Only 10% Coal Plants To Be Decommissioned By 2030: Report

Only 10% Coal Plants To Be Decommissioned By 2030: Report Photo: Pexels

Only 10% of the world’s existing coal power capacity is slated for decommissioning by 2030. More coal decommissioning transactions can be closed in the next three to five years, according to a report by IEEFA. Governments, investors and philanthropic organisations should invest the effort to identify these opportunities.

The decarbonisation of electricity in emerging market economies can be achieved through a market-based, economically viable transaction to accelerate the transition of generation from coal to clean energy, plus storage in many instances. Coal generation assets can be ramped down and decommissioned, while renewables and storage assets are invested in to replace them. This report analyses five specific opportunities around the world where a coal-to-clean transaction could be economically and practically feasible well before 2030.

Coal-to-clean transactions with a shift starting within the next five years are viable for the five specific opportunities assessed without subsidies, and capital can make an economic profit on investment. Transactions can be structured to pay for all costs associated with a coal-to-clean transition. This includes not only the costs of coal facility shutdown and new generation capacity but also societal/public costs such as retraining directly and indirectly employed workers, upgrading grid infrastructure to support greater renewables, site decommissioning, recovery of the equity losses of shutting down an operational asset, and financing and power purchase agreement (PPA) restructuring costs.

Many markets have young coal plants with substantial time remaining on their independent power producer contracts. For example, in Vietnam, nine units totalling 5.6 gigawatts (GW) have been brought online since 2020 and another 27 units totalling 10.5GW were commissioned from 2015-2020.

Currently, around 15.5 billion tonnes of carbon dioxide is generated every year by 2TW of coal-fired power. The International Energy Agency stated that in order to achieve net-zero emissions by 2050, a complete coal phase-out will be required by 2040. The analysis shows that the closure of some coal power plants could be accelerated by 10 or more years, each yielding a substantial carbon reduction impact.