Clean energy investor Ramez Naam discusses convincing banks to stop lending to new coal projects. Standard Chartered Bank's Amit Puri explains their decision. Laura Cozzi warns about China's coal plants. Simon Murphy talks about redeveloping Battersea Power Station from coal to sustainable space.
Transition to renewables is economically feasible due to declining costs, making renewables more cost-effective than coal.
Financial divestment from coal by banks signals recognition of environmental risks and shifting investment towards renewables.
Deep dives
Transition from Coal to Renewable Energy Sources
The transition from coal to renewable energy sources is becoming more economically viable and necessary. Countries like the US and Europe have significantly reduced coal usage due to the arrival of cheaper natural gas, solar, and wind energy options. The declining cost of renewables, exemplified by the rapid decrease in solar power costs, has made building new solar and wind projects more cost-effective than operating existing coal plants. Forecast models showing constant coal demand are being challenged by the reality of shifting energy trends toward cleaner and more sustainable options like renewables.
Financial Institutions' Role in Transitioning Away from Coal
Financial institutions are starting to divest from fossil fuels, particularly coal, in response to the environmental and economic challenges posed by continued coal usage. Banks like BlackRock and Standard Chartered are refraining from funding new coal projects, shifting their investments towards renewable energy sources instead. This shift is driven by a combination of environmental concerns, commercial rationale, increasing carbon tax possibilities, and the recognition that coal assets may become stranded in the future.
Renewable Energy's Growth and Impact on the Coal Industry
Renewable energy sources like solar and wind are growing rapidly, with significant cost reductions making them attractive alternatives to coal for electricity generation. Financial forecasts that underestimate the growth of renewables have led to misconceptions about the viability of coal compared to cleaner energy options. The rapid expansion of renewables, primarily driven by countries like China, has shown that solar and wind can outpace coal in terms of installation rates and cost-effectiveness, challenging the traditional dominance of coal in the energy sector.
Burning coal to generate electricity is one of the biggest sources of carbon emissions. But climate change aside, does it even make commercial sense anymore?
Laurence Knight speaks to clean energy investor Ramez Naam, who relays the story of how he managed to convince one major Asian bank chief executive to stop lending to new coal power projects on the grounds that he was unlikely to get his money back.
Another bank to have renounced lending to the coal industry is Standard Chartered. Their head of environmental and social risk, Amit Puri, explains why he thinks others will soon join the bandwagon. Meanwhile Laura Cozzi of the International Energy Agency warns that whatever the bankers may think, the fact is that most of the world's coal plants are in China, where it is the government that decides what gets built.
Plus, what to do with a derelict coal-fired power station? Laurence visits London's iconic Battersea Power Station (pictured) and speaks to Simon Murphy the man in charge of its redevelopment.
(Picture: Battersea Power Station; Credit: Johnny Greig/Getty Images)
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