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Published: Fri, March 24, 2017
Economy | By Melissa Porter

Climate outlook improves as fewer coal plants built

Climate outlook improves as fewer coal plants built

The global coal boom took a nosedive in 2016 as construction starts on coal-fired power plants fell to almost two-thirds of 2015 levels, according to a report, from Coalswarm, Sierra Club and Greenpeace.

About 570 gigawatts of coal plant capacity was in the pre-construction pipeline as of January, down from 1,090GW a year earlier, a study by the environmental groups Greenpeace, the Sierra Club and Coalswarm reported.

China a year ago imposed restrictions on further expansion of coal-power capacity amid increasingly low utilization rates at existing plants, according to the report.

Tim Buckley, director of energy finance studies at the IEEFA, a pro-green energy think tank, said the falling demand for coal power in China and India and plans to curtail new power stations shows that the world has overestimated the need for the fossil fuel.

The main causes of the decline are the imposition of restrictive measures by China's central government - with the equivalent of 600 coal-fired units being put on hold until at least 2020. The research also found that coal plant retirements are taking place at an unprecedented pace, with 64 gigawatts of retirements in the past two years, mainly in the European Union and the US.

"Growing awareness of the air pollution problems coal causes, the impact of policies to tackle climate change, and the rapid growth and cost-competitiveness of renewable sources of energy, along with emerging battery technologies, are making new coal plants redundant before they are even built", added Paul Massara, a former CEO of RWE npower now working with North Star Solar.

Greenpeace hailed the report's findings, saying 2016 had been a "veritable turning point".

According to the survey, new construction and coal plant permits in China and India have sharply dropped off, while aging coal plants were retired across the USA and Europe. "Closures of old coal plants drove major emission reductions especially in the US and United Kingdom, while Belgium and Ontario became entirely coal-free and three G8 countries announced deadlines for coal phase-outs".

The survey said India experienced a slowdown in coal plant development, driven primarily by the reluctance of banks and other financiers to provide further funds.

"However abrupt, the shift from fossil fuels to clean sources in the power sector is a positive one for health, climate security, and jobs".

Paul Massara, the former chief executive of RWE Npower and now head of a green energy company, North Star Solar, said: "The decline in new coal plants in Asian countries is truly dramatic, and shows how a ideal storm of factors are simply making coal a bad investment".

However Benjamin Sporton, who runs the World Coal Association, suggested that anyone who thought the coal industry was on its last legs was mistaken.

And, in India's case, he said it was "simply not true that renewables are displacing coal".

"An end to the coal plant construction boom brings the possibility of a global phase-out of coal over the coming decades, a prerequisite to reining in climate change", the survey said.

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