The investment case for coal-fired power is looking increasingly unconvincing, but more plants will need to be cancelled if the world is to avoid runaway climate change, a report published on Monday said.
The report said that even though two out of three coal-fired power plants globally are likely to be cancelled – mainly for economic reasons – the remaining one-third will account for nearly all of the greenhouse gases that can be emitted if the world is to stand a reasonable chance of keeping temperature rises within the 2°C limit.
“We’ve seen time and again that coal is a risky and expensive investment for anyone, especially developing countries that are on the frontlines of the global energy crisis,” said Sierra Club campaigner John Coequyt.
China most exposed to stranded assets in older coal power
Another report released on Friday said that Chinese state-owned enterprises are most at risk from tightening environmental regulation as the country’s government promises to deliver on its pledge to curb smog and shut down surplus industrial capacity that burns large amounts of coal.
And newer capacity is likely to be used less often because of big new additions of low carbon energy to Chinese power grids, points out new research
from Australia-based academics John Matthews and Hao Tan.
In India, water shortages could make coal-fired power increasingly untenable, the report adds.
The resources industry and some energy economists say the death of coal is greatly exaggerated, pointing to global population growth and the impact on energy demand, ‘locked in’ power production from the fuel, and the ambitions of many developing countries to power future economic expansion through the use of coal.