Electricity from renewable energy sources will outcompete coal facilities in the Philippines by 2021 as the shift away from “dirty” energy moves forward, according to Carbon Tracker Initiative.
The London-based think tank said in a new report two-fifths (42 percent) of the world’s coal power stations were already running at a loss.
Carbon Tracker said this finding questioned the need for new coal generation, and showed that it made economic sense to close coal plants in line with the Paris Climate Agreement.
The think tank analyzed the profitability of 6,685 coal plants worldwide, representing 95 percent, or 1,900 gigawatts of all operating capacity and 90 percent, or 220 GW of new capacity being built.
“It costs more to run 35 percent of coal power plants than to build new renewable generation,” the group said.
“By 2030, building new renewables will be cheaper than continuing to operate 96 percent of today’s existing and planned coal plants,” it added.
Carbon Tracker said that, in the Philippines, there were 11 GW (or 11,000 megawatts) of coal plants—both operating and under construction.
While there are currently no coal plant in the Philippines that is running at higher cost compared to renewables, about half of coal plants will lose out in competitiveness by 2030.
According to Carbon Tracker, governments should phase out coal in an orderly manner and develop plans to close the least economic plants first.
When it is cheaper to build new renewables and gas than to build new coal power, they should ban investments in new coal power, the group said.
“Our analysis shows a least-cost power system without coal should be seen as an economic inevitability rather than a clean and green nicety,” said Sebastian Ljungwaldh, Carbon Tracker energy analyst. —RONNEL W. DOMINGO