• Clean energy investment must be scaled up massively and urgently to enable coal transitions. In the APS, global investment in low-emissions power averages around USD 960 billion per year from 2023 to 2030 – around 30% of total energy investment, up from 25% the last few years. The substantial capital invested in existing coal plants that has yet to be recovered from operation revenues is potentially a major barrier to coal transitions, especially in emerging and developing economies, as under‑recovery presents risks to the financial stability of stakeholders.
  • For many countries, raising debt and attracting the financing required to invest in clean energy, pay for retrofits or retire coal assets early has become much harder in recent years due to cost inflation, rising borrowing costs and the dislocation of global supply chains. In emerging and developing economies, private finance will need to play a key role in decreasing coal power given constraints on public budgets. Phasing out older coal plants will be necessary to secure these investments, though honouring existing contracts remains important to avoid spooking the market. In the APS, over half of funding from 2023‑2030 is from the private sector, 35% from state-owned enterprises and 15% from other public funds.
  • Policies to facilitate the financing of clean energy must go hand in hand with measures to restrict the financing of the construction of new coal plants, as well as investments in existing ones. New coal plants continue to be built in some countries, notably China. Several governments and financial institutions have announced policies to restrict or prohibit financing for coal power projects and investments in recent years, including China’s halt to all financing for new overseas plants in 2021. However, any such policies must ensure that there is no disruption to security of electricity supply, which remains the ultimate priority throughout the coal transition.
  • Bringing forward the retirement of both existing and yet-to-be built coal-fired power plants and their replacement with clean generating technologies will need to play an increasingly important role in lowering emissions in those countries where coal still accounts for a significant share of the generating mix. Over 2023‑2030, around 20 GW of coal power plants operating today are retired before they reach 30 years, of which about 50% are retired before the age of 20, in the APS.
  • There is no single blueprint to phase out coal‐fired generation; any action must be tailored to the age and type of coal plants, as well as to the varied market structures within which they operate. The many options include nationalising or buying out plants to retire them; creating mechanisms to monetise saved emissions; funds to compensate owners of retired plants; securitisation; accelerated depreciation; and concessional debt or refinancing mechanisms.