The economic case for a coal phase-out is stronger than ever

According to several reports, coal power is losing its economic ground, and a lot of infrastructures may one day actually become stranded assesst totgether with recent, ongoing, and planned oil invest in pipelines, harbor faciliteis and refinereies etc.

As detailed analysis by Carbon Tracker analysis, 60% of the global coal capacity is uneconomic on a long-run marginal cost basis. Theis means that in the absence of changing circumstances (i.e., lower costs and/or higher revenues), coal power is, and will continue to be, inherently risky business.

 

Carbon Tracker reports: "The trend is more widespread in liberalized markets, such as those in Western Europe, as wind and solar, with their near-zero marginal costs, drive power prices below the operating cost of coal generation. For example, based on a recent Carbon Tracker report, 79% of operating hard coal and lignite capacity in the EU28 is uneconomic. This dire situation contrasts with coal generators in South Korea, where all operators are cash-flow positive due to market structures that effectively guarantee a rate of return regardless of cost.[ii] Irrespective of whether plants are in liberalized or regulated markets, low-cost wind and solar is a megatrend coursing through regions at varying levels. As detailed in Figure 2, this trend has accelerated in 2019, to the extent where we now believe over 50% of global coal capacity has a higher marginal cost than the levelised cost of either solar PV, onshore wind, or offshore wind. Even nations such as Japan, which is known to have limited renewable resources due to topographical and land-use constraints, low-cost wind and solar could soon eclipse the economics of incumbent coal as early as 2024."

 Source: Carbon Tracker analysis (2019)

Source: Carbon Tracker (LINK)

Spanish oil company Repsol has announced to become a net-zero emissions company by 2050

Carbon Tracker reports that Repsol has announced to become a net-zero emissions company by 2050. This is a step forward from their previous long-term ambition, which was to lower carbon intensity by 40% by 2040.

"This ambition entails directing all of its activities and investments to meet new and more stringent plans all in alignment with the energy transition and the effort to limit the planet’s temperature rise to well below 2 degrees Celsius according to the Paris Agreement’s climate goals."

Now Repsol is one of a handful of oil companies that have set ambitions to lower the lifecycle carbon emissions intensity of their products, alongside Total and Shell.

Repsol is increasing by 3,000 MW its target for low-carbon electricity generation capacity, to 7,500 MW by 2025, and will begin to expand into other markets to become a leading international player in renewable energies such as photovoltaic and wind power.

Source: Carbon Tracker (LINK), Repsol (LINK)