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The coronavirus has proven that renewables are cheaper and present a smaller risk to investors, experts have claimed, and it is therefore impossible for the coal industry to recover. The industry was under pressure before the pandemic as alternatives became cheaper and climate activism and divestments increased. The coronavirus sped up the coal industry's fall by strengthening health concerns and cutting billions from the market valuations of the largest coal miners.
Demand for electricity fell as the pandemic began to spread across the world. This forced coal mines to shut down, while renewable alternatives remained open as they are cheaper than coal-based electricity. Coal imports to the EU have since declined by 66% - the lowest level in 30 years. The US are also expected, for the first time, to use more renewable than coal-based energy this year. By 2025 coal use could fall to only 10% within the country, as more plants continue to close or be replaced by renewables or gas.
Since the pandemic began, Portugal and the UK have both gone approximately two months without coal. Sweden and Austria have closed their last coal plants and Spain and the UK are planning on closing plants or phasing out coal sooner than planned. This means that the worst-case scenario of climate change can be avoided, as it is based on the continued growth of the coal industry.
Poor economic incentives related to investments in coal and climate strikes have discouraged investors from funding coal projects. Some, like Blackrock and Standard Charter, have even blacklisted the coal industry. Consequently, thermal coal price has fallen by 30% and the sector has become unprofitable. This has caused multiple closures of plants and layoffs.
All of this is good news for the environment, but experts warn against premature celebrations, as more divestments from coal and more investments in renewables are needed to make the reduction in coal use permanent.