When will the world’s coal-fired power plants retire? Predicting retirement ages and lock-in based on historical data

To mitigate climate change, many countries are phasing out or expediating retirements of coal-fired power plants (CFPPs). But some 6,500 units totalling 2,000 GW of capacity remain installed globally. In addition, 450 GW of new construction will prolong the lifetime of this fleet. Once built, CFPPs operate for around 40 to 50 years. If all existing and new plants achieved a similar lifetime, some 278 billion t-CO2 would result, blowing any prospect of achieving climate mitigation targets under the Paris Agreement. Strategies are thus needed to confront committed emissions and lock-in, where plant retirement is hampered by financial, political and social factors. Predicting the remaining operational lifetime of existing CFPPs as well as committed emissions and lock-in is therefore a vital step to this end. Several studies have predicted global CFPP retirement ages. But research has been limited to top-down approaches where retirement volumes or schedules are prescribed in accord with climate mitigation scenarios. Conversely, understanding lacks on the factors that historically influenced CFPP lifetimes and how these will affect future retirement ages. Moreover, many governments and market actors will not confirm to carbon budgets when deciding retirement schedules. Thus, it is still unclear what operational lifetimes to expect in future, what emissions will result, and what countries will suffer most from coal lock-in. Accordingly, this research aims to determine the factors that influenced historical CFPP retirements and then predict future retirement ages based on these results. We also aim to predict carbon emissions based on predicted retirement ages and quantify the degree to which particular countries are locked into coal. Our method has four steps. First, we collected data from Global Energy Monitor to build a sample of roughly 1,600 units retired in 33 countries over 2010 – 2020. Second, we conducted a systematic literature review to identify the factors expected to drive or hamper CFPP retirements. Third, we used supervised machine learning to determine the factors that affected retirements over 2010 – 2020. We then used the results to predict future retirement ages for 6500 units currently active in 69 countries. Fourth, we utilized predicted retirement ages to estimate committed emissions and develop a coal-lock-in index. This reflects the structural difficulty each country is expected to encounter when shifting away from coal. The literature review identified 13 country-level factors with data is available. The historical analysis revealed the three most important as: “GHG emissions”, “ renewable energy policy” and “share of renewables”. These are followed by less influential but still important factors like “political stability”, “economic growth”, and “contribution of coal to GDP (coal rent)”. In ongoing work, we will apply this model to predict future retirement ages, committed emissions and coal lock-in. We make two important contributions to knowledge. First, by predicting future retirements based on historical evidence and country-specific conditions, we provide more accurate estimates of future CFPP lifetimes and emissions than previous literature. Second, the creation of a novel coal lock-in index allows us to identify global hotspots that merit attention by policymakers and investors.