More stringent regulations against air pollution, rising costs for CO2 emissions and high fuel prices seem to drive thousands of coal-fired power plants worldwide into the red. According to a previously unpublished study by the London-based analysis house Carbon Tracker, 42 percent of the 6,685 investigated vessels already generate losses By 2040, the proportion of power plants with negative numbers will rise to more than 70 percent, predict the authors – and even at lower fuel costs than today. On the other hand, if European Union states shut down coal-fired power plants in line with their climate targets, they could avoid welfare losses of $ 89 billion, according to Carbon Tracker.
Founded in 2009 by financial analysts, fund managers and energy experts, Carbon Tracker specializes in the impact of climate change on financial markets. The 2015 London think tank caused a furore with its investigation that up to two-thirds of the world’s oil, gas and coal reserves should not be burned to avoid dangerous levels of climate change.
How the economy of the kilns is calculated
Coal-fired power plants generate about 37 percent of the world’s electricity; in Germany, the proportion is 39 percent. Today, however, renewables across the EU could deliver cheaper electricity than new coal producers, the analysts write in their new study. They calculate the profitability of existing coal-fired power plants on the basis of so-called long-term marginal costs:
Nevertheless, according to Carbon Tracker, the continued operation of 35 percent of all coal-fired power plants worldwide means that companies are more expensive than if they would instead build equal capacities with regenerative energy technologies.
„The costs for renewables fall so heavily that they can displace even existing coal-fired power plants in some regions of the world,“ said Sebastian Ljungwaldh, one of the study authors, the SPIEGEL. In the US, for example, despite the support of President Donald Trump, the coal industry barely manages to resist renewables and gas – „for purely economic reasons“.
By 2030, the construction of renewable power plants will be cheaper than the operation of 96 percent of all existing and planned coal-fueled oil, the analysts predict. They have based their forecasts on the average regional coal prices for the years 2014 to 2017 – ie significantly lower costs than today.
Nevertheless, analyst Ljungwaldh explains that many states are still holding on to coal and even having some new ones built, with the influence of the lobby, the striving of politicians for jobs, inadequate storage facilities and existing infrastructure such as power grids that are geared to central large-scale power plants. In the long term, however, coal will simply be too expensive.
Germany’s largest coal-fired power company RWE still generates profit with lignite today. However, this will change in the next few years due to rising emission costs, predicts Carbon Tracker. Should RWE shut down its power plants in line with the Paris Climate Agreement instead of continuing to operate it, the company could avoid losses of more than $ 8 billion, the study said. It will be released shortly before the start of the World Climate Change Conference this coming Monday in Katowice, Poland.
According to the IPCC, 59 percent of all coal-fired power plants worldwide must be shut down by 2030 in order to limit the increase in global warming to an average of 1.5 degrees. This seems to be illusory today. But Ljungwaldh is convinced that the energy turnaround will accelerate. „Our analysis shows that a low-cost, no-coal electricity system is not a clean, green convenience, but economically unavoidable.“ Whether governments see it that way, will show in Katowice.
