Extra Than 800 Coal Crops Worldwide May Be Profitably Decommissioned: Analysis

Greater than 800 coal-fired energy crops in rising international locations might be decommissioned and profitably changed by cleaner photo voltaic vitality ranging from the tip of the last decade, analysis on Monday confirmed.

Although solely a tenth of present coal crops are scheduled to close down by 2030, extra might shut if efforts are made to establish alternatives, the Institute for Power Economics and Monetary Evaluation (IEEFA) stated.

“The important thing downside here’s a lack of a pipeline of nicely outlined, contracted, bankable coal-to-clean transactions,” stated Paul Jacobson, lead writer of the report.

Round 15.5 billion metric tons of carbon dioxide are generated yearly by 2,000 gigawatts of coal energy. The Worldwide Power Company says emissions want to achieve zero by 2040 if temperature rises are to stay inside the threshold of 1.5 levels Celsius.

However decommissioning is expensive, particularly if crops are nonetheless paying off debt or tied to energy buy agreements (PPAs) that commit them to supplying electrical energy over many years.

Governments have been in search of options to pay for the transition – together with the Asian Growth Financial institution’s Power Transition Mechanism – however solely a small variety of initiatives have gone forward.

The 800 viable transition targets recognized by IEEFA embody round 600 constructed thirty years or extra in the past, lots of which have repaid money owed and are now not tied down by prolonged PPAs.

With revenue margins for renewables now adequate to cowl the price of changing coal crops, decommissioning the remaining 200 crops constructed between 15 and 30 years in the past is also reasonably priced, although obstacles stay, together with fossil gasoline subsidies that inflate an asset’s worth.

Decommissioning newer crops will probably be a much bigger monetary problem, significantly in international locations nonetheless constructing recent capability, together with Vietnam.

Environmental teams have criticized transition financing for paying polluters to not pollute. Jacobson stated “guardrails” had been required to keep away from creating perverse incentives.

“Corporations that proceed to construct new coal energy crops whereas looking for concessions to construct renewable vitality shouldn’t be allowed to make use of that to learn from this,” he stated.

(Reporting by David Stanway; enhancing by Mark Potter)