Study: Nearly half of the world’s coal-fired power plants will be at a loss

Nearly half of the world’s coal-fired power plants will be losing money this year, according to a study published Wednesday. Carbon Tracker, a London-based environmental think-tank, came to this conclusion after analysing the profitability of 95 per cent of coal-fired power plants in operation or planning around the world.

Study: Nearly half of the world's coal-fired power plants will be at a loss

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It is understood that the agency based on estimated revenue from wholesale electricity markets, ancillary and balancing services, capital markets, operating costs, carbon pricing and pollution policies, 6,696 operating plants and 1,046 plants under construction, and found that 46% of the plants will be unprofitable this year, up from 41% in 2019.

The think-tank points out that as renewable sand and cheaper natural gas begin to outpace coal, the proportion will rise to 52 per cent by 2030.

The report says governments and investors who build new coal may never be able to recoup their investment because coal-fired power plants typically take 15 to 20 years to recover costs.

By 2030, according to the United Nations, the world’s coal use for power generation will have to be 80 per cent lower than it was in 2010 to curb global warming.

As tighter emission stake targets hamper the use of fossil fuels and the falling cost of renewable energy, a growing number of institutional investors are pulling out of fossil fuel companies to keep their assets from getting bogged down.