Page 5 - AsiaElec Week 25 2021

AsiaElec COMMENTARY AsiaElec

stranded asset.
In the US, 149 GW, or 61% of total coal reduction needed by 2030 to meet the UN’s
capacity, costs more than new renewable capac- 1.5°C temperature goals.
ity to run. Retiring and replacing these plants IRENA’s report adds fuel to the argument
with renewables would cut expenses by $5.6bn that cheaper renewables will form a key element
per year and prevent 332mn tonnes of CO2 of the move towards net zero.
emissions, or one third of US emissions. It adds to the International Energy Agen-
In India, 141 GW of installed coal is more cy’s Net Zero 2050 roadmap, which said that
expensive to run than new renewable capacity, the road to net zero by 2050 was “narrow but
meaning they can be termed stranded assets, achievable.” The roadmap called for annual
acting as an unprofitable and uneconomic mill- global investment in green energy to rise from
stone for their owners. $2 trillion today to $$5 trillion by 2030
The report pointed out that much of coal Outlook
capacity is cheaper to run in the US and India Looking ahead to 2022, the report sees the cost
because there is no carbon price to pay. of renewables falling further, with onshore wind
In Germany, where there is a carbon price, becoming 20-27% lower than the cheapest new
which adds significantly to running costs, no coal-fired generation option.
existing coal plant has lower operating costs 74% of all new solar PV projects commis-
than new solar PV or onshore wind capacity. sioned over the next two years that have been
Globally, over 800 GW of existing coal power competitively procured through auctions and
costs more to run than new solar PV or onshore tenders will have an award price lower than new
wind projects commissioned in 2021. coal power.
Retiring these plants would reduce power What this means is that low-cost renewables
generation costs by up to $32.3bn per year and are already not only the backbone of the electric-
avoid around 3bn tonnes per year (tpy) of CO2, ity system; they will also enable electrification in
corresponding to 9% of global energy-related end-uses like transport, buildings and industry
CO2 emissions in 2020. and unlock competitive indirect electrification
This is equivalent to 20% of the emissions with renewable hydrogen.™

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