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Put a stop to coal! This is Carbon Tracker’s plea to the 5 Asian countries responsible for 80% of new coal plants
Despite renewables’ increasing competitiveness, coal is still going strong in Asia
As shown by Carbon Tracker think tank’s “Do Not Revive Coal” report, new coal plants are still being planned in Asia even though this translates into a hindrance to the achievement of the climate and decarbonisation goals of the Paris Agreement.
However, according to the analysis, renewables are becoming more and more competitive: Investments in renewables beat investments in carbon across all the major markets when comparing the LCOE (levelised cost of energy) of both, which represents the average revenue per unit of generated electricity needed to recover the cost of construction and management of a generation plant during an expected financial and operating life cycle.
This is why Carbon Tracker expects renewables to beat coal by 98% by 2026, reaching 99% by 2030, a forecast that takes into account current pollution regulations and climate policies and the comparison between the LCOE of renewables and the LRMC (long run marginal cost) of existing coal units.
The report highlights that 5 countries in the Asian region, more specifically, China, India, Vietnam, Indonesia and Japan, account for 75% of the existing coal capacity and are responsible for 80% of the world’s new coal plants, amounting to a total of 600 new units for an overall capacity of more than 300 GW.
China is the largest producer of power from coal, with 1,100 GW of coal operating capacity and a 187 GW gas pipeline. India is in second place, with around 250 GW of operating capacity and a 60 GW gas pipeline. Japan (45 GW of coal power capacity) and Vietnam, with 24 GW current operating capacity and an equal capacity planned, follow behind. Coming in fifth is Indonesia, a country that relies a lot on thermal power, which comes primarily from coal, and has planned projects to obtain an additional capacity of 24 GW from this source.
Yet according to the analysed data, 92% of the coal units planned in these 5 Asian countries will be uneconomic and could lead to a disproportionate waste of resources valued at $150 billion. Consumers and taxpayers will most likely be picking up the bill given that coal power is subsidised in these countries and is further supported through power purchasing agreements and other forms of political support.
“Coal no longer makes sense financially or environmentally. Governments should now create a level playing field which allows renewables to grow at least cost, using post-COVID stimulus spending as an opportunity to lay the foundations for a sustainable energy system" says Catharina Hillenbrand Von Der Neyen of Carbon Tracker.
For this reason, Carbon Tracker includes in its report recommendations for investors and policy makers who have a role in the plans for new coal-fired plants:
-cancel all projects for new coal power capacity to avoid wasting $150 billion;
-take advantage of the post-Covid period, using it as an opportunity to start planning a truly sustainable energy system;
-enable market design with a level playing field to allow continued growth of renewables at a minimum cost;
- especially in Asia, but also in other parts of the world, governments should resist the urge to switch from coal to liquefied natural gas (LNG).
However, according to the analysis, renewables are becoming more and more competitive: Investments in renewables beat investments in carbon across all the major markets when comparing the LCOE (levelised cost of energy) of both, which represents the average revenue per unit of generated electricity needed to recover the cost of construction and management of a generation plant during an expected financial and operating life cycle.
This is why Carbon Tracker expects renewables to beat coal by 98% by 2026, reaching 99% by 2030, a forecast that takes into account current pollution regulations and climate policies and the comparison between the LCOE of renewables and the LRMC (long run marginal cost) of existing coal units.
The report highlights that 5 countries in the Asian region, more specifically, China, India, Vietnam, Indonesia and Japan, account for 75% of the existing coal capacity and are responsible for 80% of the world’s new coal plants, amounting to a total of 600 new units for an overall capacity of more than 300 GW.
China is the largest producer of power from coal, with 1,100 GW of coal operating capacity and a 187 GW gas pipeline. India is in second place, with around 250 GW of operating capacity and a 60 GW gas pipeline. Japan (45 GW of coal power capacity) and Vietnam, with 24 GW current operating capacity and an equal capacity planned, follow behind. Coming in fifth is Indonesia, a country that relies a lot on thermal power, which comes primarily from coal, and has planned projects to obtain an additional capacity of 24 GW from this source.
Yet according to the analysed data, 92% of the coal units planned in these 5 Asian countries will be uneconomic and could lead to a disproportionate waste of resources valued at $150 billion. Consumers and taxpayers will most likely be picking up the bill given that coal power is subsidised in these countries and is further supported through power purchasing agreements and other forms of political support.
“Coal no longer makes sense financially or environmentally. Governments should now create a level playing field which allows renewables to grow at least cost, using post-COVID stimulus spending as an opportunity to lay the foundations for a sustainable energy system" says Catharina Hillenbrand Von Der Neyen of Carbon Tracker.
For this reason, Carbon Tracker includes in its report recommendations for investors and policy makers who have a role in the plans for new coal-fired plants:
-cancel all projects for new coal power capacity to avoid wasting $150 billion;
-take advantage of the post-Covid period, using it as an opportunity to start planning a truly sustainable energy system;
-enable market design with a level playing field to allow continued growth of renewables at a minimum cost;
- especially in Asia, but also in other parts of the world, governments should resist the urge to switch from coal to liquefied natural gas (LNG).
