Issue 2/2018

No end in sight for coal

Joachim Wille, 16 Apr 18
Solar and wind energy are growing apace, overtaking nuclear and coal in countries including China and India. Nevertheless, the world is still a long way from kicking its coal habit – with some countries actually moving in the opposite direction.

The global energy transition is flourishing. Last year, worldwide installed PV capacity grew by over 100 gigawatts (GW), while wind capacity saw an increase of 50 GW, according to preliminary estimates by industry associations and market research bodies.

The ongoing clean energy boom, fueled in particular by plummeting PV costs, stands in stark contrast to the state of the global nuclear industry, which remained essentially stagnant as overall capacity grew by just 0.3 GW. Even in the two coal heavyweights China and India, the expansion of clean energy outpaced coal.

Meanwhile, China’s new PV installations in 2017 alone exceeded the country’s entire nuclear power capacity. Nevertheless, the transformation of the world’s energy system is far from a done deal. Although hopes have been raised in recent years by declining global consumption of coal – the number one climate killer – a new study has revealed that there is little cause for celebration: the slowdown in new coal capacity in China and India is partly offset by expansion in other fast-growing emerging economies.

800 percent growth in coal capacity?

In other words, the world remains a long way off from a coal phase-out strategy that might enable compliance with the two-degree warming limit set out in the Paris agreement on climate change in 2015. The study was published by the Potsdam Institute for Climate Impact Research (Pik) and the Mercator Research Institute on Global Commons and Climate Change (MCC) in Berlin.

The number of coal-fired power plants worldwide is in fact still growing, despite a spectacular pledge by China and India in 2016 to slash their expansion plans by half. For instance, Turkey, Indonesia and Vietnam aim to increase their coal power capacity by a combined 160 GW – equivalent to all of the EU’s active coal plants, according to experts.

Other countries are also planning substantial increases in coal capacity – in the case of Egypt, the planned growth is as high as 800 percent – with dramatic consequences for their carbon footprints. Carbon emissions from Vietnam’s coal plants are expected to increase almost ten-fold by 2030, while a four-fold increase is predicted for Turkey.

Call for pioneers

Pik chief economist Ottmar Edenhofer warns that in spite of the remarkable rise of renewables, the coal problem will not go away of its own accord, and calls for a concerted global coal phaseout. He proposes “substantial carbon pricing” as the most suitable instrument to this end, adding that while mechanisms could take different forms from one country to the next, it is vital that a coalition of pioneers take the first step “by the end of this decade.”

Over 25 countries have pledged to phase out coal, including industrialised nations such as the UK, France, Italy and Canada, alongside others including Mexico and Chile. An example of just how effective carbon pricing can be is provided by the birthplace of industrialisation: in the UK, a minimum price of around EUR 20 per tonne of carbon emissions was introduced, causing the share of coal in the electricity mix – formerly 40 percent – to fall to just 2 percent.