Coal and $1 trillion in wasted investment?

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Rio Tinto's coal operations in Australia. Copyright © 2014 Rio Tinto (Picture for illustration purposes only)

While the global coal industry continues to push for the construction of more coal-fired power plants, in reality, coal plants are increasingly sitting idle in all of the world’s four largest markets, and global coal consumption is declining drastically, a report on the industry said.

The report, Boom and Bust 2016: Tracking The Global Coal Plant Pipeline, by the Sierra Club, Greenpeace, and CoalSwarm said this was this was particularly evident in China where the government recently took the first step to curb runaway coal plant investment, after the country’s coal use plunged by nearly 6.4 percent in two years.

It said the reported suspension of new permits and new construction starting in half of China’s provinces could affect 60 percent of the 460 new coal-fired units that have been permitted or are in the permitting process.

“With coal use on the decline worldwide, the estimated $981 billion needed to construct the proposed coal plant pipeline represents a massive investment in potentially stranded assets — resulting in an even further downward spiral for the global coal industry,” the three anti-fossil fuel groups said.

In fact, this number is more than one-and-a-half times the amount that the International Energy Agency (IEA) estimates is needed to end energy poverty for the 1.2 billion people currently living without reliable energy access, the report said.

“The era of Big Coal is clearly coming to an end, and it’s long past time to move beyond dangerous, outdated, and polluting energy sources toward an economy powered by clean, renewable sources of energy like solar and wind,” said Nicole Ghio, senior campaigner for the Sierra Club’s International Climate and Energy campaign.

“Coal use keeps falling off a cliff and plants are sitting idle, yet more money is being wasted on misguided attempts at locking in this dirty, dangerous fuel. The hundreds of billions being thrown at coal could instead go toward the booming clean energy sector, helping more than a billion people get access to the clean, reliable electricity that fossil fuels have failed to deliver.”

“Although this research has revealed hundreds of billions being squandered on unneeded coal plants, there’s more at stake here than money,” said Ted Nace, director of CoalSwarm. “In terms of climate safety, the clock is ticking on the transition to clean energy. There is no time to waste.”

“China alone is housing the largest power market investment bubble the world has ever seen. Even after announcing suspension of new permits in 13 provinces, the country could still bring over 500 new coal-fired power plant units online while power generation from coal is falling precipitously on clean energy growth and slower power demand,” said Lauri Myllyvirta, senior global campaigner on Coal and Air Pollution at Greenpeace.

 

 

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