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We take a look at ENGIE’s global coal phase-out, identifying fossil gas conversion risks and a lack of Paris Agreement alignment.
Full analysis is available in the downloadable PDF.
Utilities Beyond Fossil Fuels
Evaluation of ENGIE’s global coal phase-out reveals a lack of Paris Agreement alignment.
4 Feb 2021
Executive summary
Key findings
With countries across the world pledging to reach net zero emissions by 2050 and the need to limit global warming to 1.5°C, the full decarbonisation of the electricity sector has never been so essential and urgent.
While governments are creating the regulatory environment necessary to achieve these objectives, this is not the only solution. The private sector must also accept responsibility and take affirmative action to adapt its objectives, behaviours and impact.
Ember’s report published today examines ENGIE’s global strategy to transition from coal-fired power generation and assesses the associated limitations and risks.
ENGIE is a France-based global energy company that employs 170,000 people globally and is the world’s largest independent electricity producer. It has approximately 100GW of installed electricity generation capacity. ENGIE announced in 2016 that it would stop producing electricity from coal. At that time, coal accounted for 15% of its electricity mix compared to around 4% today. Fossil gas is its primary electricity fuel source at 54%.
ENGIE’s strategic reports, submissions and announcements have been analysed in the context of their regulatory, economic and climate risks and impact.
- ENGIE announced in 2016 that it would stop producing electricity from coal, however it still does not have confirmed shutdown dates for 70% of its remaining coal-fired power fleet.
- ENGIE’s goal is to have renewables providing 58% of its total power generation by 2030.
- ENGIE intends to convert coal-fired plants to fossil gas and biomass as a key component of its global electricity transition.
- ENGIE may source shale gas with high levels of methane emissions for its fossil gas plants.
- ENGIE’s Science Based Target initiative (SBTi) accreditation is for 2°C. This is not aligned with the Paris Agreement objective of well below 2°C and, in October 2019, the SBTi stopped accepting target submissions for 2°C.
- Our assessment of the current outlook for climate policy, investor preferences and the cost of renewable electricity alternatives, such as wind and solar, identifies key risks in ENGIE’s transition strategy.
To limit global warming to 1.5°C above pre-industrial levels, the International Panel on Climate Change (IPCC) identifies the need for net zero emissions and a full decarbonisation of electricity generation by 2050. In the power sector, this means that OECD nations need to end coal use for electricity production by 2030 and coal-fired power stations must be shut down in the rest of the world by 2040.
The absence of a comprehensive coal phase-out schedule means that ENGIE’s current strategy is not aligned with the objectives of the Paris Agreement. To mitigate its risks and meet its climate obligations, ENGIE needs to urgently address its coal phase-out plan and escalate investment in low-carbon electricity rather than commit to the deployment of fossil gas and biomass.
“ENGIE announced in 2016 that it would stop generating electricity from coal, but it still has no confirmed closure dates for 70% of its remaining coal-fired power plants. And while ENGIE aims to make up 58% of its electricity generation by 2030, it also intends to convert coal-fired power plants to fossil gas and biomass. This strategy comes with financial and environmental risks.”
Supporting materials
Acknowledgements
Header photo
Smoking chimney against blue sky, Munkkisaari, Helsinki, Finland, Europe
Credit: D.C IMAGES / Alamy Stock Photo
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