Global coal generation capacity falls for first time ever in 2020 | RenewEconomy

Global coal generation capacity falls for first time ever in 2020

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Global coal capacity has declined for the first time, with coal plant retirements outpacing new plant construction during the first half of 2020.

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Global installed capacity of coal fired power stations is set to record a decline for the first time in 2020, as the growth in coal retirements outpaces the construction of new power plants.

A new assessment of global coal power capacity publish by Global Energy Monitor, found that 21.2GW of coal fired power stations were decommissioned in the first half of 2020, compared to 18.3GW of new coal fired plants completed during the same period.

This saw global coal power station capacity fall by 2.9GW over the first six months of the year. Its the first period tracked by Global Energy Monitor that saw an overall decline in coal capacity and the trend is set to continue for the remainder of 2020.

The fall was driven by closures in Europe, which saw 8.3GW of coal plants shuttered in the region, with an additional 6GW of closures scheduled for the second half of 2020. It puts Europe on track for a record year of coal power station retirements as stricter environmental regulations come into force and a recovery in the price of EU carbon permits.

Disruptions caused by the Covid-19 pandemic also led to a reduction in new project completions, with just seven countries bringing new projects online.

Credit: Global Energy Monitor.

The United Kingdom emerged as a leader for coal closures, with one-third of its coal fleet being retired in the first half of 2020. This saw 3,300MW of coal capacity decommissioned during a period where the United Kingdom set new records for the number of consecutive days, spanning two months, without any coal generation.

The United Kingdom has set a target to exit coal generation altogether by 2025, but Global Energy Monitor forecasts that a complete coal phase out could be achieved well before then, with the UK already reducing its coal power generation by 82 per cent over the last decade.

Most of the new projects coming online were completed in China, which contributed 11.4GW of the 18.3GW of new coal projects coming online.

However, the growth in capacity has outstripped the growth in demand and will see the average utilisation rate drop below 50 per cent. The oversupply of coal power station capacity in China is so high that the average utilisation rate of plants could fall below 45 per cent by 2025.

China is currently the world’s largest operator of coal fired power stations, with 1,023GW of plants in operation, representing half of the world’s coal capacity. China is followed by the United States and India, which each operate around 11 per cent of the world’s coal plants.

The Covid-19 pandemic, which has seen demand for electricity fall, has accelerated the demise of a number of coal fired generators, Global Energy Monitor said.

“The Covid pandemic has paused coal plant development around the world and offers a unique opportunity for countries to reassess their future energy plans and choose the cost-optimal path, which is to replace coal power with clean energy,” program director for coal at Global Energy Monitor Christine Shearer said. “Such a transition will stimulate economies, create new jobs, and help the world meet global climate goals.”

Australia is set to see its own rapid demise of coal fired generation capacity, with the updated Integrated System Plan recently published by the Australian Energy Market Operator again highlighting that the vast majority of Australia’s coal fleet is expected to shutter by 2040.

Credit: AEMO ISP 2020.

United Nations secretary general António Guterres has previously called for a moratorium on new coal power stations after 2020, in an effort to achieve the goals of the Paris Agreement, but Global Energy Monitor noted that there was still 189.8GW of coal plants currently under construction and 331.9GW worth of plants in the planning process.

Under scenarios developed by the Intergovernmental Panel on Climate Change, consistent with limiting global warming to no more than 2 degrees, global coal use in the power sector will need to halve by 2030. To limit warming to no more than 1.5 degrees, coal use would need to be cut by three-fours by 2030.

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