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Coal-to-Clean Success Stories

Coal-to-Clean Success Stories

Full Title: Coal-to-Clean Success Stories: Scalable Innovations from Promising Coal-to-Clean Transitions Around the Globe
Author(s): Shravan Bhat, Lila Holzman, Dhroova Khannan, David Lone, Iliad Lubis, and Tyeler Matsuo
Publisher(s): RMI
Publication Date: July 1, 2024
Full Text: Download Resource
Description (excerpt):

The global power sector’s transition from “coal-to clean” will be critical to meeting urgent climate targets but must be managed carefully to ensure the transition supports economic development. For a just coal-to-clean transition, existing coal assets must retire earlier than originally planned. This managed coal phaseout requires strategic financing to execute, which can be further complicated by tight balance sheets, a high cost of capital, and coal’s near-complete insulation from competition. Despite such barriers, financial institutions (FIs) are stepping in to make just coal to-clean transactions happen.

Carefully constructed financial tools called coal transition mechanisms (CTMs) can help generators, electricity customers, and the public overcome these complications and realize the benefits of cheaper clean energy. In the past few years, the first wave of FIs has begun to capitalize on the opportunity to enable early coal plant retirement through the use of CTMs in various markets globally. The continued deployment of CTMs to accelerate the energy transition is especially critical in emerging markets and developing economies (EMDEs), as a significant amount of financing will be needed to enable a managed and just coal transition. Although we have seen billions of dollars committed to coal transition globally, most of that finance has not yet been deployed (and not at scale).

With these case studies, RMI highlights lessons learned from a few of the first successful transactions and the enabling factors they relied on to promote increased awareness and use of such factors for managed phaseout transactions moving forward. Specifically, we have showcased managed phaseout transactions that enabled the early retirement of coal plants.

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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