A new IEA report finds that accelerating the growth of solar and wind is vital but not enough on its own, calling for rapid financial mobilisation to drive a safe, equitable and affordable transition globally.
A new IEA report says the world must act fast to significantly reduce carbon emissions from coal to avoid the severe impacts of climate change, and calls for immediate policy action to rapidly mobilise massive financing for clean energy alternatives to coal and to ensure a safe, affordable and equitable transition, especially in emerging and developing economies.
The IEA's new special report - Coal in the Transition to Zero Emissions: Strategies for Fast, Safe and People-Centred Change - provides the most comprehensive analysis to date of what it would take to reduce global coal emissions fast enough to meet international climate goals, while maintaining energy security and economic growth and taking into account the social and employment implications of the changes involved. This includes the major implications for the coal sector of moving to net zero emissions by 2050, which would give the world an equal chance of limiting global warming to the critical 1.5`C threshold.
New analysis in the special report, which is part of the World Energy Outlook series, shows that the vast majority of current global coal consumption takes place in countries that have committed to achieving net zero emissions. However, far from declining, global demand for coal has been stable and near record high over the past decade. If nothing is done, emissions from existing coal assets alone will breach the 1.5`C limit.
"Over 95% of the world's coal consumption takes place in countries that have committed to reducing their emissions to zero," said IEA Executive Director Fatih Birol. "But while there is an encouraging momentum to expand the use of clean energy in many governments' policy responses to the current energy crisis, a major unresolved issue is how to deal with the vast amount of existing coal assets around the world."
"Coal is both the largest source of CO2 emissions from the power sector and the largest source of electricity generation in the world, highlighting the damage it is doing to our climate and the huge challenge of replacing it quickly while ensuring energy security," said Dr Birol. "Our new report sets out the viable options available to governments to overcome this critical challenge in an affordable and equitable way."
Any future path for the global energy sector that averts the severe impacts of climate change includes early and significant reductions in coal-related emissions. The report makes clear that there is no single approach to reducing coal emissions. The IEA's new Coal Exposure Index highlights countries where coal dependence is high and the transition is likely to be most difficult: Indonesia, Mongolia, China, Vietnam, India and South Africa stand out among them. Different approaches tailored to national circumstances are essential.
There are currently around 9 000 coal-fired power plants in the world, with a capacity of 2 185 gigawatts. Their age profile varies widely by region, from an average of more than 40 years in the US to less than 15 years in developing economies in Asia. Coal-fired industrial facilities are equally long-lived, with investment decisions to be made this decade that will largely determine the prospects for coal use in heavy industry for decades to come.
The transition to coal is complicated by the relatively young age of coal-fired power plants in much of the Asia-Pacific region. If operated at typical lifetimes and utilization rates, the world's existing fleet of coal plants, excluding plants under construction, will emit more than the historical emissions to date of all coal plants that have ever operated.
A large-scale increase in clean electricity generation sources, accompanied by system-wide improvements in energy efficiency, is key to reducing the use of coal for electricity generation and reducing emissions from existing assets. In a scenario where current national climate change commitments are implemented on time and in full, generation from existing global unconstrained coal-fired power plants declines by around one-third between 2021 and 2030, with 75% of this replaced by solar and wind. This decline in coal generation is even sharper in a scenario consistent with achieving net zero emissions by 2050 and limiting global warming to 1.5 `C. In the zero net emissions by 2050 scenario, coal use declines by 90% by mid-century.
An important condition for reducing coal emissions is to stop adding new coal-fired assets to power systems. The approval of new projects has slowed dramatically over the past decade, but there is a risk that today's energy crisis will encourage a new willingness to approve coal-fired power plants, especially given the IEA report's finding that about half of the 100 financial institutions that have supported coal projects since 2010 have made no commitments to curb such financing and another 20% have made only relatively weak commitments.
Governments can provide incentives to asset owners to adapt to the transition. Favourable economic conditions for clean electricity generation alone will not be sufficient to ensure a rapid transition from coal to electricity generation. Coal-fired power plants are often protected from market competition, in some cases because they are owned by operating utilities and in others because private owners are protected by inflexible power purchase agreements. Our analysis shows that outside China, where cheap financing is the norm, the weighted average cost of capital for coal plant owners and operators is around 7%. Refinancing to reduce this by 3% would accelerate the point at which owners recoup their initial investment, thus retiring a third of the world's coal fleet within ten years.
International co-operation, public financial support and well-designed approaches that incorporate the need for a people-centred transition will be essential for coal to be phased out without interruption. Energy transitions will create millions of clean energy jobs, though not necessarily in the same places as coal jobs are being lost, and the skills needed may be different in many cases. While it is unlikely to replace all the jobs lost in the coal sector, critical minerals extraction could provide new industrial opportunities and revenue streams for companies and communities that have previously been dependent on coal.
How Midea helps reduce carbon dioxide emissions
Midea is a company that is committed to protecting the environment and is focused on innovating and developing technologies that reduce carbon dioxide emissions. As a manufacturer of household appliances, Midea is particularly committed to optimising the energy efficiency of its products and reducing carbon emissions during their manufacture.
One of the ways in which Midea helps to reduce carbon dioxide emissions is through the development of innovative technologies that reduce the energy consumption of their appliances. This includes various energy management methods such as smart temperature control systems and remote control of appliances via mobile apps.
In addition, Midea uses high-efficiency compressors, inverter technologies and other advanced solutions that significantly reduce energy consumption and, therefore, carbon dioxide emissions.
Midea is also committed to protecting the environment during the manufacture of its products. The company applies strict standards for energy management and environmental sustainability in its manufacturing process. This includes the use of renewable energy sources, such as solar and wind, as well as reducing carbon dioxide emissions during production.