China, the US, India and European nations are at risk of being burdened with uneconomic, long-term plans to stimulate their economies in response to the coronavirus outbreak by focusing on new coal capacity, a new study from Carbon Tracker warns. The financial thinktank analysed the underlying cashflow of 95% of operating and planned coal plants worldwide, noting that government subsidies are set to support nearly 500GW of new coal plants worldwide at a cost of $638bn. These figures could increase further, as China has already expressed an interest in building more plants to stimulate its economy following the financial slump caused by Covid-19.
Currently, 59% of China’s existing 982GW of coal capacity is running at an underlying loss, according to Carbon Tracker. Of coal projects in the pipeline, around 206GW (61%) would enter the market with negative cashflow, the study noted. Globally, the thinktank found that 46% of global coal plants will be running at a loss in 2020, rising to 52% by 2030 and that 71% cost more to run than building new renewables. In contrast, almost three-quarters of new electricity generation capacity built in 2019 uses renewable energy – an all-time record.
Carbon Tracker’s co-head of power and utilities and co-author Matt Gray said: “China and other governments may be tempted to invest in coal power to help their economies recover after the COVID-19 pandemic, but this risks locking in high-cost coal power that will undermine global climate targets. As such, global responses have been issued to disincentivise coal use. Carbon prices have increased by 45% in 2019, Carbon Tracker notes. In fact, a recent Carbon Tracker report found that coal-fired power plants in the EU are becoming increasingly unprofitable as they have incurred losses worth €6.6bn.
Source: edie.net
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