice, Poland on Sunday– one of the most polluted coal mining regions in Europe – to agree on the rules for implementing a landmark deal to cut carbon emissions called the Paris Agreement.
The IPCC in a recent report said that at least 59 percent of coal power worldwide must be retired by 2030 to limit global warming to 1.5 degrees Celsius.
A number of countries that still place great dependence on coal, like China, India, the U.S., and Russia, are going to have to make some tough decisions in the coming months. Carbon Tracker says those countries are going to have to choose between closing plants; subsidizing coal generation and power prices or increasing power prices to make coal viable, None of these ideas will go over with the public.
Matthew Gray, Carbon Tracker’s head of power and utilities and the report’s co-author said: “What we are seeing on the ground is that coal-fired power under the Trump administration is not increasing,” said Gray. “What we’ve found since he came into power is, he doesn’t actually have that much influence on power regulation.”
