In the past three decades global capacity of coal-fired thermal power plants (TPP) increased by two and a half times. While in 1990 it was 856 gigawatts (GW), in 2022 it was about 2,100 GW, of which 1,400 GW fell on the APR countries. However, in a number of developed countries the rates of commissioning new coal-fired TPP were slower than the rates of decommissioning generation facilities. For example, in the period from 2000 to the first half of 2023 the USA commissioned 25.7 gigawatts (GW) of coal-fired TPP, Germany 13.7 GW, while they phased out 153.1 GW and 24.9 GW, respectively, according to Global Energy Monitor.
While this occurs, one of the key reasons for phasing out coal in Germany was the introduction of trade in carbon units, which increases the costs of burning the hard fuel, whereas in the USA the decisive role was played by the shale revolution increasing the availability of gas. As a result, in 2000 coal constituted 52% of power generation in the USA, in 2022 it was a mere 19%, while the share of natural gas rose from 16% to 39%, respectively, according to the Energy Information Agency (EIA).
According to Rystad Energy’s estimations, a similar process on the global level will begin from 2027, when the rates of decommissioning old coal-fired TPP will begin to exceed the rates of connecting new coal-based generation facilities to the grid. One of the prerequisites for this process was gradual delay in commissioning new coal-fired TPP in China. While in 2015 China commissioned 66 GW of coal-fired TPP, in 2019 – 48.9 GW and in 2022 ‘only’ 27.2 GW for a number of reasons, including the development of low-carbon generation. According to the data of the International Renewable Energy Association (IRENA), the share of China in 2022 amounted to the total of 46% of the global commissioning of wind and solar generators (123.1 GW from 266.2 GW).
Operating costs of RES projects are already lower than those of the projects based on traditional energy sources. According to the assessment made by Rystad Energy, at a coal price $122 per ton and gas price $609 for a thousand cu m levelised cost of energy (LCOE) from these sources in the APR will be $84 for a megawatt-hour (MW/h) and $144 for MW/h, respectively, which is higher than a similar indicator for solar panels and ground wind generators ($50 for MW/h). Despite RES’ dependence on weather conditions, cost advantage will further stimulate the construction of wind and solar generators: according to Rystad Energy’s forecast, their global commissioning will reach 440 GW, of which more than half will fall on the APR countries.
As a result, as early as the next year global generation by coal-fired TPP will begin to drop and because of this the indicator reached in this year may go down in history as an absolute maximum.