A recent report has found that if we are to meet the objectives set out the 2016 Paris agreement, we need to shut down coal-fired plants globally at a faster rate while also halting the construction of new plants. The report, compiled by the Global Energy Monitor, stated that all coal power plants would need to be closed by 2040 with no new ones being built for the goals stipulated in the agreement to be achieved.
Global Energy Monitor is a nongovernmental organization that studies the evolving global energy landscape, creating reports, databases and interactive tools.
Developed economies will also be expected to close their plants about 10 years earlier than the worldwide phase-out. This will require nations in the Organisation for Economic Cooperation and Development to close 60 GW of coal-power capacity annually until 2030, which is roughly 4.5 times the amount recorded in 2022. Additionally, non-OECD nations will need to close 91GW of coal power capacity annually until 2040.
The international survey also found that while the total amount of planned and existing coal plant capacity outside China dropped in 2022, phase-out has slowed in comparison to prior years.
The report’s lead author, Flora Champenois, stated that at this point, the transition away from new and existing coal plants wasn’t happening as fast as it needed to avoid climate chaos. Champenois also noted that the unveiling of new coal projects would only lead to steeper commitments and cuts in the future.
In 2022, the existing fleet of coal plants around the globe grew by about 19 GW, with most of the growth being commissioned in China. China also plans to significantly increase its coal use with plans to build more plants in an effort to increase its power capacity by 126 GW, which will counterbalance the capacity retired across the European Union and the United States combined in 2022.
Last year, the U.S. retired more than 13GW of coal power capacity while closures in the European Union stood at 2.2GW in the same period. It should be noted that retired capacity in the EU dropped greatly from 14.6 GW in 2021, primarily in response to Russia’s invasion of Ukraine, which caused the cost of gas-fired power generation to rise considerably.
Centre for Research on Energy and Clean Air’s lead analyst, Lauri Myllyvirta, added that clean solutions would need to be deployed and existing policies would need to be enforced better to restrict the launch of new coal projects.
Given the high demand that coal extraction companies such as Warrior Met Coal Inc. (NYSE: HCC) are seeing, it won’t be easy to completely shift away from coal energy in the near-term.
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