Unlocking Coal Contracts

This report by RMI outlines financial and policy solutions to decarbonize long-term coal power purchase agreements (PPAs), using a representative Indonesian PPA as a case study to demonstrate how innovative financial mechanisms can reduce emissions while maintaining costs for taxpayers and earnings for investors.

• Over 93 percent of coal power is currently protected from competition, largely due to the existence of coal power purchase agreements (PPAs).
• RMI proposes three categories of solutions for decarbonizing coal PPAs based on grid requirements: early termination of the PPA, replacing the coal PPA with a clean energy PPA, or restructuring the PPA to reduce emissions prior to closure.
• The use of coal transition mechanisms (CTMs) can enable decarbonization without increasing costs for taxpayers and customers or reducing investor earnings. Specifically, a blended finance loan creates a transition window for 2034–35, while a managed transition vehicle (MTV) creates a window from 2025 to 2035 and can drive an 80 percent reduction in emissions. Furthermore, combining CTMs with policy changes could increase owner earnings by up to 30 percent and reduce emissions by up to 90 percent.

APA

RMI (2023). Unlocking Coal Contracts. https://rmi.org/resources/unlocking-coal-contracts/

Chicago

RMI. Unlocking Coal Contracts. 2023. https://rmi.org/resources/unlocking-coal-contracts/.

Wikipedia

{{cite report |author=RMI |title=Unlocking Coal Contracts |date=31 July 2023 |url=https://rmi.org/resources/unlocking-coal-contracts/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023unlocking, author = {{RMI}}, title = {{Unlocking Coal Contracts}}, institution = {RMI}, year = {2023}, month = jul, url = {https://rmi.org/resources/unlocking-coal-contracts/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }