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Nearly half of global coal plants will be unprofitable this year
- tick_tock_tick 7y agoIf this comes true which is a BIG if since the calculations include "carbon pricing and pollution policies" which are not happening anytime soon in China. It will be almost completely due to the cheap price of natural gas not renewables as the article implies.
- brianwawok 7y agoEvery coal plant closed is a coal plant closed. Don't let perfect be the enemy of good. China can make no changes and we can still make the world a better place. Start with your neighborhood first.
- tick_tock_tick 7y agoI didn't say anything about good/bad just that the article is implying something very different than reality.
- ced 7y agoI'm just googling, but FWIW, from 2017: The China Carbon Market Just Launched, And It's The World's Largest. Here's How It Can Succeed. https://www.forbes.com/sites/energyinnovation/2017/12/19/the-china-carbon-market-just-launched-and-its-the-worlds-largest-heres-how-it-can-succeed/#639ea3ff7ce6 https://www.forbes.com/sites/energyinnovation/2017/12/19/the... At a cursory glance, it seems like it's still ongoing, at a price of 8$/ton: https://www.icf.com/insights/public-policy/china-carbon-price https://www.icf.com/insights/public-policy/china-carbon-pric...
- Reason077 7y agoUnlike the USA, China does not have huge resources of natural gas. For the most part, natural gas will not replace coal in China. China does have a lot of renewables[1] - enormous solar and wind farms in the interior and west, and the potential for far more. These can produce energy much cheaper than coal plants can. But the challenge is getting that energy to the more populous provinces in the south and east where it’s needed. Transmission infrastructure is expensive, even in China. [1] Renewables supplied 27% of China’s electricity in 2017, compared to only 4% for natural gas.
- adventured 7y ago> Unlike the USA, China does not have a lot of natural gas. China doesn't need a lot of natural gas within its borders. It's neighbors with Russia, which can supply via pipeline all the natural gas that China can take. The issue is it remains cheaper to do coal domestically in China than to buy natural gas from Russia, so they overwhelmingly prefer to do that still. It's also of course expedient for China to use coal, whereas pipelines and energy deals can take a decade. Their 2014 deal was a $400 billion arrangement involving an 8,000 km pipeline. China has greater access to natural gas thanks to bordering Russia, than nearly all of the world's largest natural gas producers have access to natural gas in their own backyards.
- Reason077 7y agoPerhaps, but it’s hard to see China ever wanting to become too dependent on imported natural gas. They like coal not only because it’s cheap (which, increasingly, it isn’t), but because it’s domestic.
- macintux 7y agoThe virus might change that calculation to some degree, now that we know it can be transmitted via air pollution.
- deleted 7y ago[deleted]
- badpun 7y agoDo we?
- macintux 7y ago“Know” is perhaps strong, but there are studies pointing that way. https://www.nejm.org/doi/full/10.1056/NEJMc2004973 https://www.nejm.org/doi/full/10.1056/NEJMc2004973 https://www.medrxiv.org/content/10.1101/2020.03.09.20033217v2 https://www.medrxiv.org/content/10.1101/2020.03.09.20033217v... https://www.rtbf.be/info/societe/detail_le-coronavirus-pourrait-rester-plusieurs-heures-dans-l-air-a-cause-de-la-pollution-atmospherique?id=10464049 https://www.rtbf.be/info/societe/detail_le-coronavirus-pourr...
- danielharan 7y agoSolar's gone down in price 80% in a decade, and is still continuing that downward trend. Wind, both on and offshore, is also getting cheaper. By 2030, new solar will certainly be cheaper in China than it is to operate existing coal plants. I'm a lot more comfortable betting that mass-manufactured things get cheaper, than I am on the price of natural gas a few years or a decade out. With solar and wind going down another 50% and battery prices under $100/kWh, the economics are pretty powerful. The politics are just as powerful; China has massive internal pressure to clean up the air (and people have been reminded of how clean it could be), and a chance at replacing the US for world leadership if it can show the way forward on climate.
- stevespang 7y agoBut at such low prices unfortunately OIL and natural gas will be burning even more in Chinese factories and other uncaring nations who place profits over health everyday.
- roenxi 7y agoIf this does happen it would represent a win for everyone, but a substantial intellectual victory for the people who delayed action against climate change in the '00s and '10s. If we're all going to switch to renewables in the '20s for economic reasons then it would have been madness to force their adoption 10 years earlier to deal with a threat that materialises in 2050+.
- vkou 7y ago> then it would have been madness to force their adoption 10 years earlier to deal with a threat that materialises in 2050+. Unless the economic cost of switching in the 2000s would have been substantially lower than the extra damage of 20 years of pollution will inflict in the 2050s. In the past 20 years, we've added 50 PPM of CO2 to the atmosphere. That's one third of all CO2 emissions that humanity has produced in its history.
- cultus 7y agoYou have this completely and utterly backwards. Please understand these issues better before spreading this kind of misinformation. Delaying carbon mitigation has only meant that necessary measures are much more severe than they would have been. Not only that, but we are way past the point of being able to prevent many horrible effects of climate change. Fast action now will only stave of even worse things. If you haven't noticed, climate change is already here, and it hurts.
- _bxg1 7y agoa) The economic snowball we're finally starting to see for renewables is largely driven by governments finally being forced by the undeniable reality to take real regulation steps. b) The economic cost of waiting 10 years to address an exponential process is going to far outweigh the cost there would've been to give an extra "oomph" to action, I'm sure.
- roenxi 7y ago> largely driven by governments ... tak[ing] real regulation steps Which ones? I'm only aware of serious efforts in Germany and they basically torpedoed their own electricity use (their per-capita trends aren't good). There aren't that many governments who could stomach doing that to their people.
- csomar 7y ago> It looked at 6,696 operational plants and 1,046 in the pipeline and found that 46% will be unprofitable this year, up from 41% in 2019 I thought this is due to Covid-19 but apparently it's a chronic trend. > That will rise to 52% by 2030 as renewables and cheaper gas outcompete coal, the think tank said. A very slow one too.
- ogre_codes 7y agoIt's a Chronic Strain on the coal industry. The coal industry is going up in smoke. Profit estimates are in the weeds as green energy is at an all time high. Sorry... couldn't resist.
- greglindahl 7y agoA lot of coal plants in developed countries are closing. The least efficient ones are most likely to close. That should tend to make the % unprofitable fall, but it's rising instead.
- colechristensen 7y agoElectricity production (in the building power plants sense) isn't very elastic. Profitability wouldn't be the only, or likely the primary consideration for what to close and when. The market for electricity isn't very "efficient" in that way, a utility or market doesn't buy and sell from an individual power plant so the price/profitability of a single plant doesn't reflect the supply/demand from that plant.
- TheSpiceIsLife 7y agoYeah, you’d think if 41% were unprofitable this year then next year there’d only be 4000 odd coal-fired plants, and so on and so forth. So obviously profitability isn’t the only thing keeping these plants open or not. Additionally: but this risks locking in high-cost coal power Coal is only high-cost when compared against certain metrics that favour non-coal electricity sources. On the whole electricity is extremely cheap, even from fossil sources, and where the end user may pay enough to care about total usage, the major components of the retail price are not source related, but rather delivery / tax / administrative / bureaucratic.
- toohotatopic 7y agoWhy should energy costs fall below their current levels? There are billions of people who only consume a fraction of the energy that citizens of industrialized countries consume. If anything, energy prices will rise and coal will remain profitable. Energy will be needed to build all those roads and cars. And then there is the scarcity of sand. How can sand for concrete be artificially created but with more energy?
- woodandsteel 7y agoThey are talking about energy cost per watt hour, not the total expenditure for energy.
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- ineedasername 7y agoIf increased supply outpaces increased demand then energy costs will fall.
- toohotatopic 7y agoIndeed. My point is that we are far away from outpacing demand.
- pfdietz 7y agoYou might as well ask why should computer prices fall. Energy costs fall because of advances in technology. Wind and PV have now brought the very rapid cost reductions of the tech sector to the energy sector. PV costs fell by nearly an order of magnitude in the last decade.
- toohotatopic 7y agoComputer prices are only falling when you compare processors with the same speed and monitors with the same resolution. Overall, prices might as well increase if you look at the prices of the last flagship phones or at least remain stable if you look at main memory. It comes down to the [1] Jevons paradox. >In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological progress could not be relied upon to reduce fuel consumption. PV and Wind fell because they were above the market costs of energy. Once they are below, they will stop falling further. Prices will only go further down if energy supply outpaces demand. Why should that ever happen? Have you seen people stop buying SUVs? Once energy gets cheaper, SUVs will become even bigger. Being well-off essentially means being able to waste energy. To signal status, people will burn all available non-essential energy, however much there is to burn. [1] https://en.wikipedia.org/wiki/Jevons_paradox https://en.wikipedia.org/wiki/Jevons_paradox
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- H8crilA 7y agoThat's still so much better than tech companies, even tech companies 6 months ago /s Never forget how absolutely huge coal is. Those Joules are not going to be replaced with renewables any time soon. It's literally impossible because renewables need Joules themselves to be built, not just money. Money does not synthesize power generating objects; materials and energy and machinery and the approval to do so (capital) all together do: https://en.m.wikipedia.org/wiki/World_energy_consumption https://en.m.wikipedia.org/wiki/World_energy_consumption
- ineedasername 7y agoRenewable GW capacity in the US has grown at a 7.8% per year compound annual growth rate. [0] That is more than a linear increase in renewable capacity, indicating that renewable capacity will be increasing faster and faster in absolute GW terms. [0]https://www.nrel.gov/docs/fy19osti/72170.pdf https://www.nrel.gov/docs/fy19osti/72170.pdf
- Androider 7y agoWhen did you last look at the current state of renewables? Even two years ago, the picture was completely different, but renewables are absolutely catching up. The change is fast and accelerating. 17% of energy production in the US is now renewables. 26% in China. 46% in Germany. The economic case for deploying renewables continues to improve, and will soon hit a tipping point where operation of legacy generation systems will be more expensive than deploying and operating newer ones. Even in the US, who will want to be in the coal business then? The companies all know this, and are all pivoting from being coal|gas|x-companies to being energy-companies.
- H8crilA 7y agoThe only thing that matters is world's total usage, because co2 does not respect borders. Could you point me to updated world energy usage data then?
- alialghamdi 7y agoWhat's the source of this information? I want to see how other countries are doing.
- woodandsteel 7y agoFrom what I understand there is an ongoing battle in the Chinese government between those who understand the country desperately needs to get off of fossil fuels as soon as possible, and those who want to stay on coal forever. So at the same time that China has been building an enormous number of coal plants, it is also building renewable power plants and pushing hard on ev's.
- IIAOPSW 7y ago>there is an ongoing battle ... between those who understand the country desperately needs to get off of fossil fuels as soon as possible, and those who want to stay on coal forever. Sounds like a certain other major country.
- eunos 7y agoCoal still employs a huge amount of people. Besides, coal Barrons are very rich and influential as well.
- greglindahl 7y agoSolar is pretty labor-intensive to install, while coal is extremely mechanized.
- woodandsteel 7y agoThe difference is the head of state of China is an engineer and in touch with reality on this matter.
- bobthepanda 7y agoChina's Five Year Plans are very big on numbers. I don't think I've seen one where China has ever reduced a target related to economic expansion. I'm kind of surprised they even need that much more power at this point, since the country is fairly developed, where growth tapers off and energy efficiency starts rising.
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- simonw 7y agoThe World Resources Institute publish a fascinating dataset of global power plants here: https://www.wri.org/publication/global-power-plant-database https://www.wri.org/publication/global-power-plant-database I run a Datasette instance using this data with a map visualization here: https://global-power-plants.datasettes.com/global-power-plants/global-power-plants https://global-power-plants.datasettes.com/global-power-plan... Here's a map of all 2,390 coal plants (click "Load all" to see all of them on the same map) https://global-power-plants.datasettes.com/global-power-plants/global-power-plants?primary_fuel=Coal https://global-power-plants.datasettes.com/global-power-plan...
- jseip 7y agoThank you natural gas!
- jethro_tell 7y agoYeah, I love lighting my water on fire and fracking earthquakes. Switching America's oil subsidies to solar and wind would be much better than pretending that fracking shale is a net plus.
- fred_is_fred 7y agoWhere I live in the US, pretty much none of the oil companies are fracking to get gas, they are fracking to get oil. The gas is effectively a waste product - and honestly if we don't burn it for heat, they will flare it - so at least by using it in our homes and power plants it has some value and also replaces coal.
- mrpopo 7y agoAnd fracking lives solely on government subsidies and will receive even more subsidies after this crisis. Without subsidies, fracking's gone and coal's back up. I fail to see how your comment responds to OP's suggestion of divesting subsidies to support renewables instead.
- newswriter99 7y ago>Yeah, I love lighting my water on fire and fracking earthquakes Natural gas from fracking does not cause burning tap water. https://www.cred.org/is-fracking-connected-to-burning-tap-water/ https://www.cred.org/is-fracking-connected-to-burning-tap-wa... Fracking-related earthquakes are either minimal or bebeficial https://www.americangeosciences.org/critical-issues/faq/does-hydraulic-fracturing-cause-earthquakes https://www.americangeosciences.org/critical-issues/faq/does... 0/10 "green energy" shill. Fracking gave us dirt cheap natgas, which is damn cleaner than coal AND why your electricity prices havent gone up in the last decade. Educate yourself.
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- olliej 7y agotime for yet more subsidies to unprofitable businesses.
- XCSme 7y agoIs this good or bad news? I assume good for the environment, right? Or creating the alternative sources would generate more CO2?
- XCSme 7y agoOh, it's probably bad news for the coal plant owners.
- FreeFull 7y agoBurning coal is generally known for being really bad for air quality. The ash is somewhat radioactive, and if there's any sulphur in the coal it'll cause acid rain. The exhaust from burning the coal nowadays ends up going through treatment to clean it up (remove sulphur and particulates), which is an added expense. In comparison, natural gas tends to be rather pure, so when burned it produces just carbon dioxide and water.
- Ambele 7y agoYes, greenhouse gasses and lung effects aside, the sulphur mixes with carbon dioxide and other airborne oxides to becomes sulpher dioxide. This makes rain water acidic and causes the erosion on the Statue of Liberty.
- mhh__ 7y agoCoal is probably the worst possible way to generate power at scale. People complain about nuclear power being dangerous but the air pollution from a coal power station kills people every single day. (yes)
- IAmEveryone 7y agoNatural gas is second-worst after coal among the major energy sources, releasing about half as much CO2. Leaving coal in the ground is both necessary as well as supremely effective to stave off the next global catastrophe. It also drastically reduces other emissions, some of which have been implicated in the current catastrophe. As a cherry on top, it upsets coal magnates, a self-selected group uniquely qualified to entertain us with their misery.
- gentleman11 7y agoCoal is one of the cheapest energy sources we have (before taking climate damage into account). Is the energy sector in general not very profitable lately?
- jbarciauskas 7y agoIt's an industry with highly inelastic supply and a huge drop in demand.
- drcross 7y agoCan anyone comment on the state of grid scale battery storage? Surely it's the holy grail to eliminate coal. As we approach 100usd per kWh it must be becoming a viable alternative.
- Danieru 7y agoJapan is building new plants. You'll see that news a bunch. What you do not see is the why. Japan has companies which are building new coal plants in order to replace existing plants. Old coal plants have lower efficiency. Old coal plants produce more pollution. A none trivial reason why so many old coal plants are unprofitable is because other newer fossil fuel plants can out compete them. Sure renewables play a part, but the single biggest reason those old plants cannot make money at current energy prices is simple competition. New plants are buying the same coal but getting more electricity per ton while using larger and more automated plants. Meaning more revenue per ton with lower overhead. Coal as a whole will decrease, but along the way new plants need to be built. Yet the media treats all coal plants as a single monolith. "How could a country be building new plants when existing old plants are unprofitable". The media would do well to educate and inform instead.
- bpodgursky 7y agoThe other "why", is that Japan decommissioned a huge percentage of their nuclear power plants after the Fukushima disaster. Renewable (or at least less dirty) solutions would have filled that gap and prevented the need for even replacement coal plants, if that baseline capacity continued to exist, or grown.
- olau 7y agoDo you have a source for that information? Old coal plants will presumably be able to operate on the marginal cost of the coal plus maintenance, where as new plants have a big initial capital spending they need to fund. Now, it is clear that some plants are so old that they're going beyond their planned lifetime and need investments. But that does not seem to be what you are hinting at?
- PopeDotNinja 7y agoI'm not sure if this completely answers your question, but the Illinois EnergyProf channel on YouTube and some interesting content on modern coal power generation: - "How Things Work: A Coal (and Gas) Power Plant" -- https://youtu.be/TDsmJ3aheCk https://youtu.be/TDsmJ3aheCk - "Cleaning Coal (I.e., Dropping Acid)" -- https://youtu.be/dijpXxU1QB0 https://youtu.be/dijpXxU1QB0 - "Burning Coal through the Decades" -- https://youtu.be/vT0cfNGxNeo https://youtu.be/vT0cfNGxNeo
- relativitypro 7y agoEnergy markets are highly subsidized, in China too. To have this discussion, one needs to include information about the entire energy market. If you heavily subsidize low-no carbon footprint sources, you devalue the others. Additionally you need to separate base load sources from load following sources. Load following coal plants might be more prevalent by number (ie 95%) and in direct competition with natural gas. The smaller the total energy output the more competition you have from solar and wind, which are highly subsidized and reduce margins. Reuter’s would do better to give this proper context.
- Proven 7y agoIf this continues, they'll catch up with Tesla and other green frauds.