Scrapping of planned coal power and accelerated investment in wind and solar are essential if we are to reach the Paris climate goals. The good news: It can be done significantly cheaper than the International Energy Agency (IEA) estimates, writes Terje Osmundsen, Senior Vice President of the Norwegian-based international solar power company Scatec Solar.
Two new reports shed new light on how to meet the Paris goals:
If Turkey, Indonesia, Japan, Bangladesh, Pakistan, Vietnam, Thailand, South Korea and a few other countries follow the path of China and India and start to put coal developments in the freezer, the world could be saved from devastating climate change.
Wind and solar can contribute to almost half of the CO2 cuts required to keep global warming below the 2°C target, if we achieve an average yearly growth rate of 12 and 18% respectively until 2030.
The cost of reaching these goals is lower than told by the International Energy Agency (IEA) to the G20 Ministers who met in Baden-Baden in Germany mid-March.
So why are these countries still betting their energy future on coal?
I think the answer has to do with the perception that only large centralized conventional power plants can provide the “baseload” power required to secure the countries’ economic development. That used to be the case, but it’s no longer so. As the experience from Scandinavia, Germany, and California shows, the required security and flexibility of supply can be achieved through a combination of, among others, large-scale deployment of renewables, enlarged cross-border interconnection capacity, and various forms of storage, supplemented by gas-fired peaking plants.
Hopefully, the examples set by China and India last year can serve as a model for the remaining countries betting their future on coal. A modest carbon tax would have been sufficient to accelerate the phasing-out of coal, also in the top 10 coal countries. As a substitute, it is now important that the new sources of “climate finance” committed in the Paris treaty, are not dispersed into myriads of initiatives that may keep diplomats and development agencies busy but fail to deliver result-based investments on the ground.
An initiative expected to be launched by the Norwegian government later this year, can serve as an example. The proposal is to set up a facility that will offer partial credit risk guarantee products to renewable energy projects in the developing countries, provided the projects can offer certified CO2-emisson reductions. The initiative is meant to incentivize the market, for example by stimulating private banks and emitters of green bonds to take a more active role in financing renewable energy projects in developing countries.
More innovation is certainly required if we want to stimulate market-based alternatives to the more than 500 coal plants still in the pipeline.
Read more at The Coal-Free 2°C Scenario: Within Reach, and Cheaper Than Told by IEA