According to a recent analysis by climate finance thinktank, Carbon Tracker Initiative, solar plants will soon be cheaper to build than coal-fired power stations, which is great news for investors and fans of renewable energy.
Its report said that renewable power was cheaper than coal plants in all large markets, including Australia, as the price of wind and solar power continues to fall. It found that over 60% of global coal power plants are generating electricity at higher cost than it could be produced by building new renewables.
“By 2030 at the latest it will be cheaper to build new wind or solar capacity than continue operating coal in all markets,” said the Carbon Tracker Initiative.
Earlier this month, Sir Christopher Hohn, the billionaire hedge fund manager and co-founder of the Children’s Investment Fund Foundation (CIFF), called on major EU and UK central banks and financial institutions to end financing of coal and threatened to sue Barclays, HSBC and Standard Chartered if they continue financing new coal projects.
“Coal is the single largest source of greenhouse gas emissions globally and the risks of its continued use in the power sector are not being adequately addressed by regulators and the financial system,” he said in a statement on the CIFF website.
Australia is the world’s second largest thermal coal exporter after Indonesia, and is the biggest trader in metallurgical coal, which is used in steel making.
The export value of both forms of coal dropped notably last year. The spot price of thermal coal slumped more than a third from US$100.73 to US$66.20, its biggest fall in more than a decade.
Before the coronavirus outbreak, the government’s latest resources and quarterly energy report estimated the declining price would cut earnings from thermal coal exports from a record A$26bn in 2018-19 to A$20.6bn this financial year.
In terms of coal use, the International Energy Agency found it declined last year, but forecast a slight increase over the next five years due to rising demand from India.
A more detailed analysis by several thinktanks found that coal-fired electricity fell about 3% in 2019, the biggest drop on record after more than four decades of near-uninterrupted growth in which coal power has been a primary driver of the climate crisis. China’s use of coal plants continued to climb while generation in the US and Europe fell by 16% and nearly a quarter.
Within Australia, black and brown coal provide about two-thirds of the electricity used in the five eastern states, but this is expected to fall as old plants continue to close. According to federal government projections, renewable energy is expected to meet nearly 50% of national demand by 2030.