Fossil fuels remain the backbone of global power systems, with their 64% share of power generation relatively unchanged since 2000. In absolute terms, fossil fuel generation has increased by 70% since 2000, reaching a new high of around 17 000 TWh in 2018.

Coal, by far the largest fuel source, accounts for 38% of global electricity generation, followed by gas at around 20%. In major emerging economies such as China and India, the share of coal-fired power exceeds 60%. In many advanced economies, including the United States, Germany and Japan, coal and gas continue to provide the bulk of electricity.

Coal- and gas-fired power plants have been providing reliable, flexible and affordable electricity for many decades. The fossil-based power plant fleet is also crucial to the operation of the electricity grid, for example by providing inertia and frequency control ancillary services. Coal-fired power plants, in particular, have helped to bring access to electricity to hundreds of millions of people across China, India and Southeast Asia, and have enabled economic development. 

As a result of this high reliance on fossil fuels, power is the largest carbon emitter in the energy sector, accounting for nearly 40% of global energy-related emissions. Emissions from the power sector reached a new high in 2018, at 13.8 GtCO₂. Coal-fired power generation is the single largest source of emissions from energy, accounting for 10 GtCO₂ or 29% of energy-related CO₂ emissions in 2018. It also accounts for nearly 75% of power sector emissions. Notably, CO₂ emissions from coal-fired power in China alone are more than 30% larger than the CO₂ emissions from all passenger vehicles globally.

In the Paris Agreement, countries agreed to hold the increase in the global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C. The scale of current power sector emissions and the vital role of electrification in decarbonising end-use sectors (buildings, industry and transport) mean that countries must tackle their emissions from power to meet these global climate goals.

Continuing to operate the world’s existing fossil power fleet as it is would “lock in” a vast amount of CO₂ emissions. The scale of this potential lock-in of emissions is worsened by the relatively young age of the existing fossil fuel power plant fleet. Currently 2 080 GW of coal-fired power plants are operating worldwide, almost 60% of which are 20 years old or younger. This compares to a typical operational life of around 50 years. Similarly, gas-fired power plant capacity today stands at 1 700 GW, with an average age of just 19 years. 

The average age of the coal-fired fleet in Asia is only 12 years, and hence owners are likely to want to operate these plants for decades to come. Asia accounted for 90% of all coal-fired capacity built worldwide over the past 20 years. China built by far the most new coal-fired plants in that period, about 880 GW, followed by India (173 GW) and Southeast Asia (63 GW). There were also some additions of coal-fired capacity in Europe (45 GW), Korea (28 GW), United States (25 GW), Japan (20.5 GW) and Africa (10 GW).

The existing global coal-fired fleet is set to produce electricity and release CO₂ emissions for many years to come. On the basis that plant operations and economics are in line with stated policies, CO₂ emissions from the existing coal fleet would emit a cumulative 175 GtCO₂ over the period to 2040 – equivalent to 5 times total energy sector emissions in 2018 – despite annual emissions steadily declining to about 60% of today’s levels. If we assume a 40-year plant lifetime, rather than 50, the cumulative emissions lock-in from coal plants would be about 25 GtCO₂ lower.

Subcritical coal-fired power plants (particularly without combined heat generation) are the least efficient designs when producing only electricity and produce significantly higher emissions per unit of power generated than more modern coal plants. The emissions savings from ultra-supercritical or advanced ultra-supercritical plant designs compared to subcritical plants amount to some 15-30%. With a capacity of over 900 GW, subcritical plants produced around 4 300 TWh in 2018, and accounted for more than 40% of global CO₂ emissions from the coal fleet. Close to half of subcritical plants in operation are under 20 years of age and could emit more than 60 GtCO₂ over the next two decades.

More efficient supercritical and advanced designs, at an overall 660 GW capacity, produced around 3 500 TWh in 2018 and accounted for about 30% of coal plant CO₂ emissions. The remainder comes from combined heat and power plants. Over the next two decades, CO₂ emissions from efficient coal-fired power plants are set to remain largely unchanged under stated policies. However, emissions from subcritical plants are projected to fall by two-thirds.

In addition to the existing fleet, over 170 GW of coal-fired capacity was under construction at the start of 2019, mostly in China and India. The completion of these facilities will expand the global coal fleet by some 10% and risk locking-in another 15 GtCO₂ of emissions over the period to 2040.

The IEA World Energy Outlook Sustainable Development Scenario (SDS) puts forward an integrated approach to achieving the three key energy-related Sustainable Development Goals: achieving universal energy access, reducing CO₂ emissions in line with the Paris Agreement, and reducing the health impacts of air pollution. Underlying the SDS is a profound transformation of both electricity demand and supply.

Electricity demand rises by some 60% over the period to 2040 in the SDS, despite strong energy efficiency measures, driven by economic growth, electrification of end uses and increased access to electricity in developing economies. As a result, electricity meets around 30% of final energy use in 2040, up from some 19% today.

The electrification of end-uses increases both the urgency and the challenge for the power generation sector to decarbonise in parallel with rapid expansion to meet the growing demand. In the SDS, power generation is all but decarbonised by 2040: 85% of global generation comes from low-carbon sources, compared to only 35% today. This causes CO₂ emissions to fall sharply. Generation from renewables rises to around four times today’s level by 2040, led by wind and solar PV, which account for almost 40% of total generation in 2040.

As discussed in detail in the other sections, the very high share of renewables generation and capacity by 2040 in the SDS requires an extremely flexible power system to ensure stable and secure operation.

The expansion of renewables capacity speeds up substantially in the SDS compared to current build rates. Solar PV additions average 180 GW per year in the period to 2040 compared to 97 GW in 2018. China and India alone make up about half of all solar PV additions. Wind also grows rapidly, with 120 GW additions per year on average, more than double the additions of some 50 GW seen in 2018. China drives this expansion with more than 35 GW of additions each year compared to 20.6 GW in 2018.