WASHINGTON DC: A major new report released today (16 March) reveals that the boom in coal-fired electricity is going bust.

Worldwide, for every new coal plant built, two have been shelved or cancelled since 2010. This rate is significantly higher in places like Europe, South Asia, Latin America, and Africa, and has reached a six-to-one cancellation rate in India since 2012.

In China coal use declined in 2014, the first drop for 14 years, while at the same time the economy grew by 7.3 percent. From 2003 to 2014, the amount of coal-fired generating capacity retired in the US and the EU exceeded new capacity by 22 percent.

“What’s striking is how quickly the business climate has turned against coal since 2012,” said Ted Nace, Executive Director of CoalSwarm. “Because these projects require large capital outlays, they’re vulnerable to rising perceptions of risk.”

The report, Boom and Bust: Tracking The Global Coal Plant Pipeline, by the Sierra Club and CoalSwarm [1], details the findings of an extensive investigation into every proposed coal-fired power plant worldwide since 2010. The data in the report will be continuously updated on the Global Coal Plant Tracker website. [2]

While the end of the boom spells trouble for coal markets, the current trends must accelerate if the world is to avoid the growing risk posed by climate change, says the report.

The International Energy Agency and others have warned that, in order to keep levels of global warming within the internationally agreed 2°C target, no more than one-third of proven reserves of fossil fuels can be consumed prior to 2050. [3]

A recent report from University College London found that, globally, in order to prevent climate change of more that 2°C, 82 percent of coal reserves must be left underground, along with 49 percent of gas and 33 percent of oil reserves. [4]

The report argues that, even if the trend of two coal plant proposals halted for every one plant built continues, the remaining one-third will account for nearly all of the greenhouse gases that can be emitted before climate change exceeds the 2°C threshold.

Luke Sussams, senior researcher of the Carbon Tracker Initiative said: “Existing global coal-fired power plant capacity will already swallow four-fifths of the 2°C carbon budget over its lifetime, leaving no room for burning the world’s oil and gas.

“This fundamental contradiction means investors must assess their exposure to coal plants that are most at risk of becoming stranded in a carbon-constrained world, and steer clear of funding any new coal plants altogether.”

Analysis by Carbon Tracker has also identified major financial risks for investors in coal producers around the world, with US$112 billion worth of investments in future coal mine expansion and development that is excess to requirements under lower demand forecasts. [5]

The Sierra Club and CoalSwarm say that, as the world turns its attention to the upcoming COP21 climate negotiations in Paris, new and existing coal plants must be phased out, with OECD countries showing leadership. Countries must commit to ending subsidies and policies that favour coal, and instead focus on cutting-edge clean energy solutions.

John Coequyt, Director of the Sierra Club’s International and Federal Climate Campaign, said: “We’ve seen time and again that coal is a risky and expensive investment for anyone, especially developing countries that are on the frontlines of the global energy crisis.

“The pollution wrought by this dirty fossil fuel is a major problem these countries face, and the data from this new report simply reinforces what we’ve been saying all along: they’re moving away from coal toward the clean energy solutions that are taking hold right now, increasingly powering the world in a reliable, cost-effective, and healthy way.”

The report also highlights the fact that, in addition to being the most carbon-intensive electricity source, fine particle pollution from coal causes an estimated 800,000 premature deaths annually.

ENDS

Notes to editors:

1.    Boom and Bust: Tracking The Global Coal Plant Pipeline, by the Sierra Club and CoalSwarm, is available here: http://action.sierraclub.org/site/DocServer/Coal_Tracker_report_final_3-9-15.pdf?docID=17381

2.    The Global Coal Plant Tracker provides information on every known coal-fired electrical generating unit proposed since 1 January 2010: http://endcoal.org/global-coal-plant-tracker/

3.    IEA World Energy Outlook 2012: http://www.iea.org/publications/freepublications/publication/English.pdf

4.    Nature: The geographical distribution of fossil fuels unused when limiting global warming to 2 °C (08 January 2015):http://www.nature.com/nature/journal/v517/n7533/pdf/nature14016.pdf

5.    Carbon Tracker, Carbon Supply Cost Curves: Evaluating financial risk to coal capital expenditure (22 September 2014) http://www.carbontracker.org/in-the-media/the-tide-is-turning-against-the-thermal-coal-industry-high-cost-new-mines-dont-make-sense-for-investors/

For more information:

Cindy Carr, Sierra Club, Washington (202) 495-3034 email: cindy.carr@sierraclub.org

Ted Nace, CoalSwarm, San Francisco (415) 206-0906 email: ted@tednace.com

George Smeeton, Energy and Climate Intelligence Unit, London Tel: 07894 571 153, email:george.smeeton@eciu.net

About the Sierra Club

The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 2.4 million members and supporters. In addition to helping people from all backgrounds explore nature and our outdoor heritage, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org

About CoalSwarm

CoalSwarm is a network of researchers seeking to develop collaborative informational resources on coal impacts and alternatives. Current projects include identifying and mapping proposed and existing coal projects worldwide, including plants, mines, and infrastructure. For more information, visit www.coalswarm.org

About Carbon Tracker

The Carbon Tracker Initiative is a not for profit financial think tank based in London focused on enabling a climate secure global energy market by aligning capital market actions with climate reality.