Global initiatives take aim at ending the use of coal, financing to be trimmed by 99 percent
Energize Weekly, November 10, 2021
Global momentum to end of the use of coal-fired generation is growing as more than 40 countries last week pledged to end the use of coal, and key financial backing for plants has all but dried up.
Meanwhile, from Indonesia to Heard County, Ga., moves to shut existing coal-fired plants continue.
At the United Nations climate summit in Glasgow, Scotland, on Nov. 3, 90 nations signed a clean-power commitment, sponsored by the United Kingdom, with more than 40 countries promising to phase out coal.
Among the countries are big coal consumers and coal plant developers, such as Poland, Vietnam, Indonesia and South Korea.
“Ambitious commitments made by our international partners demonstrate that the end of coal is in sight,” Kwasi Kwarteng, the U.K. business and energy secretary, said in a statement. “The world is moving in the right direction, standing ready to seal coal’s fate.”
Coal is the single largest contributor to the buildup of climate-changing greenhouse gases in the atmosphere, accounting for 46 percent of carbon dioxide emissions worldwide.
The initiative was tempered by the fact that the world’s three largest coal consumers – China, India and the U.S. – are not signatories.
Environmental groups criticized the pledge as vague for not setting specific deadlines for ending the use of coal.
“This is one more nail in the coffin of coal, but only one, and the coffin is not yet sealed,” Jennifer Morgan, executive director of Greenpeace International, told The New York Times.
The winding down of financing for new coal-fired plants looks to be firmer as the countries in the Group of 20 (G20), representing the world’s largest economies, pledged to end bankrolling for the units.
That followed an announcement in September by China’s leader Xi Jinping that the country would not build new coal-fired plants abroad.
China is the major funder of foreign coal-fired plants, financing 42 gigawatts (GW) in 2020, followed by Japan with 2.2 GW of projects and the Czech Republic with 1.2 GW.
Bangladesh, Vietnam, Mongolia and Indonesia were the biggest recipients of financing and projects, according to the Global Energy Monitor.
The China and G20 announcements mean that 99 percent of internationally available funding from development finance institutions, such as export-import banks, is committed to reducing or ending coal finance support and increasing backing for renewable energy projects, according to a Boston University analysis.
The three financial institutions remaining that do not have commitments to end coal financing are the Development Bank of Latin America, the Islamic Development Bank and the New Development Bank.
“The landscape of development finance has shifted dramatically in favor of developing countries with green energy transition goals,” the analysis by Boston University’s Global Development Policy Center said.
In the last six years, since the signing of the Paris climate agreement, the number of announced coal plants has been cut back 76 percent – cancelling about 1,000 GW of capacity.
The Asian Development Bank has also initiated a plan to help Indonesia retire 50 percent of its coal fleet in the next 10 to 15 years, using two multibillion-dollar funds: one to retire or repurpose coal units and the other to develop clean energy.
Masatsugu Asakawa, the Asian Development Bank president, announced the initiative at the U.N. conference in Glasgow.
Meanwhile, in the U.S. the retirement of coal-fired plants continues apace as the Southern Company, the nation’s third largest utility, announced that it will shutter more than half of its coal-fired capacity, closing 5.5 GW of units.
This includes the 1.8-GW Wansley Plant, in Heard County, Ga., and the 1-GW Plant Daniel in Moss Point, Miss.