This week Italy announced that it is aiming to phase out coal by 2025, just 6 years’ time. It joins 12 other countries that have either already phased out coal or intend to phase it out in the years leading up to 2030, including the UK by 2025 and Canada by 2030. That’s alongside 6 major cities that are doing the same, including New York, Beijing, Delhi, Berlin and Washington DC and the state of California.
Globally, the pipeline of coal plants from planning and construction to retirement shrank in the year from January 2016 to January 2017 with India and China leading the way due to pollution and excess generation capacity.
In the US, coal’s decline has been stark. Around 15 years ago coal generated around 55% of US electricity, but by 2016 it was just 33%. Between, 2011 and 2016 the four largest US coal companies lost 99.9% of their market capitalisation.
While globally, coal demand is still set to increase, technological advancements and the falling cost of both renewable energy and energy storage will eat even further into coal’s dominance. According to the International Energy Agency, the cost of building new renewable energy is increasingly the same as or lower than new-build coal or gas plants and renewables are set to grow twice as fast as coal out to 2022.
Coal may still be dominant but the writing is on the wall. According to a study published in Nature, 88% of the world’s coal reserves will have to stay in the ground if we are to have just a 50% chance (the toss of a coin) of capping temperature rise at 2 degrees, the target agreed to as part of the Paris Accord.
As countries face increasing pressure to meet their emissions reduction targets under the accord coal will become increasingly unpopular. Coupled with the increasing appeal of renewables and storage it seems that coal is inevitably heading for the door.
Photo at top: Peter Van den Bossche, Wikimedia Commons