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HSBC-funded whitepaper proposes ‘repowering’ coal plants to support renewables

Jovi Ho
Jovi Ho • 5 min read
HSBC-funded whitepaper proposes ‘repowering’ coal plants to support renewables
These coal plants could be converted into advanced nuclear, geothermal and thermal energy electrical heat stores. They could also be used as grid interconnection points for new renewable energy generation. Photo: Bloomberg
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A new whitepaper supported by HSBC proposes “repowering” coal-fired power plants (CFPPs) for use as heat stores or grid interconnection points for renewable energy. According to the report, released on June 6, these options are more sustainable than reconfiguring CFPPs to burn alternative fuels such as biomass, ammonia or hydrogen.

The majority of CFPP retrofit projects to date have followed the coal to natural gas pathway, reads the report. “Natural gas burns more cleanly than coal but still emits unacceptable levels of emissions when combusted.”

Repowering existing coal asset fleets potentially saves up to 35% of upfront costs compared to equivalent new clean energy plants, claims the Repower Initiative. This will enable countries to capitalise on existing infrastructure, such as turbines or grid connectors.

The whitepaper proposes options such as converting these CFPPs into advanced nuclear, geothermal and thermal energy electrical heat stores. They could also be used as grid interconnection points for new renewable energy generation. 

According to the authors, an average repurposed plant could save up to 200 million tonnes of carbon dioxide emissions, equivalent to taking 44.5 million cars off the UK roads for a year. 

See also: Retiring coal-fired power plants is the 'mother of all transitions': MAS

The US and Poland are the first to pursue coal-to-nuclear repowering projects, in the US with TerraPower Natrium project in Kemmerer, Wyoming; and in Poland with the ZE PAK project at Pątnów. Serious feasibility studies are ongoing in countries across Eastern Europe, as well as in Canada and China, reads the report.

The Repower Initiative began in 2019 and is a global non-profit initiative dedicated to the repowering of coal power plants. Led by London-based consultancy Quantified Carbon. Among others, Repower Initiative received philanthropic funding from the Clean Air Task Force, which in turn received a philanthropic grant from HSBC.

The Repower Initiative will initially focus on China, Indonesia, India and South Korea, prioritising countries targeted by the Asian Development Bank’s Energy Transition Mechanism (ETM) and Just Energy Transition Partnerships (JETP).

See also: One of MAS’s two coal plant retirement pilots provides first update since COP28

According to the Repower Initiative, the novel use of CFPPs will allow companies, utilities and other organisations to avoid “complex, time-consuming processes” linked to securing land, construction permissions and grid access. It will also benefit local communities who have historically relied on coal, they add, by creating opportunities for workers to retain their livelihoods.

Since 2019, more than 500 new coal-powered units have come online globally, and over half of all coal plant capacity is under 15 years old. CFPPs are the largest single contributor of greenhouse gases globally, but many countries remain highly reliant on them to power their economies. “Their closure in the near-term, ahead of their planned lifespans would involve stranded investment as well as significant economic, technical, societal and political difficulties,” says Repower Initiative.

The early retirement of CFPPs has been a focal point for sustainability groups and multilateral development banks in the region. In December 2023, the Monetary Authority of Singapore (MAS) launched the Transition Credits Coalition (Traction) and two pilot projects in the Philippines to test the use of “high-integrity transition credits” in transactions for the early retirement of CFPPs.

These so-called transition credits are generated by retiring a CFPP early and replacing it with clean energy sources. With the funds raised from selling these offsets, this could incentivise plant owners to retire their assets early and replace them with renewable energy.

In April, one of the two pilot projects said the plan could avoid up to 19 million tonnes of carbon dioxide emissions. Parties involved said the closure of the Philippines’ South Luzon Thermal Energy Corporation (SLTEC) coal plant in 2030, 10 years ahead of its scheduled retirement, would not be possible without carbon finance. They aim to finalise buyer discussions and reach a financial close for the world’s first coal-to-clean carbon credit transaction by 2025.

See also: MAS launches coalition, two pilots to test 'transition credits' for early retirement of coal plants

Repower Initiative’s whitepaper outlines four key recommendations for financiers and policymakers: embrace emerging landscape of clean technologies, integrate repowering in CFPP refinancing programmes, prioritise investments in clean capacity and redirect subsidies supporting CFPPs, and map all CFPP sites and evaluate repowering options.

Quantified Carbon founder Staffan Qvist says: “We are excited to release our first whitepaper and look forward to working with HSBC to move the idea of repowering from extensive research to application, sharing our knowledge and experience with the financial services industry.”

Qvist, who started the Repower Initiative with global climate policy expert and Member of the UK’s House of Lords Bryony Worthington, adds: “We hope to increase understanding of the potential that repowering pathways have for accelerating decarbonisation, as well as to lay the groundwork for the first projects to move forward.”

HSBC global head of sustainability and partnerships Jenny McInnes says the bank is collaborating with several initiatives to support a just transition of the energy sector, “including our involvement in the Just Energy Transition Partnerships in Vietnam and Indonesia”. 

“The Repower Initiative is an exciting partnership that is already beginning to shift the discourse around early-coal retirement and has the potential to be a real game-changer,” adds McInnes. “By identifying sites where repower can reduce costs, deliver reliable energy now and in the future, and support local communities — in the countries and regions where it is needed most urgently — we have the potential to accelerate our transition to net zero.” 

Infographics: Repower Initiative

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