In India, 17 per cent of the 283 GW coal fleet is set to become uncompetitive in 2020, rising to 50 per cent in 2022 and 85 per cent in 2025, international researchers said on Tuesday.
They say phasing-out and replacing uncompetitive coal plants with renewable energy plus storage would generate savings of $2 billion in 2020, $8 billion in 2022, and $17 billion in 2025.
Researchers of Rocky Mountain Institute, Carbon Tracker Initiative and Sierra Club in a report offer financial data and specific tools for making global coal phase-out feasible.
The report, ‘How to Retire Early: Making Accelerated Coal Phase-Out Feasible and Just’, reveals that new renewable energy is already cheaper than continuing to operate coal plants in much of the world.
It lays out specific financial strategies that utilities and policy-makers can use to engineer a faster phase-out of coal in various regions of the world.
This new analysis shows that new renewable energy is not only cheaper than new coal plants virtually everywhere, but that it is already cheaper to build new renewable energy capacity, including battery storage, than to continue operating 39 per cent of the world’s existing coal capacity.
The share of uncompetitive coal plants worldwide will increase rapidly to 60 per cent in 2022 and to 73 per cent in 2025.
Replacing the entire global coal fleet with clean energy can be done at a net savings to society as early as 2022.
“A faster transition from coal to clean energy is within our grasp and we show how to engineer that transition in ways that will save money for electricity customers around the world, while aiding a just transition for workers and communities,” Rocky Mountain Institute, Managing Director, Paul Bodnar said in a statement to IANS.
The authors estimate that replacing the entire fleet of global coal plants with clean energy plus battery storage could be done at a net annual savings as early as 2022.
The rapidly declining costs of renewables push net annual savings to $105 billion in 2025.
All this, the report states, is before considering coal’s dire health, climate, and environmental impacts, or accounting for the social and environmental benefits of reducing pollutants.
Currently, coal phase-out hasn’t kept pace with eroding economics.
To keep the Paris Agreement’s temperature targets within reach, global coal use must decline by 80 per cent below 2010 levels by 2030, requiring rapid transition in Organisation for Economic Co-operation and Development (OECD) countries over the next decade and phase-out in the rest of the world by 2040.
India has already set aggressive targets for renewable energy development, aiming to increase clean energy output from 86 GW in 2019 to 175 GW by 2022, and 450 GW by 2030.
Although India expects continued growth in energy demand, the government has identified almost 23 GW of obsolete coal plants to be considered for retirement by 2022, and an additional 25.6 GW to be considered for retirement by 2027.
Aside from meeting growing demand, coal also employs hundreds of thousands of people in India, both directly and indirectly.
Therefore, just transition for affected workers will be of particular importance.
Today, 17 per cent of the Indian coal fleet is uncompetitive compared with renewables with storage, and the immediate phase-out and replacement of this portion of the fleet could bring India $2 billion in annual savings, says the report.
The remaining 83 per cent could be phased out and replaced at a cost of $23 billion immediately.
However, these numbers are rapidly changing: by 2022, 50 per cent of the Indian coal fleet will be uncompetitive, and 85 per cent by 2025.
In 2025, savings from retiring uncompetitive plants will increase nearly nine-fold compared with 2020, to $17 billion per year.
The remaining 15 per cent would cost $2 billion to replace in 2025.