This month, the Indian government put out a tender for round-the-clock electricity supply, and the price for solar with battery storage was lower than the price for power generated from coal, says energy analyst Sunil Dahiya.
By Justin Rowlatt
If that is replicated around the world, then coal is dead.
Think of it like a ratchet.
If electricity demand rises, then in more and more countries the cheapest energy plant to build is renewables.
But if there is a sudden shortfall in electricity demand – because of a pandemic, or just because a windy day produces more electricity than expected – then it’s the coal-fired power station that gets switched off.
Now imagine you are an investor considering splashing out on a new coal plant. Typically, you would expect it to operate for 30, even 40 years.
Do you really want to make that investment knowing that every passing year it is likely to spend more and more time sitting idle, at the whim of the weather forecast? Thought not.
And now add into your calculation the knowledge that the voice of the clean energy lobby is only going to grow in volume and force.
After all, coal is the biggest carbon emitter of all fuels, and it also fills our air with carcinogenic particles and toxic chemicals – none of which is currently priced into the cost of burning the stuff.
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Many countries already give renewables priority access to their electricity grids. And it is not just new coal investments that look set to be squeezed out of the market.
According Mr Dahiya, the virus has revealed the fact that much of the Indian coal industry is already effectively bankrupt.
“Our coal-based power plants are operating at less than 60% of capacity”, he told me. “They can’t pay back the money they have been lent.”
No surprise then that international investors are fleeing the sector.
In the last few weeks, the Norwegian sovereign wealth fund – the world’s biggest – and the French bank BNP Paribas have joined financial giants like Blackrock, Standard Chartered and JP Morgan Chase to blacklist coal investments.
What that means, says the IEA’s Mr Birol, is that increasingly it will be governments that decide the future of coal.
He urges them to continue to support renewables and shun coal investments.
But here the picture is less bright.
Coal plays a big part in China’s latest five-year plan, with a potential 20% increase in the size of the coal sector.
It is also helping fund coal-fired power stations in many developing countries as part of the so-called belt and road initiative.
In India, the government is finalising a multi-billion-dollar coronavirus stimulus package that will include assistance for some parts of the coal sector.
Which leaves us in a strange limbo.
Global coal consumption may well have peaked in 2019, say many analysts, but the fuel is likely to wheeze on into the 2030s.
Not an encouraging idea for anyone anxious about the world’s climate.
So here is a final thought for you.
Governments don’t face the same pressure to make money as companies, but they rarely want to subsidise failing industries forever – especially very polluting ones.
First published at The BBC – Tuesday 9 June 2020. See; https://www.bbc.com/news/science-environment-52968716