More than 40 per cent of the world’s coal plants are operating at a loss due to high fuel costs and that proportion could to rise to nearly 75 percent by 2040, a report by environmental think-tank Carbon Tracker showed on Friday.
More than 40 per cent of the world’s coal plants are operating at a loss due to high fuel costs and that proportion could to rise to nearly 75 percent by 2040, a report by environmental think-tank Carbon Tracker showed on Friday. Institutional investors are increasingly divesting from fossil fuel companies due to the risk their assets will become stranded as tougher emissions cut targets discourage their use and renewable energy becomes even cheaper.
London-based Carbon Tracker analysed the profitability of 6,685 coal plants around the world, representing 95 percent of operating capacity and 90 percent of capacity under construction. It found that 42 percent of global coal capacity is already unprofitable. From 2019 onwards, it expects falling renewable energy costs, air pollution regulations and carbon pricing to result in further cost pressures and make around 72 percent of the fleet cashflow negative by 2040.
In addition, by 2030, new wind and solar will be cheaper than continuing to operate 96 percent of today’s existing and planned coal plants, the report said. “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, energy analyst at Carbon Tracker and co-author of the report.
On Sunday, almost 195 countries will meet Katowice, Poland – 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. Efforts are underway across the world to curb global warming by using more renewable energy and burning less fossil fuels such as coal and oil to produce power but emissions are still rising.
A U.N. report in October said the share of coal-fired power in the global energy mix would need to be cut to under 2 percent by 2050 to keep global temperature rises within safe limits. In several coal-reliant economies, governments will have to choose between closing plants; subsidising coal generation and power prices or increasing power prices to make coal viable, which will hurt consumers and undermine competitiveness, Carbon Tracker said. By phasing out coal globally by 2040, stranded asset risk worth $267 billion could be avoided, the report added.
Source: reuters
