New research from the London-based think tank Carbon Tracker shows that nearly half of the world’s coal plants will operate at a loss this year. The information analyzed the profitability of 95% of the world’s coal plants in operation and planned projects.
In 2019, 41% of all existing coal plants operating costs were greater than revenues received, and in 2020 that number is expected to rise to 46%. This cash flow negative is happening despite coal prices dropping 8% year-over-year.
“We estimate only 28% (141 GW) of the pipeline of coal power will enter the market cashflow negative, despite previous analysis showing new investments in renewables are already cheaper than new investments coal in all major markets. This is mainly due to regulatory and policy structures that favor coal power.”
China and the EU are the two regions driving regional changes in operating cash flows. Defining factors of coal power cashflows include fuel costs, power prices, and environmental regulations such as pollution regulation and carbon prices. Read more…