Pakistan dumps coal for wind and solar

Kaghan valley in NE Pakistan
(I thought y'all are maybe a bit sick of pictures of wind turbines.
P.S. stunning, but prolly not safe to visit.) 

From IEEFA:

When a giant infrastructure project in an emerging country doesn’t make sense these days, you can usually count on China’s Belt and Road to be on hand with a bailout check. For the global coal industry, that prospect has been one of the last great hopes for demand growth. Chinese policy banks have committed some $45 billion to coal projects overseas since 2000, according to a Boston University database.

That pattern may be starting to crack. Pakistan, which has been working on an aggressive expansion of new coal power plants under the Belt and Road’s China-Pakistan Economic Corridor, is getting cold feet. The country’s planning minister has told Beijing that it’s not interested in developing the Rahim Yar Khan plant, a potential 1.32 gigawatt project that would probably have left the country’s grid well over capacity.

While the big beasts of potential coal development are China and India, smaller second-ranked markets such as Pakistan are likely the tougher nuts to crack to wean the world from its most polluting fossil fuel.

Whereas new wind and solar is already cheaper than coal in those two countries – one reason project cancellations there are only likely to increase – that’s often not the case in smaller emerging markets, where the plug-and-play availability of thermal plants plus the existence of overseas developers seeking to build them can still look tempting. As my colleague Liam Denning wrote last year, coal is like junk food: ubiquitous, full of calories and (at least at the building stage) cheap.

Still, power generation is more about long-term than short-term costs, and with fuel accounting for about half the price of coal generation, the presence of willing foreign builders can only stave off economic reality for so long. Coal in the Thar region east of Karachi already costs about twice that of equivalent lignite in other markets and the area’s multiple thermal projects may become uncompetitive, Syed Akhtar Ali, a former member of the country’s Planning Commission, wrote in the Express Tribune last year.

That dynamic is accentuated by the speed at which rival sources of energy are dropping in price. Pakistan has a rich endowment of wind and solar resources and has already joined the club of countries where the costs of new renewables are lower than coal. Long-run costs for wind projects are at about half the cost of coal, according to government data cited by the Institute for Energy Economics and Financial Analysis. Given the low penetration of variable renewables and high share of natural gas, solar and wind won’t even need significant storage backup to maintain grid stability.

[Read more here]

If you are not well off, even though an EV might over the long-term be cheaper than an ICEV, you might still buy an ICEV because the up-front cost is less, and you are short of funds.  You know that long term, it makes no sense, but you need a car now, and the fuel payments are postponed into the future.  Sufficient unto the day is the evil thereof. 

If you are a developing country, with limited access to capital, and what there is, is expensive, then the turn-key approach offered by China for building coal power stations is attractive.  Yes, you know that the total cost for the electricity from a coal power station is greater than the cost from wind or solar, bu the up-front cost is less.  (And China will lend you the money to pay for it, anyway.)  Or has been until now.  Just as with EVs, when the sticker price falls to levels comparable with ICEVs, and demand soars, so it is with renewables.  We are now at the point where the operating cost of coal mines is close to or more than the total cost of new renewables (ignoring storage).  And that is the death knell for coal.