https://www.independent.co.uk/environment/coal-power-investment-climate-change-asia-china-india-iea-report-a8914866.html
[images and links in online article]
Global investment in coal tumbles by 75% in three years, as lenders lose
appetite for fossil fuel
More coal power stations around the world came offline last year than
were approved for perhaps first time since industrial revolution, report
says
Harry Cockburn
May 16, 2019
Since it powered us into the industrial revolution, coal-fired energy
has become the single biggest driver of man-made climate change and its
use across the world is still increasing.
But while dependence on coal remains high, with coal-fired power plants
currently fuelling around 38 per cent of global electricity, a new
report indicates the demise of coal is already well underway.
The International Energy Agency’s new world investment report released
this week, reveals the companies funding coal-fired power stations
appear to be making significant recalculations about the long-term
viability of these plants.
This is shown by a collapse in Final Investment Decisions (FIDs) for
coal plants, which have tumbled by 75 per cent in three years.
The report says a total of 236 gigawatts of coal plants are under
construction worldwide. In 2015, FIDs signed off 88 gigawatts for
construction, but this fell to 22 gigawatts in 2018.
Furthermore, the rate at which coal power plants are being
decommissioned has risen to the extent that despite new power plants
coming online, there was a net reduction in coal power being used
globally over 2018. Around 30 gigawatts of generators were retired last
year.
It is estimated this could be the first time there has been a reduction
in coal-fired power capacity across the world since the industrial
revolution.
When the FIDs fall to zero, it will only be a matter of time until
coal’s rein is over.
Last year, with FID’s going down, the IEA noted: “It appears that banks,
insurance companies, hedge funds, utilities and other operators in
advanced economies are exiting the coal business.”
This means that even without policy necessarily directing them, the
financial concerns of investors over the future of the fossil fuel
business are slowly ensuring money is being allocated to different areas.
Most of the current expansion in coal is in Asia. In the West, the move
away from coal has gathered pace, with Europe’s overall use of coal down
a quarter, while in the US it has fallen by 40 per cent over the last 10
years.
But these cuts are more than made up for in Asian economies, where over
the last decade, the coal-fired power sector has grown by 63 per cent,
with more power stations are planned.
The IEA report outlines two scenarios for measuring energy progress.
The first is its Sustainable Development Scenario (SDS). In this
scenario, energy production meets the criteria set out under the Paris
agreement targets and air pollution around the world is slashed.
The second is the less ambitious New Policies Scenario (NPS), which
would see less action taken to tackle fossil fuels and less investment
in renewables, resulting in warming reaching around 2.5C by 2100.
While the report’s headline finding is that we are currently on course
for disaster due to inadequate levels of investment in low-carbon energy
sources, it also makes clear that coal’s unattractiveness has set it on
a course to meet the criteria outlined in the more ambitious SDS.
Dr Fatih Birol, the IEA executive director said: “Energy investments now
face unprecedented uncertainties, with shifts in markets, policies and
technologies. But the bottom line is that the world is not investing
enough in traditional elements of supply to maintain today’s consumption
patterns, nor is it investing enough in cleaner technologies to change
course. Whichever way you look, we are storing up risks for the future.
“Current investment trends show the need for bolder decisions required
to make the energy system more sustainable. Government leadership is
critical to reduce risks for investors in the emerging sectors that
urgently need more capital to get the world on the right track.”
The report comes days after United Nations secretary-general António
Guterres said the world must dramatically change the way it fuels
factories, vehicles and homes to limit future warming.
The alternative “would mean a catastrophic situation for the whole
world,” he told The Associated Press.
Mr Guterres said he will call on leaders to stop subsidising fossil
fuels, and wants countries to build no new coal power plants after 2020.
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