In April 2020, Sweden and Austria joined Belgium among the first countries in Europe to have successfully turned their backs on coal-powered electricity generation. While Austria’s move was in line with national plans to phase out by 2020, Sweden’s exit from coal power came two years early, as the closure of the last coal-fired unit was initially planned for 2022. Belgium closed its last coal-fired power plant in 2016. The shift away from coal-fired power plants highlights the continued collapse of the coal industry as renewable energies strengthen their position not only as the cleaner, but also cheaper alternative. This transition is accelerated by the ongoing COVID-19 pandemic. According to the IEA’s Global Energy Review 2020, the COVID-19 outbreak and subsequent lockdowns have reduced global energy demand by 5% and as a result the output of coal-fired generators fell by 10%. Meanwhile, renewables are expected to experience demand growth across the remainder of 2020.
The implementation of state-level climate policies relies on electric utilities to phase out coal and develop renewables in their generation fleets. ISS ESG Energy & Extractives data reveals that during 2017 to 2019, the majority of the top 20 European Utilities have moved away from coal power in line with national strategies, with the exception of Poland. Some coal-fired power plants are prematurely retired as they become uneconomical to operate for their full expected life. In the meantime, renewable energies have grown significantly in terms of generation output, and even outnumbered fossil fuel-fired power generation for many utilities. ISS ESG provides data on installed capacity, generation output, and revenues derived from power generation from different sources of energy, which are essential for assessing transition risk and gauging alignment with a global transition pathway set by the Paris Agreement, in a time where demand for higher carbon pricing and fossil fuel exit strategies become the norm.
ISS ESG Sector-Based Research – Energy & Extractives
Assesses companies’ involvement in the fossil fuel, renewable energy and nuclear power sectors, including specific screens for arctic drilling, carbon reserves, coal mining, fossil fuel, hydraulic fracturing, nuclear power, oil sands and shale oil & gas.