Business Case for CO₂ reduction

SwitchCoal is a business case (for purely economic reasons),

because levelized costs of renewables (wind-solar-battery) are less than operating costs of (even existing) coal plants,
at least since 2017 (e.g. in Germany), see the analysis of BloombergNEF from 2020, including these LCOE country graphs:

Cash in these additional Profits, by engaging Joint Ventures

SwitchCoal takes plant owners and operators on board with their local influence on authorities and politics.
Re-using their existing grid connection saves 2-3 years in project times, compared with conventional renewable projects.
Joint Ventures enable both - the renewable's investor and the coal plant owner - to cash in the additional profits after 2-3 years!

(the comparable study from IEEFA - Accelerating the coal-to-clean transition - shows similar results)

Unique Selling Points

• Cooperation with coal plant owner (instead of Competition to the renewables)
• Re-use of existing grid connection (instead of need to apply for permits)
• Re-use of existing PPA… (for the newly build assets)
  

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Possible ways to get it done

1. buy the coal plant, and force the transition yourself, participating in the additional profits
2. empower the coal plant owner (by motivation, direct invests, partnership…)
3. empower developer companies for the renewables, which are operating in that area
   (trusting in their local experience and focusing on Joint Ventures with the coal plant owner after  land protection ...)

Terms of the Transformation

The business case will perform, if the terms of the transformation ensure (financial) perspectives for the following parties:

• ‍The owner of the coal asset (in a "buy the coal plant" scenario) receives a net present value-corrected payout for the equity share of the remainder of the PPA term for which the asset was contracted (if there is no PPA because it’s a state-owned facility, the value of the equity can be tied to the anticipated remaining productive lifetime of the asset). ‍
• The owner of the renewable asset (potentially the existing one) receives a 20- to 30-year PPA for the newly built asset. ‍
• Debtors receive the outstanding principal and remaining interest without a haircut. ‍
• The government / public sector receives income through PPA transaction fees, which can be invested earmarked - used
  e.g. to lower the price for electricity or to upgrade the grid in general. Alternatively (without governmental support):‍
• The developer or renewable operator can cash in the additional profits as Return of Investment
  (as shown in the SwitchCoal study), maybe in order to be able to switch more coal plants all around the globe.‍
• The employees of the existing coal facility are compensated through training and job placement programmes. ‍
• Consumers benefit because the economics of the transaction ensure that wholesale energy prices are unchanged or less
  (with long-term price stability or certainty because of reduced dependence on commodities). ‍
• The broader local community sees new investment in renewable assets and a cleaner environment.

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Feasibility: why Focus on Coal?

The CO₂ emissions of the power sector are mainly caused by coal (29%), gas (9%) and oil (2%).

For a short-term reduction we need to keep in mind the long-term investments, which intervene a rapid change:

• Oil: there are more than 1 billion cars globally, these will not be phased-out within the next 10 years.
• Gas: hundreds of millions of heating units and large industries depend on it.
• Coal: coal-fired power plants become useless anyway, due to the overrun of the Renewables.

So it definitely makes sense to motivate coal plant owners to drive the transition instead of struggling with it.
Around 2,515 coal power plant sites are existing and monitored by Carbon Brief Ltd, each of them can be replaced within 2-3 years.

UN's Antonio Guterres said at the COP27 (2022): 'the world is on a ‘highway to climate hell’.

‍That means for the near Years:

                                               "1.5 degrees still within reach"