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Over 100 global financial institutions are exiting coal, with more to come

Report • •
Over 100 global financial institutions are exiting coal, with more to come

Today, over 100 globally significant financial institutions have divested from thermal coal, including 40% of the top 40 global banks and 20 globally significant insurers.

Momentum is building. Since January 2018, a bank or insurer announced their divestment from coal mining and/or coal-fired power plants every month, and a financial institution who had previously announced a divestment/exclusion policy tightened up their policy to remove loopholes, every two weeks. In total, 34 coal divestment/restriction policy announcements have been made by globally significant financial institutions since the start of 2018. In the first nine weeks of 2019, there have been five new announcements of banks and insurers divesting from coal. Global capital is fleeing the thermal coal sector. This is no passing fad. Since 2013 more than 100 global financial institutions have made increasingly tight divestment/exclusion policies around thermal coal.

Market analysts predict the continued growth of renewable energy in the European Union over the next two decades, but in order to become a reality this trend will require support from clear, sustainable policies, private funding and network integration solutions. This is particularly important for larger economies such as the UK, France and Germany if they want to get to lead countries such as Denmark. How will the future growth of wind and solar energy be funded? Many European countries have previously provided precious cash flows for renewable energy projects through preferential tariffs and green certificate schemes.

How will the variable electricity sources such as wind and solar power be integrated into the network? Several European countries have already achieved a share of the wind and solar markets over the projected by the BNEF and IEA electricity for the continent as a whole by 2040 - at 50% and even above that level. Achieving renewable energy sources across the continent will require a methodical approach to increase network flexibility, a buffer for wind and solar energy variability. They must develop markets that support investment in electricity demand and storage as well as domestic and cross-border transmission. The trend patterns (for RES development) in the energy mix may be visually exciting, but they do not capture these vital issues behind the scenes, IEEFA notes.

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