The world’s hunger for new coal power plants has abruptly and unexpectedly slumped, improving the chance of averting the most dangerous levels of global warming, a group of environmental organisations says.
In China and India, home to 86 per cent of coal-fired power stations built globally in the past decade, construction of new projects has been frozen at more than 100 sites, the Sierra Club, Greenpeace and other groups say in a report published on Wednesday.
Worldwide, more coal power is now on hold than the amount that developers began building over the past year, it notes. A record amount of capacity has been shut in the past two years, mostly in the EU and US.
“This is good news. It’s not what any of us were expecting,” said Paul Fisher, a former senior regulator at the Bank of England and now a senior associate at the Cambridge Institute for Sustainability Leadership, a university body.
The slowdown means the main goal of the Paris climate change accord — keeping global temperature rises below 2C compared with pre-industrial revolution levels — may be “within feasible reach”, says the report, the third annual survey of the global coal plant pipeline.
But this would require a big reduction in countries such as Vietnam, Turkey, Indonesia and Japan, where a slew of new coal power plants is planned, and an extension of the trends seen in India and China.
The number of stalled projects underlined the danger of costly fossil fuel generating assets being left stranded, Mr Fisher added. Mark Carney, BoE governor, has warned this could cause serious financial problems for investors.
“It’s not normal to see construction frozen at scores of locations,
“Presumably, people have invested money in all these projects that have been frozen and if they are not completed, that money is lost,” Mr Fisher said.
The report’s findings show 2016 was unusual, said Ted Nace, a co-author of the report and director of CoalSwarm, a network of researchers that tracks the coal industry. “It’s not normal to see construction frozen at scores of locations,” he said.
Beijing has curbed expansion in response to falling utilisation rates at existing plants. In India, power demand has not kept up with supply, while a “revolution” in increasingly affordable renewable energy has made coal financing less attractive, the study suggests.
Workers unload coal from a train in China’s Anhui province. Construction of new coal-fired power plants has been frozen at more than 100 sites across China and India © Reuters
Benjamin Sporton, head of the World Coal Association, the industry body, said it should not come as a “huge surprise” that some new coal plants had been put on hold.
He agreed there was a “degree of overcapacity at the moment” in India, where demand had fallen short of expectations. But any lull in construction was likely to be temporary, he said, pointing to the “very substantial” sums India was investing to make its coal power plants more efficient.
China was reducing coal station numbers because of broader shifts in its economy rather than a wholesale defection from coal power, while “very substantial” increases in coal power were planned in countries such as Indonesia and Vietnam, he added.
Such developments could threaten the Paris agreement’s goals. . A study by Oxford university researchers last year concluded that to have a 50 per cent chance of meeting the accord’s 2C target, no new fossil fuel electricity generation plants could be built after 2017 unless they had carbon capture systems.
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