A new report has called an end to the boom in coal-fired energy generation, citing a decline in China and a world-wide trend that has seen two coal plants shelved or cancelled for every new coal plant built since 2010.
The report, which details new data from the Global Coal Plant Tracker, says that the worldwide boom in coal-fired generating capacity which saw it add twice the entire existing US coal fleet in seven years (2005-2012) was now busting.
Published on Monday by US-based environment groups CoalSwam and Sierra Club, the report points to last year’s 1.6 per cent decline in coal use in China – the first drop for 14 years – despite the economy growing by 7.3 per cent.
Further, China’s overall utilisation rate for thermal plants declined to 54 per cent, says the report – the lowest
level in over three decades.
Called Boom and Bust: Tracking the Global Coal Plant Pipeline, the report notes that the cancellation rate of coal plants has been significantly higher than 2:1 in places like Europe, South Asia, Latin America, and Africa, and has reached a six-to-one ratio in India since 2012.
“India’s coal boom has withered,” says the report, with grassroots citizen opposition, supply issues, and other problems causing financing for new coal plants to dry up.
“Although 69 GW of capacity is still under construction due to a surge in construction starts prior to 2012, less than 10GW of new construction has started since mid-2012,” the report says.
In the US and the EU, it says, the amount of coal-fired generating capacity retired exceeded new capacity by 22 per cent from 2003 to 2014.
In Australia – the world’s second largest exporter of thermal coal in 2013, behind Indonesia – the report notes that the coal-dominated National Energy Market is in a state of oversupply by 7,650 to 8,950 MW, with available capacity exceeding peak demand by close to 30 percent.
Among those coal plant projects that do remain in the developmental pipeline, it says, none shows a high likelihood of moving forward in the near future (see map below).
The report also notes how heavily India is invested in Australian coal, with companies like the Adani Group planning to mine up to 60 million tonnes of coal per year from North Queensland’s Galilee Basin, as well as its $1.8 billion investment in the associated Abbot Point Coal Terminal.
But while India – and Australia, for that matter – don’t seem to have got the memo, CoalSwarm executive director and report co-author Ted Nace, says what is striking is how quickly the business climate has turned against coal since 2012.
This could have something to do with the major financial risks that coal investors are increasingly being warned about – the the recent analysis from Carbon Tracker which identified $112 billion worth of investments in future coal mine expansion and development that were excess to requirements under lower demand forecasts.
And then there’s the carbon budget.
The global carbon budget, as John Upton put it here, is the is the amount of fossil fuel we can burn, concrete we can pour and forest we can fell without blowing the global warming goal of 2°C. If the carbon budget was a giant cake, adds Upton, “then we’d all be running out of dessert – fast.”
And according to senior Carbon Tracker Initiative researcher Luke Sussams, coal is eating up more than its fair share.
“Existing global coal-fired power plant capacity will already swallow four-fifths of the 2°C carbon budget over its lifetime, leaving no room for burning the world’s oil and gas,” Sussams said in a statement accompanying the report’s release.
“This fundamental contradiction means investors must assess their exposure to coal plants that are most at risk of becoming stranded in a carbon-constrained world, and steer clear of funding any new coal plants altogether.”
Certainly, that’s what the world fossil fuel divestment movement has been getting at, in its tireless campaign to get banks, universities and investment funds to dump investments in coal.
The Sierra Club and CoalSwarm agree, and hope the lead-up to COP21 climate negotiations in Paris will see OECD countries take the lead on phasing out new and existing coal plants, too.
“(OECD) countries must commit to ending subsidies and policies that favour coal, and instead focus on cutting-edge clean energy solutions,” they said in the report.
“The data from this new report simply reinforces what we’ve been saying all along: (developing countries are) moving away from coal toward the clean energy solutions that are taking hold right now, increasingly powering the world in a reliable, cost-effective, and healthy way,” said Sierra Club’s John Coequyt.
The report also highlights the fact that, in addition to being the most carbon-intensive electricity source, fine particle pollution from coal causes an estimated 800,000 premature deaths annually.
