About 54% of coal-fired power plants in the European Union (EU) are already running at loss and this could increase to about 97% by 2030 if European governments do not take required action, according to a new report by climate think-tank Carbon Tracker.
Based on analysis of 619 coal units in the 28 EU countries, the Carbon Tracker estimates that the EU utilities can stem €22bn ($26bn) losses if coal is completely phased-out by 2030.
Carbon Tracker said: “It compared coal owners’ business as usual plans and member state phase-out policies with the International Energy Agency’s Beyond 2°C Scenario (IEA B2DS), which phases out all coal power in the EU by 2030 and gives a 50% chance of limiting global warming to 1.75°C.”
In the report, Carbon Tracker also warned the investors that utilities currently plan to close only 27% of capacity by the end of next decade.
However, the new report suggests that developing new onshore wind by 2024 and solar PV projects by 2027 could to be cheaper than operating existing coal-fired power coal plants.
Carbon Tracker analyst and the report co-author Matt Gray said: “The changing economics of renewables, as well as air pollution policy and rising carbon prices, has put EU coal power in a death spiral.
“Utilities can’t do much to stop this other than drop coal or lobby governments and hope they will bail them out.”
A home to the largest number of unprofitable coal plants, Germany could avoid €12bn in losses by early closure of those plants, the report said.
Similarly, Poland Czech Republic, Spain and the UK could save €2.7bn, €2.2bn, €1.8bn, and €1.7bn respectively, the study finds.
Carbon Tracker data scientist Laurence Watson said: “Our asset-level model outlines a phase-out of coal-fired power consistent with the Paris Agreement.”
The European Commission has already proposed a plan to ban coal from receiving capacity market payments by 2025.
Image: EU utilities can stem €22bn of losses if coal is completely phased-out by 2030. Photo: courtesy of John Kasawa/FreeDigitalPhotos.net.