Investors should adjust the valuation ascribed to
coal generation assets held by utilities.
This approach helps utilities refinance the costs of stranded
coal generation assets and redirect savings toward cheaper renewable energy to replace generation capacity, while directing funds to communities or workers affected by coal closures.
Even a wedge of natural gas has some value in this view, since it displaces a huge volume of long - lived
coal generation assets, which increases the odds that zero carbon sources will be able to muscle in later.
Not exact matches
According to S&P,
coal is poised to see a shrinking share of the world's power
generation market, which could lead to some
coal reserves becoming stranded
assets.
And given the current cost competitiveness of natural gas, there is little reason for utilities to include
coal in the planning mix for new
generation assets, Barnett said.
Furthermore, the relatively quick process of converting
coal - fired plants to biomass - fired
generation is an attractive benefit for power generators whose
generation assets are no longer viable as
coal plants due to the expiration of operating permits.
Furthermore, the relatively quick process of converting
coal - fired plants to biomass - fired
generation is an attractive benefit for power generators whose
generation assets are no longer viable as
coal plants due to the expiration of operating permits or the introduction of taxes or other restrictions on fossil fuel usage or emissions of GHGs and other pollutants.
In sum,
generation additions (plus removal of
coal costs) are in the order of $ 35 billion and additional investments relate to transmission and distribution
assets.
My Clean Break column today takes a closer look at efforts by Ontario Power
Generation to convert some of its
coal - fired generating
assets into biomass - burning power plants, including potentially several units at its Nanticoke Generating Station — North America's largest
coal plant.
«It's not like power supply of the past where you had a bunch of nuclear power plants, a couple
coal plants and some gas - fired
generation with the odd renewable
asset thrown in, and then a jumbled mix of grey and green power being sold at the consumer end,» says Uli Suedhoff, a director at GE Renewable Energy in Europe.
However, we find that falling renewable energy costs, air pollution regulations and rising carbon prices will continue to undermine the economics of
coal power in the EU, potentially making
generation assets unusable by 2030.