How To Retire Early

The report argues that coal is no longer the cheapest power source and that a significant portion of the global coal fleet is now uncompetitive compared to new renewables with storage. It proposes a three-part approach—refinancing, reinvesting in clean energy, and providing transition financing—to overcome the barrier of legacy contracts and noncompetitive tariffs. The authors suggest that by 2025, 78% of the global coal fleet will be uncompetitive, creating an opportunity for net financial savings of over $107 billion. The report details specific financial instruments, such as ratepayer-backed securitization and carbon bonuses, and provides regional analyses for the US, EU, China, and India.

• A significant and growing share of the global coal fleet is economically uncompetitive compared to new onshore wind or solar PV combined with battery storage. In 2020, 39% of the world's existing coal capacity was uncompetitive, a figure projected to rise to 56% in 2022 and 78% by 2025.
• The transition from coal to clean energy could move from a net cost to a net saving for society within a few years. The theoretical net cost of completing the transition in 2020 was $128 billion, but this is expected to drop to nearly zero by 2022 and result in net financial savings of over $107 billion by 2025.
• The primary barrier to faster coal phaseout is that 93% of global coal plants are shielded from market competition by long-term contracts, power purchase agreements (PPAs), or noncompetitive tariffs, which lock customers into paying for expensive power.
• The report proposes a three-part integrated approach to accelerate phaseout: (1) refinancing to lower customer costs and free up capital, (2) reinvesting that capital into clean energy to replace coal returns, and (3) providing transition financing to support coal workers and host communities.
• For coal assets that remain competitive, the report suggests two concessional finance tools: 'carbon bonuses' (payments for each ton of emissions abated) and debt forgiveness, both of which should be allocated via competitive reverse auctions to maximize emissions reductions.
• In the United States, 79% of the 236 GW coal fleet was uncompetitive in 2020, and phasing these out could save customers up to $10 billion annually.
• In the European Union, 81% of the 140 GW coal fleet was uncompetitive in 2020, with this reaching 100% by 2025, potentially generating $21 billion in annual savings by that date.
• In China, the share of uncompetitive coal plants is projected to grow from 42% in 2020 to 94% by 2025, with potential annual savings increasing from $12 billion to $86 billion over that period.
• In India, 17% of the coal fleet was uncompetitive in 2020, rising to 85% by 2025, with annual savings projected to grow from $2 billion to $17 billion.

APA

RMI (2020). How To Retire Early. https://rmi.org/app/uploads/2021/03/rmi_how_to_retire_early.pdf

Chicago

RMI. How To Retire Early. 2020. https://rmi.org/app/uploads/2021/03/rmi_how_to_retire_early.pdf.

Wikipedia

{{cite report |author=RMI |title=How To Retire Early |date=June 2020 |url=https://rmi.org/app/uploads/2021/03/rmi_how_to_retire_early.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2020how, author = {{RMI}}, title = {{How To Retire Early}}, institution = {RMI}, year = {2020}, month = jun, url = {https://rmi.org/app/uploads/2021/03/rmi_how_to_retire_early.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }