The cost of financing coal power plants has never been more expensive
23 April 2021
A new report ‘The energy transition and changing financing costs’, seeks to understand how financing costs across different energy technologies and markets has changed over the last twenty years. For decades, infrastructure for coal, oil, and gas was seen as a relatively safe investment while renewables barely attracted the private sector’s attention. However, the situation is now reversing, with the cost of financing new fossil-fuel infrastructure is rising while at the same time falling for new renewable technologies.
Particularly impacted is the coal industry, with loans to finance coal mines and coal fired power plants rising steeply. Oil and gas have so far only seen moderate rises in lending costs. This could be as a result of natural gas displacing coal. But Ben Caldecott, Director of the Oxford Sustainable Finance Programme, says, "We don’t see anywhere near the same coherence or stringency of policy packages targeting oil and gas production or gas-fired power generation as we do with coal."
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