Thermal coal in Asia: Why China and India will break carbon budget

thermal_coal

The power sectors of China and India combine to be one of the most significant sources of emissions on the planet due to the use of thermal coal plants. Stopping this juggernaut in time is one of the keys to keeping the world to its Paris targets.

However, whilst the pipeline of all planned coal plants has fallen in India and China, on current trajectory it threatens to expend the carbon budget years too early.

In fact, China’s current coal power station pipeline will result in the country overshooting its 2050 thermal coal ‘carbon’ budget as set out by the International Energy Association (IEA) by 2020 on an annual basis and the total budget by 2036.

India’s total budget will also be expended as early as 2036, even with no new power plants developed post those under construction now.

The International Energy Agency (IEA) carbon ‘budgets’ for Chinese and Indian power sectors call for a near complete decarbonization by 2050. Today, there are 205GW of thermal power stations under construction in China and 65GW in India.

According to the IEA’s 2°C budgets, India and China can emit 108GtCO2 by 2050. Just factoring in these thermal coal power stations currently under construction, India and China will reach 169 Gt CO2 – an overshoot of more than 50%.

If all planned thermal coal power stations go ahead, this figure reaches a staggering 196Gt CO2 by 2050.

While both India and China have comprehensive policies to stimulate cleaner energy, efficiency and further policy changes would be highly desirable to support these trends by constraining unneeded thermal coal and developing green financing markets.

Carbon Capture and Storage (CCS) too has a potential role to play. Without CCS for coal plants, the deployment of High Efficiency Low Emissions (HELE) plants will simply not meet 2°C.

However, the reality is that as yet, there is scant evidence of the rapid implementation of CCS at the scale required in order to be taken seriously.

The time has well and truly come for governments to step up on CCS or admit it’s not a viable option.

The implications of the coal pipeline go beyond the climate and pollution impacts, with stranded assets likely to emerge and stress the financial system as capacity utilization rates continue to fall.

Today, there are a number of policies that can complement positive trends in the relative cost of renewable energy, and reduce pressure on these sources from excess generating capacity, which is forcing curtailment.

These include, for example, extending short-term moratoriums on new coal plant permits and new construction and removing subsidies for coal production and consumption.

What’s clear is that delivering on the global 2°C climate target necessitates addressing the thermal coal pipeline in India and China. Whilst it may be slowing, without seriously applying the breaks, we risk failing to stop this juggernaut in time.

The report – Thermal Coal in Asia – Stopping the Juggernaut – is available here.

Mark Fulton is Founder, Energy Transition Advisors, former Head of Equity Research at Citigroup, and Deutsche Bank Climate Change Advisors.

Comments

5 responses to “Thermal coal in Asia: Why China and India will break carbon budget”

  1. suthnsun Avatar
    suthnsun

    Juggernauts can only be stopped if willing..commuters will only bike/train if willing.. residents will only take up solar HW and PV if willing..politicians will only realize too late, act too late, provided ff party donations have dried up..(that will be way too late)

  2. john Avatar
    john

    This does not make good reading.

  3. john Avatar
    john

    Ok i have an issue with the report.
    One of the graphs shows the LCOE of power from Solar, wind and coal in China.
    It starts with a solar cost of $US $90 to $130 per MWh as the price now in 2016 and falling to $25 per MWh by 2040.
    I find it hard to believe the starting cost especially as sub $30 bids have been make in several different countries recently how on earth is their pricing between 3 and 4 times higher?
    I find it hard to believe that panels and equipment made in China is more costly there, than in the Middle East or South America for instance.

    1. Brunel Avatar
      Brunel

      It is sunnier in Dubai. Maybe land and finance is cheaper in Dubai too.

      They ought to look at building solar power stations in Tibet – where it is probably quite sunny.

      1. john Avatar
        john

        Tibet is elevated which helps the closer to the sun the better also the less distance the sun has to travel to a panel the better.
        This is why the further from the equator the less gain you get perhaps a link to help.
        http://pvwatts.nrel.gov/

        Now navigate to your address and put the info as to the roof angle I am sure your are across this.

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