According to the Carbon Tracker Initiative, a research think tank, coal is phasing out on a global scale. The researchers monitor the finances of all the world’s operating and planned coal plants. In its report on the global coal power market, the think tank estimates coal investors will lose more than USD 600 billion due to cheaper renewables. Operating coal plants will be uneconomic as soon as by 2030.
COVID-19 seems to speed up the trend. The epidemic has hit China’s economy and slowed down coal consumption, thus helping reduce greenhouse gas emissions by 25% in one go, according to Politico.
From Carbon Tracker’s report:
“Coal has long been considered the least-cost option for power generation throughout the world. This narrative is quickly changing as a confluence of factors are disrupting coal’s pre-eminence. Most notably, low-cost renewable energy, which will soon be cheaper to build than to run coal plants.”
Coal, however, retains considerable social and political power. This story in Vox explains how.
Notably, more competition in the energy sector normally would mean less coal in a particular economy. More coal is a sum of corporate welfare, monopolistic utilities, benefitting policymakers and subdued regulators. In many coal-dependent countries, fossils are kept alive by political influence and distorted markets. Carbon Tracker urges governments to stop incentivising new coal projects. The think tank also suggests countries move toward more competitive energy markets, with more “price discovery” through regular interaction of buyers and sellers. Finally, policymakers should devise a phase-out schedule for existing coal plants. Shutting down uneconomic coal plants should be a priority as keeping them running impact suppresses investment in renewable capacity.