The amount of new coal power capacity around the world has fallen by a record-breaking 41% over the past two years, while a mammoth 500 coal-fired units have been closed in the past three, according to a new report.
Experts can now foresee what seemed unthinkable just a few years ago: the moment when the global coal fleet actually starts to shrink.
But this news comes as the International Energy Agency said last year global CO2 emissions hit a historic high of 32.5 gigatonnes, following a surge in output from Asia after three years of staying flat.
In that same period the growth of the global coal fleet has diminished dramatically, led by China’s response to the twin crises of air pollution and overcapacity. Even so, it has continued to grow nonetheless.
In the latest Boom and Bust report, analysts from Greenpeace, the Sierra Club and CoalSwarm said that if current trends continue the global coal fleet will start to shrink in 2022. That is when the number of retirements is set to overtake the amount of new coal capacity.
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This is an overly optimistic report, at first sight. If you removed the 2017 data from the chart above, it would be hard to detect a falling trend. Total construction of new coal power stations up till 2016 has been trending sideways, not down. It's true that the peak 2015 construction was offset by a high level of power station retirements but even deducting retirements from new construction the trend is only modestly declining.
However, the news is actually better than it looks. First, China's new power station construction is declining fast. And India's investment has virtually stopped, as the chart of quarterly data below shows.
In India, investment in coal power stations has collapsed because the costs of solar power have plunged. In China, the drive towards renewables is driven not just by falling costs but also by horrendous air pollution.
The other hope of the coal spruikers was Japan. After Fukushima, Japan planned to build hundreds of coal power stations to replace the output that would be lost when nuclear power stations closed down. At the time, coal was still cheaper than renewables. But today new coal is far more expensive than new renewables. And Japan has had a rethink.
Japan would seek to make renewable sources central to its energy supply, and ensure a stable flow from weather-dependent solar and wind with advances in battery and hydrogen power technology, under a forthcoming strategy through 2050.
The new strategy, based on the 2015 Paris climate agreement, aims to reduce carbon emissions. A draft version seen by Nikkei sets no numerical targets for the electricity mix and leaves the door open for the use of nuclear energy while aiming to lessen reliance on it.
An energy policy roundtable under the Ministry of Economy, Trade and Industry will present a final draft of the strategy as soon as next month. It will be reflected in an energy plan due out this summer covering the years until 2030, but the strategy will provide longer-term guidance.
Renewables' potential to form a mainstay of Japan's energy supply has grown thanks to falling costs for solar and wind power, as well as advances in digital technology, according to the draft.
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We won't be able to definitively say there's a new, sharply declining trend in new coal power station construction until we get 2018 data. But the collapse in storage, solar, and offshore wind costs, as well as the ongoing more muted decline in onshore wind, suggest that coal power station construction peaked in 2015, is falling fast, and will likely stop completely within a couple of years. So, even though CO2 emissions rose in 2017, that is likely the peak, especially when you consider the explosive growth in EVs (next post).