TAIPEI (Taiwan News) – Latest Carbon Tracker report reveals a future in which investment in coal-fired power plants is deemed economically and environmentally unsustainable, and five Asian countries are on the verge of severe economic losses with their plans to hang on to dirty energy.

The COVID-19 pandemic and cheaper renewables may have contributed to a 4% drop in coal-fired power generation in 2020, but energy-related carbon emissions are expected to rebound this year, mostly due to coal consumption in Asia, according to the report. .

Carbon Tracker, a financial think tank specializing in analyzing the impact of energy transitions, has predicted that the universal goal of countering rising temperatures by reducing coal production depends almost entirely on developments in China, India. and in ASEAN countries, which account for about 75 percent of global coal capacity and 80 percent of new coal-related projects.

To provide a clear perspective on the risk of investing in coal power, Carbon Tracker includes operating profits, debt financing obligations, and tax expenditures while evaluating more than 600 projects over 30 gigawatts ( GW) in five Asian countries – China, Vietnam, Indonesia, Japan, India. Projects are assessed under the status quo scenario (BAU) as well as the beyond two-degree scenario (B2DS), in which constraints exist when operating coal assets.

The research found that 92 percent of the projects would have a net present value (NPV) and that the new projects risk generating a destruction of value of around US $ 150 billion under the BAU. As in unregulated markets where market forces will cause the shutdown of unprofitable power plants, 100% of coal projects in Japan and Vietnam, 89% in Indonesia and 93% in India are likely to create an even higher negative NPV in within the framework of B2DS.

Data source: Carbon tracker

At the same time, existing coal-fired power plants are losing economic ground as renewables become increasingly affordable, as the price of solar panels has fallen from $ 106 per watt in 1976 to $ 0.38 in 2019. Based on current pollution regulations and climate policies, 77% of operating coal plants are more expensive than renewables and will reach 98% by 2026 and 99% by 2030, when the renewable capacity will reach 2,100 GW.

The think tank suggested that the public recognize that faced with the cost competitiveness of renewables, investing in coal is very risky and financially unsustainable. On the other hand, governments should put more emphasis in their post-pandemic recovery plans on the establishment of infrastructure so that renewable energies can compete fairly with traditional energies.

As for the tendency of countries to switch from coal to liquefied natural gas, the researchers argued that this would increase electricity prices and not help meet climate goals. The adoption of renewable energies has proven not only to be the cheapest choice, but also the most environmentally and commercially friendly.