Finance - 20/May/2021

Coal-for-renewables finance model raises doubts

The model of taking coal plants offline in exchange for renewable energy finance is growing in popularity with a concessional funding version underway in Chile. But experts are concerned the incentives could be unnecessary and may even encourage some plants to stay online

Market dynamics should see the end of coal without additional funding to retire the plants

SIMPLE IDEA One of the easiest ways to eliminate coal from energy systems could be to offer plant owners a financial incentive to switch to renewables

DOUBLE TROUBLE Detractors worry such incentives are not needed because renewables are forcing coal plants offline anyway—and the prospect of handouts might entice some plant owners to delay closures

KEY QUOTE Why am I bailing out a shareholder who has made an investment and had a return? ...

 

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