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Powering down coal: navigating the economic and financial risk in the last years of coal power


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COP24 event

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Powering down coal: navigating the economic and financial risk in the last years of coal power

  1. 1. Matt Gray Head of Power & Utilities Carbon Tracker Initiative Powering down coal Navigating the economic and financial risks in the last years of coal power COP24 December 13, 2018
  2. 2. 2 Who are we? Carbon Tracker is an independent non-profit financial think tank funded by EU and US foundations interested in climate. Mapping the transition for the fossil fuel industry to stay within a two-degree budget. To enable a climate secure global energy market by aligning the capital markets with climate reality. Strategy Research that unpicks the implications of the energy transition for fossil fuel supply and demand Engage to deepen the dialogue with investors to enable transparency on implications of transition Communication to amplify research findings and influence the debate in mainstream media Educate mainstream financiers and policy-makers over the risk of a disorderly transition Identity Vision Mission
  3. 3. 3  Theory of change  Report findings  Online tool Outline
  4. 4. 4 Theory of change
  5. 5. 5 Two-year modelling effort 6,685 coal units 95% operating capacity 90% under construction capacity 34 countries
  6. 6. 6 Two-year modelling effort Cost short and long run marginal cost Profitability based on long run marginal cost Competitiveness based on LCOE of wind and solar Phase-out year below 2oC scenario analysis Stranded asset risk below 2oC scenario analysis
  7. 7. 7 Report findings – profitability independent of additional climate and air policy
  8. 8. 8 Report findings – competitiveness independent of additional climate and air policy
  9. 9. 9 Report findings – below 2oC stranded asset risk
  10. 10. 10 Scale of the challenge – timing issue
  11. 11. 11 Scale of the challenge – collective action issue Jobs? Regional development? Retraining workforce? Lobbying & cronyism? Economic competitiveness? Attack on capital? Shareholders vs. workers? Workers vs. consumers? Consumers vs. shareholders?
  12. 12. 12 A requisite to get policymakers, investors and civil society to work effective together DATA!
  13. 13. 13 Online tool
  14. 14. 14  Independent of climate policy coal power is struggling to make money and compete with alternatives  If policymakers, investors and civil society don’t work together getting off coal in a manner consistent with Paris is highly unlikely  Transparent economic and financial data is essential to get off high- cost coal in a timely manner Conclusion
  15. 15. For more information please visit: @CarbonBubble If you are interested in knowing more, please get in touch: