More than 40 per cent of world’s coal plants already running at a loss, making new renewables projects ever more competitive, Carbon Tracker analysis finds
A sizeable chunk of the world’s coal-fired power plants are already running at a loss, and in many cases it would be cheaper to build new sources of renewable energy than keep running them, according to a new analysis by the influential Carbon Tracker think tank.
The latest research from the NGO has today found that over two-fifths – 42 per cent – of the world’s coal power stations are currently loss making thanks to high fuel costs, with consumers and taxpayers mostly picking up the bill to keep them running.
If carbon pricing and air pollution regulations further drive up costs for coal plants in the future at the same time as renewables costs continue to fall, then the percentage operating at a loss could rise to 56 per cent by 2030 and 72 per cent by 2040, the study estimates. It adds that future regulations could also serve to make coal power even more unprofitable.
Meanwhile, it suggests that by 2030 it will be cheaper to build new renewables than to continue to operate 96 per cent of today’s existing and planned coal plants.
Already, it said, 35 per cent of the world’s coal plants are currently more costly to operate than building new renewable power generation.
Carbon Tracker said it would therefore make economic sense to close coal plants down in line with the Paris Agreement, potentially saving the world’s biggest economies hundreds of billions of dollars.
By shutting coal plants instead of pursuing business as usual plans, it estimates China could save $389bn, the EU could save $89bn, the US could save $78bn, and Russia could save $20bn.
Co-author of the report Matt Gray, head of power and utilities at Carbon Tracker, said the findings underlined the huge financial risks faced by investors in coal power projects.
“The narrative is quickly changing from how much do we invest in new coal capacity to how do we shut down existing capacity in a way that minimises losses,” he said.
