Mounting Risks Of Impairments Globally In Coal Investments

Mounting Risks Of Impairments Globally In Coal Investments by Gerard Wynn, IEEFA.org

A Rising Likelihood of Stranded Assets in Japan, China, and Around the World

Changes sweeping the electricity sectors in Japan and China suggest a hugely uncertain future for coal-fired power and a rapidly increasing risk of stranded assets.

New research shows growing over-capacity in these markets, likely complications from regulation and rising competition from lower-cost renewable power. Coupled with massive recent write-downs in coal-generation assets in Europe and with plans in the U.S. to close more than 102 gigawatts of coal-fired power plants by 2020, the findings serve as a global warning: Coal power expansion is dicey.

The very concept of stranded assets—investments whose value falls unexpectedly or that...