Published 3 years ago.
About a 4 minute read.
Image: Benita Welter/Pixabay
Clean power is finally taking over. Yes, it has taken far longer than most environmental campaigners wanted. But with investors fearing the worst and the majority of global economies slowly weaning themselves off of coal, the planet should breathe a huge sigh of relief.
Last month, two of Poland’s state-run utilities, Energa and Enea,
decided to abandon a joint
to build a huge new coal-fired power plant on the outskirts of Warsaw. The
reason: The two firms have been struggling to raise the investment capital on
the €1.4 billion scheme; and now admit they might have to suspend work on the
plant, which was set to be ready by the end of 2023.
It is big news in Poland, where coal currently delivers around 80 percent of the
nation’s electricity. But the news is also a reminder to the coal sector that it
is on borrowed time.
“The reality that there is no future for old coal, let alone new coal, in Europe
is finally dawning on Poland’s energy sector,” according to Zala Primc, from
the campaign group, Europe Beyond Coal.
from Carbon Tracker suggests the world’s coal companies could do worse than
to follow the lead of Energa and Enea, with 60 percent of global coal capacity
said to be uneconomic on a long-run marginal cost basis: “In the absence of
changing circumstances — i.e. lower costs and/or higher revenues — coal power
is, and will continue to be, inherently risky,” it argues.
In Western Europe, wind and solar energy farms are driving power prices
below the operating cost of coal generation. In fact, the analysis suggests that
more than 50 percent of global coal capacity has a higher marginal cost than the
levelised cost of either solar PV, onshore wind or offshore wind. Even in places
such as Japan, whose topography somewhat limits the use of renewables,
low-cost wind and solar “could soon eclipse the economics of incumbent coal as
early as 2024.”
“It’s essential we stop new investments and develop retirement schedules to
avoid stranded assets,” says Matt Gray, Head of Power and Utilities at
Beyond the power market, a number of insurance brokers are beginning to take
notice. Zurich, Aviva, Axa and Allianz in Europe; and Axis
Capital, BlackRock and Chubb in the US have all recently announced plans to limit their exposure to coal, refusing to underwrite coal schemes or
support businesses that have 30 percent of more of their revenues attached to
the mining or burning of coal.
Of course, the demise of coal is good for the planet. Producing power from coal
was the single largest contributor to the growth in greenhouse gas (GHG)
emissions in 2018, when pollution jumped 2.9 percent. Right now, coal-fired
electricity production accounts for almost a third (30 percent) of total carbon
dioxide (CO2) emissions.
Burning coal also releases sulfur dioxide (SO2) and nitrogen oxides (NOx) (which
can lead to acid rain), and fine particulates (PM10 and PM2.5) in the form of
fly ash (which can lead to local air quality issues and lung-related illnesses).
Coal plants also account for more than 40 percent of all anthropogenic mercury
emissions, which can pollute water and soil.
The fear of stranded assets will see worldwide coal demands fall from here on
in. According to the International Energy Agency, more than 250 terawatt
hours (TWh) less electricity — or 2.5
percent — came from coal in 2019, thanks to double-digit falls in the US and
However, due in no small part to growth in Asian economies, things will
stabilise during the next five years. While power generation from coal will rise
just a fraction by 2024 at less than 1 percent per year (its share declining
from 38 percent in 2018 to 35 percent in 2024), coal will remain by far the
single biggest source of power supply in the world.
In India, which aims to grow its economy to $5 trillion by 2024, demand for
coal is predicted to grow by more than that of any other country, in absolute
terms in the next few years, jumping 4.6 percent per year through 2024.
Across Southeast Asia, coal demand will to grow by more than 5 percent per
year in the same timeframe, with
Pakistan recently commissioning more than 4GW of new coal plants. And in
China, it will take until 2022 for consumption of coal-powered electricity
to finally plateau.
The good news is that clean power is taking over. Regulation and policy across
European Union countries, many of which have promised a coal phase-out, has put
pressure on companies to switch out of the dirty fossil
In the US, while the federal government and a number of states continue to
subsidise coal, the shale gas boom is putting paid to coal’s future, too.
Yes, it has taken far longer than most environmental campaigners would have
wanted. But with investors fearing the worst and the majority of global
economies slowly weaning themselves off of what has been a cheap source of power
for decades, the planet should breathe a huge sigh of relief.
Published Mar 10, 2020 2pm EDT / 11am PDT / 6pm GMT / 7pm CET
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