According to the International Energy Agency (IEA), coal power plants produce a fifth of global greenhouse gas emissions, more than any other single source. Reducing the use of this fossil fuel is one of the most contentious issues in global climate change negotiations. The growing power station pipelines in China and India have, for long, been seen as the biggest hurdles in phasing out coal use.
The latest report of the US-based think-tank, Global Energy Monitoring, shows a rise in the number of thermal power plants in the two countries. China alone accounted for two-thirds of the world’s newly operating coal plants last year. The country augmented its coal power capacity at a rate not seen in the past nine years, despite promises “to contain” the use of fossil fuel.
Also worrying is the slowing rate of coal power plant decommissioning in the US. At 9.7 GW, the country contributed nearly half of the capacity retired in 2023, but this was a drop from the 14.7 GW decommissioned last year. All this means that the coal-fired power capacity grew 2 per cent last year, the highest annual increase since 2016. This does not augur well for meeting the Paris Climate Pact’s target of limiting the rise in global temperatures to less than 1.5 degree Celsius.
To meet the goal of phasing out current coal capacity by 2040, the world must retire an average of 126GW of coal power plants every year for the next 17 years. Barely a sixth of that capacity was retired last year. China has committed to retiring 30 GW by 2025. But last year, it decommissioned only 4 GW. The US, too, has much work to do. The country plans to retire 5 GW this year, the lowest since 2008. However, experts believe that competitive natural gas prices and expanding renewable generation capacity will lead to an appreciable reduction in coal installations in the next two years. The US Energy Information Administration estimates a 10 per cent reduction in coal use by 2025.
There cannot be a one-size-fits-all approach to the green transition. Emerging and developing economies are faced with the task of lifting large sections of their population out of poverty. Some of them, like India, have made appreciable strides in installing renewable energy. However, the growth of green energy hasn’t kept pace with the rise in demand for electricity. In several of these countries, the coal sector is a big employer. The IEA has advocated fitting power plants “with systems that can capture carbon emissions before they are released into the atmosphere”.
The use of this technology has been debated for more than a decade. However, it’s a costly proposition. Developmental finance institutions — national and global — have to work with key players to mitigate the social and environmental impacts of coal energy. The UNFCCC processes haven’t given adequate importance to roping in these institutions to address one of the most vexed issues related to climate change. With global temperatures surging to record levels last year, this task cannot be postponed for long.