A new study from researchers at the Oxford Martin School at the University of Oxford has warned that a fifth of current global power plant capacity is at risk of becoming stranded assets under a scenario in which the planet reaches its climate goals of halting warming at 1.5 to 2°C above pre-industrial levels.
Published in the journal Environmental Research Letters, the open access article — Committed emissions from existing and planned power plants and asset stranding required to meet the Paris Agreement — was written by Alexander Pfeiffer, Cameron Hepburn, Adrien Vogt-Schilb, and Ben Caldecott, from the Oxford Martin School at the University of Oxford. The researchers explain that future CO2 emissions from coal and gas power plants already in operation will overshoot the target of the Paris Climate Agreement to stabilize temperatures at 1.5 to 2°C above pre-industrial levels by a whopping 60 gigatons of CO2.
Unfortunately, as the authors also point out, over the coming decade the power sector is expected to invest around $7.2 trillion in power plants and grids around the world, which will result in a further 270 gigatons of CO2 emissions, according to the Oxford researchers.
“Existing power plant stock, if operated until the end of its useful life, would emit around 300 gigatons of CO2, which exceeds the 240 gigatons we can afford if we are to meet our climate goals,” said lead author Alexander Pfeiffer of the Oxford Martin Programme on Integrating Renewable Energy. “Any investment made today in CO2-emitting infrastructure is going to have a considerable effect on humanity’s ability to achieve the ambitions of the Paris climate agreement.”
In the end, even if the entire pipeline of planned power plants was cancelled, around 20% of the current global capacity of power plants would still become stranded in order to meet the climate goals of the Paris Climate Agreement.
“Companies and investors need urgently to reassess their investments in fossil-fuel power plants, and government policies need to be strengthened to avoid further carbon lock-in,” Pfeiffer said.
Specifically, the number of coal plants under construction or in planning in early 2017 (according to the study’s data) were responsible for 77.5% of the total cumulative CO2 emissions. Specifically, of the 270.8 gigatons of CO2 (GtCO2) planned over the next decade, 210 GtCO2 is attributed to coal projects — and 162.4 GtCO2 is expected to be built in Asia.
“To tackle anthropogenic climate change we need to halt the construction of fossil fuel power generation and immediately begin the dismantling of coal-fired power stations,” explained Dr Ben Caldecott, Director of the Oxford Sustainable Finance Programme at the University of Oxford and co-author of the study. “New coal, let alone existing coal, is entirely incompatible with the Paris Climate Change Agreement.”
“The analysis shows we are already in a serious dilemma,” added Professor Cameron Hepburn, Director of the Economics of Sustainability Programme at the University of Oxford and co-author of the study. “We must choose between scrapping functioning equipment, capturing the carbon pollution, deploying expensive negative emissions technologies, or abandoning agreed climate goals. Adding new coal makes navigating between the devil and the deep blue sea even harder. ”
Even if, however, we begin deploying significant levels of carbon capture storage and negative emissions technologies, the authors explain that that we will still be stranding significant levels of assets, and that building more fossil fuel power plants over the next decade will only increase that number.
“Emissions are going to have to decrease rapidly if climate targets are to be met,” Pfeiffer added. “But the current substantial plans for new fossil-fuel powered generators suggests the risk of asset stranding isn’t being sufficiently considered. This is likely to prove extremely costly in the long-run, to both the industry and its investors.”
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