Tipping point: Global renewable energy leaders outperform on global equity markets
Download Full Report
Key Findings
With global capital fleeing thermal coal and coal-fired power generation – the largest, most dirty, most emissions intensive sector, IEEFA suggests financial markets are not waiting to see if Paris targets might be met.
Coal use in power generation will continue for a couple of decades to come, mainly in China, India and emerging markets where brand new coal-fired power plants are still be commissioned today, with engineering life expectations of 40 plus years.
As the capital flow moves to predominantly bank-rolling renewable energy, the capital market derates the incumbent stranded industry players owning now stranded thermal power plants.
Executive Summary
The world could well look back on 2019 as the tipping point when global capital markets accepted the technology-driven inevitability and grid parity cross-over from polluting thermal coal and the increased uptake of sustainable clean renewable energy.
The largest listed fossil fuel companies still toying with thermal coal and coking coal, and even oil and gas, have been massively down-rated, and shareholder wealth destruction has been staggering, in absolute terms and relative to the overall market rise.
At the same time, more light has been shining on renewable energy, the world’s largest listed renewable energy asset owners/investors outperforming the equity market, those best looking to embrace the opportunities in the current technology-led disruption of the global electricity sector.
The International Energy Agency says unabated coal use must cease in the OECD by 2030 and globally by 2050 for the Paris Agreement to be met.
With global capital fleeing thermal coal and coal-fired power generation – the largest, most dirty, most emissions intensive sector, IEEFA suggests financial markets are not waiting to see if Paris targets might be met.
Indeed, signs suggest 2019/20 is a tipping point for thermal coal in global capital markets.
Press release: Surging energy prices accelerating pace of wind, solar and battery adoption
Please view full report PDF for references and sources.
