Solar PV panels in China's Fujian province. Credit: AP |
Martina Linnenluecke
Professor Martina Linnenluecke is Macquarie Business School’s head of the Centre for Corporate Sustainability and Environmental Finance. |
The fact is, Australia might only have a decade left to wean itself off coal if the latest international efforts to decarbonise are anything to go by.
The
demand for coal from some of Australia’s main thermal coal export
markets, specifically China and Japan, is in decline. Both major
economies are rapidly transitioning to clean technology.
The
International Renewable Energy Agency (IRENA) reports that China is
taking the lead in the clean energy race to become the world’s largest
producer, exporter and installer of solar panels, wind turbines,
batteries and electric vehicles.Despite forecasts that China will continue to consume about half the world’s coal until 2023, the country has spent more on renewable energy than any other country and led a campaign to burn gas instead of coal in its battle against pollution. It has already promised to launch a series of solar and wind projects that can provide electricity at the same price as coal-fired power.
China’s investment from January to March this year in thermal power plants, which mostly consist of coal-fired generators, slumped 30 per cent from a year earlier. In contrast, spending on hydro-power and wind-power projects rose 48 per cent and 30 per cent respectively. Most of the capital expenditure planned by coal-fired power companies will be in renewable energy.
A push to a cleaner economy is also visible in Japan.
With
a traditional high reliance on coal-powered generation, Japan is
shifting away from new coal-fired projects. Several large utility
companies, Osaka Gas, Kyushu Electric Power, Tokyo Gas, Idelmitsu Kosa
and Chugoku Electric Power, are scrapping their plans for coal-fired
power.
These
cancellations come as renewable energy is on the rise in Japan and as
the government brings in stricter regulations on new coal-fired power
plants as part of its energy outlook. Coal power generation is expected
to fall to 281 billion kilowatt hours in the 2030 financial year, down
from 346 billion kWh in 2017.
Mitsubishi UFJ Financial Group, one of Japan’s largest banks, is reviewing its lending policies for coal-fired power generation. It is said to be guided by OECD standards to lend only to “high-efficiency, ultra-supercritical” coal-fired power plants.
Mitsubishi UFJ Financial Group, one of Japan’s largest banks, is reviewing its lending policies for coal-fired power generation. It is said to be guided by OECD standards to lend only to “high-efficiency, ultra-supercritical” coal-fired power plants.
As
one of Japan’s biggest suppliers of thermal coal, this fall in demand
will significantly hit Australia’s coal export market in the long-term.
There
is certainly a reason to continue to rely on coal in the short term to
ensure the reliability of power supplies. Given China’s enormous power
needs, it is allowing 11 provinces and regions to resume building coal
power plants. And the closure date of AGL’s Liddell power plant in NSW’s
Hunter Valley has been pushed back by four months.
However,
a Macquarie Business School research paper, “How markets will drive the
transition to a low-carbon economy”, shows that the long-term business
case for new coal projects no longer exists, domestically or globally.
Our research shows the total global wealth creation by 2050 through the development of clean technology patents in areas such as bio-fuels, fuel cells, hydro energy, wind energy, solar energy, and geothermal energy is $13.69 trillion to $20.87 trillion.
Our research shows the total global wealth creation by 2050 through the development of clean technology patents in areas such as bio-fuels, fuel cells, hydro energy, wind energy, solar energy, and geothermal energy is $13.69 trillion to $20.87 trillion.
China
has a clear lead in terms of the underlying technology with over
150,000 renewable energy patents as of 2016. This amounts to 29 per cent
of the global total. The next closest country is the US, which has a
little over 100,000 patents. Japan and the EU have closer to 75,000
patents each.
While not all patents are useful or valuable, these
figures give an indication of how much investment different countries
have been putting into clean technology.
The
point to realise is that the global transition to renewables means our
investments in coal are likely to become “stranded” and eventually these
will need to be written down.
But such transitioning takes time, leadership and policy.
Links
But such transitioning takes time, leadership and policy.
Germany’s
transition to a low-carbon economy with its “Energiewende” has taken 30
years. It will decommission all its coal plants by 2038. Beijing has
stated its intention to clean up its polluted cities, so it will
increasingly turn to cleantech for its power supply to improve air
quality.
Countries such as China ad Japan – our significant coal customers – see the future, and it’s not coal.Links
- Pacific leaders haggle over the future of coal as China looms large
- Alan Jones tells Scott Morrison to 'shove a sock down throat' of Jacinda Ardern
- 'I'm accountable to the Australian people': Scott Morrison pushes back against Pacific leaders
- Call for Australia's Pacific membership to be suspended over coal
- India, World's No. 2 Coal Buyer, Plans to Cut Imports by a Third
- Australia has lost Pacific's trust on climate change
- Australian Insurance Companies Abandon Thermal Coal Industry
- Lower House Inquiry To Set 'Responsible Road Map' Out Of Coal For NSW
- How Germany Closed Its Coal Industry Without Sacking A Single Miner
- Australia Leads The G20 Nations' Pack In Aid For Coal-Fired Power
- 'No Faith In Coal': Religious Leaders Urge Scott Morrison To Take Climate Action
- Adani Mine Approval Shows Climate Change Debate Reaches New Level Of Lunacy
- Norway's $US1 Trillion Sovereign Wealth Fund To Dump Billions In Coal Investments
- Scientists Warn Ancient Desert Springs May Dry Up Under Adani Plan
- Al Gore Slams Adani, Tells Queensland 'Good Luck' In Selling Coal To India
- Explaining Adani: Why Would A Billionaire Persist With A Mine That Will Probably Lose Money?
- Australia Plans Coalfield The Size Of Britain In Climate Change U-Turn
No comments :
Post a Comment