Antinuclear

Cancellation of new coal plants at twice the rate of ones being built

For Every New Coal Plant Being Built, Two Are Being Cancelled, Clean Technica,  March 21st, 2015 Originally published on The Carbon Brief. By Sophie Yeo

The global coal boom has started to slow, a new  report says, as more plans for new power plants are now being shelved than completed.

The number of cancelled coal projects across the world has outstripped those completed at a rate of two to one since 2010, according to Sierra Club and CoalSwarm – two campaign groups that have tracked the progress of 3,900 intended plants since 1 January 2010.

The findings update a 2012 report by the World Resources Institute, which estimated that 1,199 new coal-fired power plants, with a total capacity of 1,401 gigawatts, were in the pipeline for construction.

New figures suggest that, by 2014, this had shrunk by 23% to a proposed 1,083 gigawatts of new coal-fired capacity. The report puts this down to citizen opposition, competition from renewables, new policy initiatives and political scandals putting a freeze on the highly polluting projects………

Stranded assets

The current rate of coal project cancellations is already causing a headache for investors in the industry, Ted Nace, one of the report’s authors, tells Carbon Brief:

“The clearest example right now is in coal mining stocks like Peabody, Arch, and Alpha Natural Resources. Arch’s stock, for example, hit $75 per share in 2008 and now sells for 88 cents per share. An individual or an institutional investor that invested $75,000 in Arch stock in 2008 would have lost over $74,000 in the past seven years.”

The decline in the European and US coal fired capacity growth has been taking place for over a decade, but mining companies had hoped that exports to China and other Pacific Rim nations would help to make up the difference.

This has not happened. China’s coal consumption  fell by 2.9% in 2014, while the use of existing coal plants dropped to 54% – a 35-year low.

Meanwhile, new renewable energy capacity exceeded new coal capacity in China for the first time in 2013, and then again in 2014 – although coal  remains the dominant source of Chinese electricity.

The rate at which projects are being shelved in India has also had an impact on connected projects overseas, explains Nace:

“With capacity growth stalling in India, numerous overseas mega-projects such as mines, railroads, and terminals designed to increase imports of coal to India are now on turning into white elephants.”……..

The rate at which coal plants are being cancelled is an improvement upon previous estimates on the future growth of the industry.

But with international efforts targeted towards keeping global warming to below two degrees, the news that there is still 1,083 gigawatts of coal capacity in the pipeline is little cause for celebration. http://cleantechnica.com/2015/03/21/for-every-new-coal-plant-being-built-two-are-being-cancelled/

April 3, 2015 - Posted by Christina Macpherson | Uncategorized