Renewable to make investment in coal uncompetitive: Report

Several governments around the world continue to incentivise and underwrite new coal power because market regulations put coal at an economic advantage. In some regulated and semi-regulated markets they also allow the high cost of coal to be passed on to consumers through bills, or they use taxpayers’ money to subsidise coal operators so they can sell power for less than it costs to produce.

Investments in coal mine projects worth around $600 billion the world over risk turning unviable with cost of generating electricity from new renewable projects have turned cheaper than from new coal plants in all major markets, said a recent report by Carbon Tracker.

Coal has long been considered the least-cost option for power generation throughout the world. This narrative is quickly changing as a confluence of factors are disrupting coal’s pre-eminence. Most notably, low-cost renewable energy, which will soon be cheaper to build than to run coal plants.

“Policymakers need to stop new investments in coal power immediately and redesign power market regulation to minimise stranded assets risk accelerate the transition to a low carbon economy,” said the report, titled ‘How to waste over half a trillion dollars: The economic implications of deflationary renewable energy for coal power investments’.

The report also finds that over 60 percent of global coal power plants are generating electricity at higher cost than it could be produced by building new renewables. By 2030 at the latest it will be cheaper to build new wind or solar capacity than continue operating coal in all markets.