Today, the Sierra Club released a new study, revealing that the days of cheap, affordable coal fired power are now over. The report, Locked In: The Financial Risks of New Coal-Fired Power Plants in Today’s Volatile International Coal Market, challenges the traditional view that coal is a cheap and reliable energy option for countries around the world. At a time when coal-fired power is at a historic low in the U.S. and the EU, the report warns of developing countries locking themselves into coal plant investments that face significant financial risk from rising costs.
Authored by Bruce Buckheit, former director of the U.S. Environmental Protection Agency's (EPA) Air Enforcement Office, the report upends a common argument in favor of coal investment—that it is cheap and affordable. Rather, the report highlights the rising costs of coal plant construction, rising global coal prices and the emergence of an “Organization of Coal Exporting Countries” (OCEC)—all of which make electricity from coal-fired power plants inherently risky and unaffordable for countries around the world.
“Environmental and public health concerns aside, the truth is coal is just a lousy financial investment,” says Justin Guay, Washington representative for the Sierra Club. “Policymakers and financial institutions need to catch up to this 21st century reality—coal is no longer affordable.”
According to the report, the primary factor affecting the viability of coal-fired power plant projects is increasing costs. Construction cost overruns of up to 100 percent have become common-place while coal prices continue to rise around the world. The latter is exacerbated by an emerging OCEC that dominates a highly concentrated global coal market. The top two producers alone—Australia and Indonesia—account for more than 50 percent of global coal exports, providing ample opportunity for maintaining high coal prices. Often prevented from passing on these costs to consumers due to domestic regulatory structures, coal plant investments in China and India retain maximum exposure to these cost fluctuations which puts significant pressure on profit margins, making them extremely risky investments.
The fallout from these rising costs is already evident around the world. In India, the 4GW Tata Mundra Ultra-Mega Power Plant project is seeking to be released from its long-term power purchase agreements in the face of billions of dollars in losses, before it has even completed construction. In the U.S. the recently-completed Spiritwood Station coal plant in North Dakota has opted to remain idle rather than operate at a loss.
“We are seeing a rise in non-performing coal assets around the world,” says Guay. “These risky investments force average citizens to pay the price for increasingly expensive coal fired power.”
Compounding these problems is the opportunity cost of the alternative—clean, renewable energy. Leading competitors such as wind energy and solar photovoltaic (PV) panels are experiencing plummeting prices and rapidly becoming competitive with coal fired power. The report documents that the cost of power from solar PV has fallen by more than 60 percent since 2008, while new wind power can provide energy at 5-10 cents/kWh, making it competitive with coal in any market.
“Clean energy is increasingly competitive around the world," says Guay. “Countries and financial institutions that lock themselves into coal investments are exposed to the risk volatile international fuel markets—something clean energy investments avoid.”
Ultimately, the report argues that avoiding ‘lock-in’ to new coal fired power plant investments requires assuming that coal prices will rise, using accurate discount rates and establishing a risk premium for any proposed coal plant investment. The combination of these measures can help shield financial institutions from the increasing risks associated with coal.
The growing Texas solar industry is offering a safe harbor to unemployed oil and gas professionals amidst the latest oil and gas industry bust, this one brought on by the novel coronavirus pandemic, the Houston Chronicle reports.
EcoWatch Daily Newsletter
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By Aaron W Hunter
A chance discovery of a beautifully preserved fossil in the desert landscape of Morocco has solved one of the great mysteries of biology and paleontology: how starfish evolved their arms.
The Pompeii of palaeontology. Aaron Hunter, Author provided<h2></h2><p>Although starfish might appear very robust animals, they are typically made up of lots of hard parts attached by ligaments and soft tissue which, upon death, quickly degrade. This means we rely on places like the Fezouata formations to provide snapshots of their evolution.</p><p>The starfish fossil record is patchy, especially at the critical time when many of these animal groups first appeared. Sorting out how each of the various types of ancient starfish relate to each other is like putting a puzzle together when many of the parts are missing.</p><h2>The Oldest Starfish</h2><p><em><a href="https://www.biorxiv.org/content/10.1101/216101v1.full.pdf" target="_blank" rel="noopener noreferrer">Cantabrigiaster</a></em> is the most primitive starfish-like animal to be discovered in the fossil record. It was discovered in 2003, but it has taken over 17 years to work out its true significance.</p><p>What makes <em>Cantabrigiaster</em> unique is that it lacks almost all the characteristics we find in brittle stars and starfish.</p><p>Starfish and brittle stars belong to the family Asterozoa. Their ancestors, the Somasteroids were especially fragile - before <em>Cantabrigiaster</em> we only had a handful of specimens. The celebrated Moroccan paleontologist Mohamed <a href="https://doi.org/10.1016/j.palaeo.2016.06.041" target="_blank" rel="noopener noreferrer">Ben Moula</a> and his local team was instrumental in discovering <a href="https://www.sciencedirect.com/science/article/abs/pii/S0031018216302334?via%3Dihub" target="_blank" rel="noopener noreferrer">these amazing fossils</a> near the town of Zagora, in Morocco.</p><h2>The Breakthrough</h2><p>Our breakthrough moment came when I compared the arms of <em>Cantabrigiaster</em> with those of modern sea lilles, filter feeders with long feathery arms that tend to be attached to the sea floor by a stem or stalk.</p><p>The striking similarity between these modern filter feeders and the ancient starfish led our team from the University of Cambridge and Harvard University to create a new analysis. We applied a biological model to the features of all the current early Asterozoa fossils in existence, along with a sample of their closest relatives.</p>
Cantabrigiaster is the most primitive starfish-like animal to be discovered in the fossil record. Aaron Hunter, Author provided<p>Our results demonstrate <em>Cantabrigiaster</em> is the most primitive of all the Asterozoa, and most likely evolved from ancient animals called crinoids that lived 250 million years before dinosaurs. The five arms of starfish are a relic left over from these ancestors. In the case of <em>Cantabrigiaster</em>, and its starfish descendants, it evolved by flipping upside-down so its arms are face down on the sediment to feed.</p><p>Although we sampled a relatively small numbers of those ancestors, one of the unexpected outcomes was it provided an idea of how they could be related to each other. Paleontologists studying echinoderms are often lost in detail as all the different groups are so radically different from each other, so it is hard to tell which evolved first.</p>