Limiting climate change to 2C means shutting down coal power plants - an unpopular proposition for coal power companies. But a new study shows that delaying climate policies could prove even worse for power plant owners.
Coal power plants are a major source of greenhouse gas emissions, and new plants are planned around the world, particularly in India and China. These new power plants are built to run for 30-50 years, paying off only after years of operation. But stringent climate policies could make the cost of emission so high that coal power generation is no longer competitive, leaving new power plants sitting idle and their owners and investors with huge lossesa problem known as stranded capacity.
"If we are serious about meeting climate targets, then the reality is that eventually we will have to start shutting down coal-fired power plants. But the longer we delay climate action, the more stranded capacity we'll have," says IIASA researcher Nils Johnson, who led the new study, published today in the journal Technological Forecasting and Social Change. "Delaying action encourages utilities to build more coal-fired power plants in the near-term. Then, when policies are finally introduced, we have to phase out coal even more quickly and more investments go to waste," he says.
The new study finds that as much as 37% of global investment in coal power plants over the next 40 years could be stranded if action is delayed, with China and India bearing most of these costs. The study explored strategies to reduce stranded capacity in coal power plants, while limiting future climate change to the internationally agreed 2C target.
It shows that one key is to avoid new coal power plant construction. Potential options include shifting to other kinds of power plants, keeping old coal plants running, and improving energy efficiency. By reducing the amount of energy used, efficiency improvements also reduce the amount of energy that must be
|Contact: Katherine Leitzell|
International Institute for Applied Systems Analysis