Global new coal plant pipeline keeps shrinking

Global new coal plant pipeline keeps shrinking

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Number of coal plants in permitting and planning process fell another 22% in 2017 – a 59% fall over the last two years.

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The number of new coal plants under development worldwide continues to fall dramatically with a new report revealing a 28 per cent fall in newly completed coal plants in 2017 compared to 2016.

The report, Boom and Bust 2018: Tracking The Global Coal Plant Pipeline by Greenpeace, the Sierra Club and CoalSwarm, also revealed a 29 per cent fall in the number of plants on which construction commenced in 2017. (Disclosure: The author works for CoalSwarm, albeit on a different project.)

In 2017, the number of plants in the permitting and planning process fell by 22 per cent compared to 2016, bringing the decline to 59 per cent over the last two years.

The rapid decline in the number of coal plants being proposed, built and commissioned offers hope of achieving the 2015 Paris Agreement goal of limiting global warming to between a 1.5 °C and 2 °C temperature increase.

In 2016, the consultancy Climate Analytics estimated that to achieve the 1.5 °C or even the 2 °C target would require a rapid phasing-out of coal power generation.

However, achieving those climate goals requires acceleration of the rate of decommissioning of old plants and an end to new plants entering construction.

“The sum of all carbon dioxide emissions from coal plants operating and under development is 233 gigatonnes, higher than the budgets for 1.5 °C and 2.0 °C. In order to meet the 1.5 °C budget, all current development of coal plants must be cancelled and much of the current fleet must be retired before plants reach 40 years of age,” the report states.

According to the new report, on current trends, the capacity of closing old plants may exceed the capacity of newly commissioned plants in 2022.

India and China go cold on most new coal

Most of the recent cuts to new coal plant capacity are due to dramatic policy changes in China and India.

In China, the central government has imposed further curbs on the profligate coal plant building spree pursued by regional governments and power plant developers, often with support from provincial banks.

Faced with growing coal plant overcapacity and the prospect new coal plant building would undermine its efforts to cut air pollution, in 2017 the central government suspended hundreds of coal projects. Between them they had a capacity of 170,000 megawatts (MW).

All up, China has suspended 444,000 MW of new coal plant projects in the last two years. However, as the report makes clear, some of these decisions are tenuous with some plants suspended only until the end of 2017 and others until 2020. There are even 16,000 MW of coal plants which have notionally been suspended by central government agencies but where construction is proceeding nonetheless.

While China is moving to slash the coal plant boom at home, it is actively supporting it elsewhere around the world. According to Boom and Bust 2018 Chinese companies are involved in the construction, ownership or financing of 16 per cent of all coal power stations under development outside China.

In India, the transformation of the power sector has been driven by different factors.

Many private power projects are now stranded without access to private finance while some have either a guaranteed coal supply or a power purchase agreement. As private finance has dried up, all of the 6920 MW of new coal plants that began construction in 2017 are owned by government-owned utilities.

With a limited number of new coal projects proceeding in India and major investments in renewables accelerating, 2016–17 saw new renewables capacity outpace thermal power plant additions for the first time ever.

The new coal plant club gets smaller

As India and China curb coal, the pipeline of new coal plants is growing ever more confined to a smaller number of countries.

Although new coal units are under construction at 260 locations in 35 countries, an emerging trend is that new plants are entering construction in only a handful of countries.

In 2017, new coal plant construction commenced at more than one location in only seven countries: Bangladesh, China, India, Indonesia, Japan, Pakistan and South Korea.

In all these countries, growing civil society pressure, public alarm at pollution from coal plants and associated infrastructure and increased wariness of private banks and insurance companies suggests that the coal power plant boom of the last decade may be rapidly drawing to an end.

As new coal plant construction dries up, the prospect of ensuring a safe climate will hinge on how fast the existing fleet of old coal clunkers can be closed down.

Bob Burton is the Editor of CoalWire, a weekly bulletin on global coal industry developments published by CoalSwarm. (You can sign up for it here.) Bob’s Twitter feed is @BobBurtonoz.

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  1. john 3 years ago

    Reading the article the stark fact is that there is a down turn in building new coal plants.
    Further more in the more forward thinking countries as in China and to a lesser extent India no new Coal Plants will be built.
    The outlook for Thermal Coal producers is dismal as they need more demand to push up the price of their product.
    No wonder the largest diversified miner in the world got rid of its Thermal Coal companies a few years ago.
    I do not see a future for Thermal Coal inside 10 years.

    • Steve159 3 years ago

      Wouldn’t it be fascinating to be a fly-on-the-wall watching the LNP politicians trying to square the circle. It’d be riveting, in a watching-a-slow-train-wreck kind of way.

      • john 3 years ago

        In their slow think kind of way they will just sit there dumb and not realise that the world has changed but blame some one else preferable that other bloke or some aspect of society unfortunately.

        • Pedro 3 years ago

          Its all the fault of the Greens and Labor 😉

          • john 3 years ago

            ha ha possibly the sturdily of stupid is ever expanding

          • Joe 3 years ago

            Yes, after what, nearly 5 years of COALition government ..its STILL all Labor’s fault.

      • david_fta 3 years ago

        watching the LNP politicians trying to square the circle. It’d be riveting, in a watching-a-slow-train-wreck

        As a child, I was told to not mock the intellectually disabled kids.

        • Hettie 3 years ago

          But the LNP RWNJs claim to be adults, so mock away.

        • john 3 years ago

          And you did not mock mock kids with problems but now we have adults with problems and are intellectually challenged so we have to challenge them because of the facts they give us which are wrong.
          In other words alternate facts.
          WHICH as you know are wrong.

          • Joe 3 years ago

            I’m rather curious about the terminology we all see bandied about like ‘wrong facts’, ‘alternate facts’, and ‘fake news’. To me these expressions are all self contradictory and we should stop promoting the use of these expressions. You can only have Facts, or News anything else is just madeup or outright lies and needs to be called out as such. ‘Wrong facts’ and ‘alternate facts’ can be no such thing by definition, it is just not telling truths, its what we used to call straight out…’lying’.

      • john 3 years ago

        The unfortunate fact is they do not realise the futility of the inept knowledge

    • Joe 3 years ago

      The MCA, Rupert’s newsrags and the CoalerFanboy Radio Shockjocks are still banging on about building New Coalers in Australia and of course their favourite is the…HELE….which they want the COALition to finance and build. Why not throw another stranded asset or two into the mix with Adani’s Megacoalmine.

      • john 3 years ago

        And at 12c or more a kWr price it will not happen

      • solarguy 3 years ago

        Oh, I know because we will end up paying for it. Nothing quite as sweet as a tax payer funded stranded asset.

        Remember Joe, we have a duty to transfer our hard earned to the uber wealthy kings of the world……………..not.

  2. Jon 3 years ago

    Great news 🙂

    An almost 60% reduction in 2 years is impressive, what is the % in capacity if the ones that are getting approved are generally smaller?
    it’d be nice to see some numbers on closures as well.

    Finance companies aren’t stupid, every report like this is another nail in the Charmichael Coal Mine, they aren’t going to put my net into a venture that needs 20+ years to pay for itself in a declining market.

  3. Francesco Nicoletti 3 years ago

    Any data on closures, giving net coal plants. Are these plants bigger or smaller then plants being retired?

    • john 3 years ago

      No as i understand it no plants closing.
      However the present Coal powered Energy Power Plants will close in the next 10 to 20 years an yes they will not be replaced with the same 1980′;s technology as you realise this is not exactly the best way to go.

      • Bristolboy 3 years ago

        It is wrong to say “no plants are closing”. In the UK many plants have closed and I believe the same is true for elsewhere in Europe and North America. The closures may not be enough to offset the new projects opened in Asia, but they certainly make a big dent in the net change.

  4. Mike Dill 3 years ago

    I wonder what the capacity factor will be for those new coal plants. Running less than 70% will be loss-inducing.

    • neroden 3 years ago

      Nearly all the new coal plants in China are running at less than 70% — I think the average for all their coal plants is below 50% last I checked. The central government is ordering the closures of inefficient coal plants in an attempt to bring up the usage rate of the newer ones. The central government has also ordered that renewables be given priority dispatch. Unfortunately a bunch of the regional governments continue to build unwanted coal plants — it looks like this is for developer kickbacks… the regional governors get their kickbacks whether the plant operates or not.

      I think there’s more market discipline in India, but I haven’t seen actual numbers on the capacity factors.

  5. phillyc 3 years ago

    I’d like to see what GW of Coal plants are being commissioned and decommissioned.

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