Despite the advent of cheaper renewables, these plants would jeopardise Paris climate targets, according to a research by the financial think tank Carbon Tracker.
Five Asian countries, including India, account for 80% of the world’s planned new coal plants. Despite the availability of cheaper renewables, these plants would jeopardise Paris climate targets, according to a research released on Wednesday by the financial think tank Carbon Tracker.
It cautions that 92% of the planned units will be uneconomic even under business-as-usual conditions, wasting up to $150 billion. Consumers and taxpayers will eventually bear the burden since many nations subsidise coal power or support it through favourable market design, power purchase agreements, or other kinds of governmental assistance.
According to the study, ‘Do Not Revive Coal,’ China, India, Indonesia, Japan, and Vietnam intend to build more than 600 new units with a combined capacity of more than 300GW, despite UN Secretary General Antonio Guterres’ request for all new coal plants to be scrapped.
He called the phase-out of coal in the power industry the “single most essential step” in addressing the climate issue.
Catharina Hillenbrand Von Der Neyen, Carbon Tracker’s Head of Power and Utilities, stated, “These final bastions of coal power are swimming against the flow, when renewables provide a cheaper alternative that supports global climate objectives.”
“Investors should avoid new coal projects, as many of them are expected to yield negative returns from the start.”
In addition to modelling the financials of 80% of proposed new coal, the research assesses the economics of 95% of running coal plants at the boiler level worldwide: over 6,000 operating units account for about 2,000 GW.
The study is the third in Carbon Tracker’s yearly Powering Down Coal series.
The five Asian countries also run roughly three-quarters of the existing global coal fleet, with China accounting for 55% and India accounting for 12%. According to the research, around 27% of current capacity is already unprofitable, and another 30% is close to breakeven, producing a nominal profit of little more than $5 per MWh.
However, the silence of major polluters, such as China and India, on more harsh climate measures at the recent Leaders’ Summit on Climate Change spoke loudly, suggesting that they still have internal objectives that contradict with policies aimed at mitigating climate change.
At the corporate level, just ten businesses account for around 40% of the stranding risk, with NTPC and the Adani Group in India and PLN in Indonesia faring the worst.
Seven of the ten most vulnerable firms are located in India.