Global Slowdown in Coal Power Investment Continues, but Chinese Power Industry Pushes for Hundreds of New Plants
SYDNEY, March 28, 2019: For the third year in a row, the number of coal-fired power plants under development worldwide dropped steeply in 2018, according to a new report released today by Global Energy Monitor, Greenpeace India, and the Sierra Club.
The report, Boom and Bust 2019: Tracking the Global Coal Plant Pipeline, is the fifth annual survey of the coal plant pipeline. Its findings include a 20% drop in newly completed coal plants (53% in the past three years), a 39% drop in new construction starts (84% in the past three years), and a 24% drop in plants in pre-construction activity (69% over the past three years) year-on-year.
Coal plant retirements continued at a record pace. The U.S. accounted for over half (17,614 megawatts, or 45 units) of global retirements, the second highest U.S. retirement level on record, despite efforts by the Trump administration to prevent the closure of aging plants.
The decline in most coal power growth indicators reflected an increasingly constrained political and economic climate for coal plant developers, including financial restrictions by over 100 institutions and coal phase-out plans in 31 countries. However, state-owned financial agencies in China, Japan, and South Korea have emerged as the largest sources of funding for coal plants outside their borders, respectively.
A glaring exception to the global decline in coal plant development was China, where satellite photos show developers have quietly restarted construction on dozens of suspended projects. A new report by the China Electricity Council, which represents the country’s power utilities, proposes setting the country’s coal capacity cap at 1,300 gigawatts, a level that would allow 290 gigawatts of new capacity to be added—more than the entire coal fleet of the U.S. (259 gigawatts).
The Boom and Bust 2019 report warns that global climate goals cannot be met without a full halt in new coal plants and a rapid retirement of operating coal plants.
“Since 2015, the amount of coal-fired capacity under development has fallen by sixty percent,” said Christine Shearer, researcher and analyst for Global Energy Monitor. “But just currently operating coal plants alone are incompatible with keeping global warming to well below two degrees. We need to radically phase down coal plant use over the next decade to keep on track for Paris climate goals.”
“As the cost of clean, renewable energy solutions like wind and solar continue to outpace outdated fossil fuels, it’s only a matter of time before coal is a thing of the past worldwide,” said Neha Mathew-Shah, environmental justice representative for the Sierra Club’s International Program. “The U.S. is on track to completely phase out coal and transition to a 100 percent clean energy economy by 2030, and we are at a critical stage where grassroots movements, especially in the Global South, fighting to move beyond coal and for just transition to clean energy need to be elevated and supported.”
“As the Chinese government starts to design energy targets for the next decade, power generators are pushing for hundreds of additional coal-fired power plants. While this would not necessarily breach China’s pledges under the Paris Agreement, another coal power construction spree would be near impossible to reconcile with emission reductions needed to avoid the worst impacts of global warming. China’s energy targets have a greater bearing on global emissions than any other national policy decision,” said Lauri Myllyvirta, lead analyst at Greenpeace Global Air Pollution Unit.
Jan Erik Saugestad, CEO of Storebrand Asset Management (over US$80bn AuM) said “The appetite for building new coal plants is waning around the world, including across the US which is undergoing a coal crash.”
“But these trends must be accelerated and huge climate risks remain, so wherever they can, fund managers should commit to a full phase out of coal, and be clear that coal has no future if we want to limit global warming. This must include limiting investments in companies involved in current and new coal fired power plants.
“The report is clear: emissions from currently operating coal plants, utilized at an average rate and lifetime are too high to hold global warming to 1.5°C or 2°C. This needs to be a wake-up call – investors should plan for their exit, while increasing their investments in solutions.
Note: The average size for coal-fired generating units is 350 megawatts, with most power stations having two or more such units.
Lauri Myllyvirta, Greenpeace, +86 157 1002 1563, or [email protected]