Five Asian countries that are responsible for 80% of planned new coal plants worldwide are endangering the Paris climate goals, according to a new report from Carbon Tracker Wednesday.
China, India, Indonesia, Japan and Vietnam are the Asian countries planning to build more than 600 new coal units at a total capacity of 300 gigawatts (GW), the report entitled Do Not Revive Coal from the London-based think tank revealed.
UN Secretary-General Antonio Guterres said earlier that phasing out coal from the electricity sector is the single most significant step to tackle the climate crisis.
Regardless, these countries are ignoring calls to cancel all new coal plants both from the United Nations (UN) and also other international institutions.
Given the deployment of new renewable capacity as a cheaper alternative to coal, around 92% of these planned units will be uneconomic even under a business as usual scenario potentially wasting $150 billion, the report warned.
"Consumers and taxpayers will ultimately foot the bill because these countries either subsidize coal power or prop it up with favorable market design, power purchase agreements or other forms of policy support," the report disclosed.
The economics of 95% of operating coal plants are already at the boiler level, the report said, calculating that this capacity is equivalent to over 6,000 operating units, accounting for around 2,000 GW.
"These last bastions of coal power are swimming against the tide, when renewables offer a cheaper solution that supports global climate targets. Investors should steer clear of new coal projects, many of which are likely to generate negative returns from the outset," Carbon Tracker’s Head of Power and Utilities, Catharina Hillenbrand Von Der Neyen, was quoted as saying in the report.
These five Asian countries operate around 75% of the current global coal fleet with 55% in China and 12% in India.
China is the world's biggest coal power producer with 1,100 GW of operating coal capacity and a pipeline of 187 GW, while the country also leads the global roll-out of renewables of 530 GW installed capacity with the aim of reaching 1,200 GW by 2030.
India is the second-largest coal producer with 250 GW of operating capacity and a pipeline of 60 GW, while Japan has 45 GW of operating coal power and 9 GW in the pipeline.
Vietnam follows with 24 GW of operating coal power and Indonesia is heavily reliant on thermal power of which 45 GW comes from coal.
- New renewables already generate at lower cost than 84% of operating coal
The report found that new renewables can already generate energy at a lower cost than 84% of operating coal and will outcompete everywhere by 2024.
Around 27% of existing coal capacity is already unprofitable and another 30% is close to breakeven generating a nominal profit, according to Carbon Tracker.
"Worldwide, $220 billion of operating coal plants are deemed at risk of becoming stranded if the world meets the Paris climate targets," the report said.
About 80% of the operating global coal fleet could be replaced with new renewables with an immediate cost saving, the report found.
By 2024, new renewables will be cheaper than coal in every major region and by 2026 almost 100% of global coal capacity will be more expensive to run than building and operating new renewables.
The report calculates global coal unprofitability almost doubles to 52% by 2030 and rises to 77% by 2040.
"However, the silence from large polluting countries, including China and India, on more aggressive climate measures at the recent Leaders Summit on Climate spoke volumes, suggesting they still have internal priorities that conflict with policies that seek to mitigate climate change," Carbon Tracker said.
By Nuran Erkul Kaya