More coal-fired power plants shut down last year then were approved for construction as capital investment plunged 75 percent in just three years.
Coal Plants Shutting Down at Record Pace
More coal-fired power plants shut down in 2018 than were approved for construction, possibly marking the first time since the start of the Industrial Revolution in the 19th century that such a dramatic reversal has occurred.
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Coal has been one of the essential industrial resources for the past 200 years, powering the first steam engines, ocean liners, and electric power plants, but no fossil fuel has been more responsible for the current climate crisis than coal. Responsible for a little bit less than 40% of electricity generation worldwide, the more than 200 years of coal burning has radically altered our environment, driven countless species to extinction through habitat disruption, and currently threatens to melt the ice caps that stand between us and sea level rise of tens of feet by the end of the century.
It is also undergoing one of the most dramatic retreats for a fuel resource in history according to a new International Energy Agency (IEA) investment report released this week. The intergovernmental agency, based in Paris, reported that companies around the world were reconsidering their planned investment in coal-powered energy generation in favor of alternative energy sources.
The Final Investment Decisions (FID) of investors worldwide reflected a 75% drop in commitment to investing in new coal plants over the last three years, capital investments that were directed to other energy resources like natural gas and renewables instead. In 2015, FIDs approved the construction on 88 gigawatts of coal-fired power plants, while last year this number fell to just 22 gigawatts.
What's more, the total gigawatts of coal-fired power plants that were decommissioned last year exceeded the gigawatts brought online through new coal plants, leading to a net decline of 30 gigawatts produced. Ever since the industrial revolution began, through expansions and recessions alike, the global consumption of gigawatts from coal-fired plants has only ever grown, year after year.
If the report is any indication, the trend of investment away from new coal-fired plants has been both rapid and substantial. While there will still be coal-fired plants for decades to come, the industry appears to be entering a terminal phase and soon all new investment will likely stop as the gigawatts generated by renewables and natural gas continue to fall in price relative to coal.
These resources are already at parity or even somewhat cheaper than coal as it is and while natural gas and especially renewables have an open road for further cost-reducing innovation, coal itself has become an exhausted commodity bereft of new ideas other than carbon capture, which can keep the dirty, inefficient coal-fired plants running for a little while longer at best, but even this technology is starting to make less and less economic sense.
Coal has had a good run over the last two centuries as the fuel that powered the incredible advances of the nineteenth and twentieth centuries, but it has come at an enormous deferred cost in the form of climate change which is soon to come due. If we are to have any chance of averting the worst effects of climate change going forward, the most important step we can take is to stop digging the hole we're already in, which makes the IEA report some genuinely positive climate news for a change.