Peak coal getting closer

From Carbon Brief:

Total global coal capacity continues to inch up, but a peak is on the horizon. In the first half of 2018, retired capacity has nearly matched newly operating plants and the global pipeline for proposed coal is quickly eroding.

This is according to CoalSwarm’s latest Global Coal Plant Tracker results, which we completed in July 2018. Our figures confirm the sector is in the midst of rapid change. [Carbon Brief recently used the data from the tracker to produce a global coal plant map and timeline.]

Even if global coal capacity peaks soon, however, the sector is set to breach its share of internationally agreed climate goals — unless large numbers of coal plants retire early.

The most dramatic changes are taking place in China and India, which are both dealing with a growing number of coal plants operating well below optimal levels or are frozen in construction. In China, this is primarily due to power overcapacity. In India, it is due to financial issues and increasing competition from renewable power.

The amount of coal power capacity in pre-construction stages has declined every year since 2015. So far, 2018 has been no exception, with proposed capacity dropping 20% in the first half of 2018 (January to June), from 447 gigawatts (GW) at the end of 2017 to 364GW by July 1, 2018, a decline of 83GW. Overall, the pre-construction pipeline has fallen two-thirds since 2015, when it was 1,090GW.

Planned new coal capacity has been cancelled around the world, with particularly rapid falls in China and India. At the end of 2015, China had plans to build 515GW of new coal capacity. That figure now stands at 76GW. In India, the pre-construction pipeline has shrunk from 218GW in 2015 to 63GW today.

Most notably, our figures show that less than 2GW of new coal capacity has been proposed in either China or India in 2018 – a significant development for the two countries that have been the site of 85% of the world’s new coal power capacity since 2006.

While some analysts predicted the drop in China and India might be replaced with an increase throughout other parts of the world, the pipeline across the rest of the world also continues to decline. Notably, Japan has called off 3.6GW of proposed coal capacity since 2017, while South Korea will stop issuing permits for new coal plants.

Global coal capacity additions and retirements (Source: Carbon Brief)

That's the good news. The bad news is that given how long power stations last,  we will still be burning coal long past the dates where we ought to stop if we are to limit global warming to 2 degrees C--unless we close coal power stations before they are worn out.  As global temperatures rise, the political pressure to reduce how much coal is burnt will rise and rise.  And as the alternative, renewables plus storage, gets ever cheaper, coal power stations will also stop making money.  Those scissors will be irresistible.  Coal power stations built now will be stranded assets, perhaps within as little as 10 or 15 years.

Coal is the biggest global contributor to heat-trapping CO2, making it essential to phase out its emissions to meet international climate goals.

The most cost-effective route to meeting the Paris Agreement’s “well below” 2C limit would see richer OECD and EU nations ending unabated coal use by 2030, China by 2040, and the rest of the world by 2050, according to climate science NGO Climate Analytics.

However, just the currently operating coal capacity of these regions already exceeds those targets, even without new development. The figure below shows total coal capacity through to 2060 if all operating coal plants retire as currently scheduled, or at 40 years of age — the current average retirement age — with plants that are already older than 40 years closing by 2030.

Source: Carbon Brief