Accelerating the coal-to-clean transition

Over the past year, Jacobson Solutions has been working with our collaborators to identify whether it is viable to transition coal power plants to renewables, before 2030, without significant financial subsidies or grants.

We have identified 5 power plants in 5 different countries (Botswana, Colombia, Morocco, Romania, and Thailand) where one could structure transactions that make the transition feasible and profitable, while drawing in billions of USD in investment. The costs of the transaction include site rehabilitation, some new transmission infrastructure, and subsidization of the retraining and reemployment of impacted workers in the wider economy. The economics of the transaction can carry these costs in the cases we identified, while still generating returns in excess of typical cost of capital.

A key requirement is a willingness by existing utilities, Independent Power Producers, and regulators to restructure existing Power Purchase Agreements (PPAs). The new PPAs would extend the contracted term for energy sales, provided the coal facility is ramped-down, decommissioned, and replaced by renewables and energy storage before 2030.

Based on the characteristics of those 5, there may be as many as 800 more units in 54 countries where such transition transactions could be viable by 2030.

More financial institutions, development banks, utilities, developers, and governments need to think about transitioning their asset base by 2030. Jacobson Solutions hopes to continue to support the activity and implementation of some of these transactions in future.

Thanks go to the sponsors of the work, our collaborators at IEEFA, and the many individuals who tested and supported our efforts in understanding this complex topic.

We won’t republish the article here, but instead follow the link to the IEEFA website

https://ieefa.org/resources/accelerating-coal-clean-transition