Things are not looking good for coal. The notoriously dirty fossil fuel was once the powerhouse of the world, but it’s fallen out of favor thanks to a (glacial) global movement toward decarbonization and the incredible and accelerating advances in renewable energy technologies. Just last month the International Energy Agency (IEA) sounded what may very well be the death knell for coal markets when it announced that solar is now cheaper than coal in the majority of countries around the world. “Those cheaper costs along with government efforts to slash climate-damaging emissions will increasingly push coal off the grid and give renewables 80% of the market for new power generation by 2030,” Bloomberg Green reported on October 12. This shift in energy markets comes at a fortuitous time. “Stop building new coal plants by 2020,” United Nations chief Antonio Guterres pleaded in May of 2019. Guterres’ directive was inspired by a tour of Pacific island countries in immediate danger of disappearing thanks to rising sea levels brought on by climate change, a phenomenon greatly exacerbated by the greenhouse gas emissions from coal combustion around the globe.
While global leaders’ calls for decarbonization and divestment from coal power grow louder around the world, however, coal still has its fair share of strongholds, even as solar threatens to take over completely. China perfectly embodies the world’s ambivalent relationship with coal: as the state calls for net zero carbon emissions by 2060, the actual machinations of the domestic energy mix don’t match Beijing’s rhetoric. In fact, anxieties about the economy and energy security have pushed many of China’s provinces back toward coal in recent months.
While the global transition away from coal will not be a smooth one, sure to be characterized by fits and starts like those of China, it does seem inevitable that coal is a holdout from the past, not a major player in the future of global energy production. While there are still lots of new coal-fired plants being planned and constructed around the world, especially in Asia and Africa, many of these projects are being shelved or at least reconsidered. This trajectory led Climate Home News to ponder an interesting question this week: “Who will build the world’s last coal plant?”
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Until very recently this question would have seemed silly or overly optimistic, but the end of coal is fast approaching as long as it remains as economically non-viable as it is now--and it likely will. “In the past year companies including Samsung and General Electric have announced they’ll stop building coal plants and major funders like Blackrock and the Asian Infrastructure Investment Bank have pledged to stop financing them,” Climate Home News reported.
In order to answer the question of who will be the last to let go of coal, the news agency compiled a short list of the most likely holdouts. The “coal giants” that account for the majority of global coal consumption are China (104 coal-fired plants currently under construction and 127 in planning stages) and Indonesia (52 new plants in planning stages). While China’s numbers dwarf those of any other countries, Beijing’s hard line on decarbonization means that many of these planned plants will be shelved if coal economy provinces fall in line. Many of Indonesia’s planned plantsa are also likely to be cancelled, but Climate Home News’ money is on Indonesia to build the last new coal-fired plant the world will ever see.
Along with the coal giants there are what this article deems as “the waverers”: India, Turkey, Pakistan, and Vietnam; and the “wild cards”: Laos and Bosnia-Herzegovina.
While none of these countries holds a candle to the coal consumption of China and Indonesia, together they represent a pretty decent chunk of the market segment, and an equally sizeable contribution to the global carbon footprint.
Right now, what’s standing in the way of complete decarbonization is the lack of monetization of negative environmental externalities, momentum of the status quo, still-abundant coal reserves, economic fears, and desire of energy autonomy and security, especially in Asia. Renewable energies need to be incentivized and made affordable and accessible to the emerging economies whose energy demand is growing at exactly the time that the world is trying to curb its emissions. In the end it doesn’t really matter which country will be the last to build a coal-fired plant, but how quickly one of them can earn the title.
By Haley Zaremba for Oilprice.com
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