Five Asian countries are building out 80% of the world's new coal-fired power plants, according to a new report from an independent financial think tank focused on the energy transition.

China, India, Indonesia, Japan and Vietnam are constructing more than 600 new coal units with a combined capacity of over 300 GW, a June 30 analysis from Carbon Tracker Initiative, concluded. Of those plants, 92% will be uneconomic, even under a business-as-usual case that assumes a higher level of coal use than more climate-constrained pathways. Carbon Tracker is a London-based think tank that analyzes the financial risks of an energy transition.

The report concludes that planned coal construction could lead to $150 billion in value destruction under the business as usual case.

"The vast, vast majority of new coal projects that are currently being proposed is likely to be value destructive — a very bad deal for investors," said Catharina Hillenbrand von der Neyen, head of company research and co-head of research at Carbon Tracker.

The world could replace about 80% of current coal-fired operations with renewables with immediate cost savings, Carbon Tracker concluded. By 2026, the group projects that almost 100% of global coal capacity will be more expensive to run than building and operating new renewables.

Pressure on existing and new coal projects is increasing. The report was released the same day the United Kingdom and Canadian ministers welcomed 10 new members to the Power Past Coal Alliance, a coalition of 133 government and private sector entities aiming to phase out unabated coal power. In addition to financial institutions, utilities and other entities, the new members include the governments of Spain, North Macedonia and Montenegro.

Earlier in June, leaders of the G-7 nations — the U.K., the U.S., Canada, Japan, Germany, France, Italy and the European Union — committed to ending international investments in unabated coal-fired power projects. In March, United Nations Secretary-General António Guterres urged governments, private companies and local authorities to cancel all global coal projects in the pipeline. In mid-May, the International Energy Agency released a roadmap to net-zero emissions that called for the world to end new fossil fuel investments in 2021 and to instead deploy large investments in renewable energy.

However, the IEA's roadmap also said coal "continues to play an important role" in the emerging market and developing economies' electricity generation until 2050. According to the IEA's 2020 report on the coal industry, China accounts for more than half of the coal consumed globally.

In response to the G-7 announcement, World Coal Association CEO Michelle Manook said the trade organization supports an "individual pathways approach" to addressing climate change. For some countries, that will include deploying "clean coal technology as part of their climate change arsenal."

"The focus needs to be on 'phasing in' new technologies, not 'phasing out any fuel source," Manook said. "The debate needs to evolve and move from one which seeks to blame any single provider to one which addresses energy-wide solutions."

However, Hillenbrand von der Neyen, a co-author of the report, said renewables already offer a low-cost alternative to coal generation in the power sector. The co-author added that carbon capture and storage and similar technologies might better suit sectors with hard-to-abate emissions, such as heavy industry.

Authors of the new report utilized Carbon Tracker's Global Coal Power Economics Model, a proprietary tool covering approximately 95% of operating, under-construction and planned coal-fired capacity. The report concludes the relative cost competitiveness of renewables versus coal was "overwhelming" when compared on a levelized cost of energy basis.

The analysis also found that the same five Asian countries leading the build-out of new coal generation also operate nearly three-quarters of existing coal operations, with China accounting for most new coal projects. Around 27% of existing coal-fired capacity is already unprofitable, and 30% is close to breakeven, the report concludes.

Further, Carbon Tracker said around 70% of the global coal fleet relies on some degree of policy support and would likely be otherwise unprofitable. That support could erode as countries strengthen climate change commitments.

"It's actually getting worse and worse and really on a slippery slope," Hillenbrand von der Neyen said of existing coal plant economics. "We see big stranding risks of existing assets on the grounds of cost competitiveness, but also on changing market structures and structural trends."