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bne July 2021 Companies & Markets I 25
2019 and 2020, the only country in the world to see growth in coal generation in 2020.
However, although this share is falling, principally to meet Beijing’s target of net zero by 2060, the country is still a major builder of new power plants
It commissioned 38.4 GW of new coal-fired power in 2020, compared with 11.9 GW turned on in the rest of the world, according to Global Energy Monitor (GEM). Meanwhile, the country currently has 247 GW of coal power capacity under development.
Indeed, President Xi Jinping recently announced at US President Joe Biden’s Virtual Climate Summit that China's carbon emissions would peak before 2030 and the country should attain carbon neutrality by 2060.
Xi said that Beijing would follow a policy of strictly controlling, while still increasing, coal use until 2026, when consumption would begin to fall.
China’s policy is to wind down its coal consumption during this slow transition to net zero. Coal would no longer be the major source of power, but would provide grid flexibility, reliability and a major source of employment.
India is even more coal-reliant than China, the fuel accounting for 71% of the country’s generation in 2020, Ember said. Then came China with 61%, slightly more that Beijing’s own figures, with Indonesia next on 60%, Australia on 54%, South Korea on 38% and Japan on 29%.
In a nutshell, Asia is perhaps the most exposed global region to coal, and is well behind such regions as the EU in pushing to reduce their reliance on it.
Africa
Finally, the other major coal economy is South Africa, where coal accounted for 86% of power supply in 2020, making it the most coal-reliant power sector in the G20. Renewables currently accounts for just 6%.
This is an inheritance from the apartheid era, when the government could invest in cheap domestic coal production in order to fuel industrial expansion. However, the country’s energy sector has failed to modernise since the end of apartheid in the early 1990s.
This has left an investment-starved and virtually bankrupt Eskom, the state-owned monopoly, running a power sector than cannot adapt to new renewable technology or even maintain reliable supplies to industrial and domestic customers.
A lack of maintenance at older coal plants has led to rolling power cuts. This has acutely affected industry in South Africa, and slowed growth and socio-economic development.
Power consumption has actually fallen by 5.4% since 2015, unique for a developing economy,
Eskom now had debts totalling ZAR450bn ($25bn), and the company’s power purchase agreements (PPAs) with a range of private mining companies have recently been the focus of legal cases highlighting corruption dating back to the presidency of Jacob Zuma.
When South African President Cyril Ramaphosa took office, he overhauled Eskom’s management and board, as well as putting in a stronger regime of oversight.
As well rooting out corruption and cutting the influence of Zuma-influenced ANC figures, Ramaphosa has spearheaded Eskom’s plans to split up the company into generation, transmission and distribution entities. This aims to cut debt, improve operational efficiency and reduce corruption.
South African has also set a 2050 net-zero target, but this will require both massive deployment of wind and solar and a major reorganisation of the national grid away from coal.
Poland
Poland reduced coal and lignite share in its energy mix from over 90% to 70% in 2020 (Ember's 2018 data say 77%), with some "help" from the pandemic-reduced recession but also thanks to falling demand for coal as renewable energy – photovoltaics (PV) in particular – takes hold.
In future, Poland's emissions from the power sector are expected to fall to 11%-28% in 2040 thanks to offshore wind, further development of onshore wind and photovoltaics, gas, as well as nuclear power.
Central and Eastern Europe (CEE) is “brimming with opportunities for investment into renewable energy, airports and infrastructure,” a study by international law firm CMS found.
This year’s report “confirms that a crucial point has been reached in the global transition into greener, smarter and more sustainable investments and assets,” a press release emailed to bne IntelliNews said.
Among the seven CEE countries included in the 2019 index, Poland has the top spot across the region for investment attractiveness, rising three points since the 2017 index.
According to the report, Poland – which still relies heavily on coal power – is making “huge strides” in the clean energy sector.
“Poland’s strong position in the index is gratifying and reflects the strength of the primary infrastructure market and the government’s support for investment in sustainable assets,” Marcin Bejm, head of infrastructure and project finance at CMS Poland, said in the report.
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