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$600bn of coal investment at risk as from competitive wind and solar
GLBOAL
THE falling price of renewables means that the 499 GW of new coal capacity planned or being built worldwide could be a $638bn waste of money.
For the first time, it is now cheaper to gener- ate electricity from new renewables projects than from new coal plants in all major global markets, according to a report from financial think-tank Carbon Tracker.
The report also found that 60% of existing coal power plants generate power at a higher cost than newbuild renewables.
“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,” said Matt Gray, Carbon Tracker co-head of power and utilities and co-author of the report.
Indeed, by as soon as 2030 new wind or solar capacity is forecast to be cheaper than existing coal in all markets, including India, Japan, South Korea and ASEAN member states, where coal is still a major generating fuel.
However, different countries will reach this milestone – new renewables undercutting oper- ating coal – at different rates.
In South Africa, the only country in Africa with a significant coal generation sector, the report finds that it will be cheaper to invest in new renewables than existing coal by 2027, while it is already cheaper to invest in new renewables than newbuild coal.
For India, this date is 2020, while for South Korea it is 2022, Japan 2026 and other ASEAN countries 2027. In China, the report finds that new renewables is already cheaper than the country’s existing coal fleet.
The report warned that renewables’ cur- rent and future competitive edge was not being exploited fully by governments, many of which are still looking to coal to provide reliable base- load power.
Some governments are continuing to support
new coal capacity being built by both state and private developers. Coal’s higher costs must then be borne by consumers as higher tariffs or by the state through a range of subsidies and incentives.
“The market is driving the low-carbon energy transition but governments aren’t listening. It makes economic sense for governments to can- cel new coal projects immediately and progres- sively phase out existing plants,” Gray said.
According to the UN’s IPCC, limiting global warming to 1.5°C will require global coal use in electricity generation to contract by 80% between 2010 and 2030. This means one coal plant needs to retire every day until 2040.
The report examined 95% of global power plants operating or planned, which equates to 2,045 GW operating and 499 GW planned.
China is faced with the greatest risk of stranded assets, which mean coal plants that will not be able to compete on price with renewables and which will not be a good investment.
The country has $158bn at risk, with 100 GW of coal under construction and 106 GW planned. It has 982 GW of existing coal power and 71% of this costs more to run than building new
renewables.
Southeast Asia has 78 GW of coal power
planned or under construction at a cost of $124bn, but by 2030 it will be cheaper to build new renewables than continue operating existing coal plants.
In India, $80bn is at risk, with 37 GW of coal power under construction and 29 GW planned. It has 222 GW of existing coal capacity and half – 51% – costs more than new renewables.
In the EU, $16n is at risk on 7.6 GW of new coal power, primarily in Poland and the Czech Republic. However, it has 149 GW of operat- ing coal capacity and 96% costs more than new renewables.
The US has 254 GW of coal capacity and nearly half – 47% – costs more than new renew- ables. No new coal is planned there.™
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w w w . N E W S B A S E . c o m Week 11 18•March•2020