The vast majority of new coal-power plants being planned will struggle to make back their upfront costs, including all of those under construction in China, according to a new report by an independent think-tank.

It is calculated that 92 per cent of facilities proposed or under construction globally would cost more to build than the future cash flow they would generate, according to research from Carbon Tracker, even under a “business as usual” scenario where countries implement fewer carbon emissions restrictions and miss Paris climate accord targets.

China leads the field with plans to add 187GW of coal-power capacity to the existing supply of more than 1,000GW. India follows with 60GW in the pipeline, compared to current capacity of 248GW.

Indonesia, Vietnam and Japan make up the remainder of the five Asian countries that are responsible for 80 per cent of the world’s planned new coal plants, according to the report. Together they are set to build more than 620 new units with capacity of more than 300GW.

The report finds that the majority of global coal operations could be replaced by renewable energy with an immediate cost saving. By 2026 almost all coal plants will cost more to run than building and running new renewable capacity. The calculations are based on falling renewable energy costs and a rise in the cost of debt.

Even on a 5 per cent reduction on its conservative base assumption, the report shows global coal unprofitability would almost double to 52 per cent by 2030 and rise to 77 per cent by 2040.

This raises the probability that the $220bn worth of coal-power plants worldwide will be among the hundreds of stranded assets that the International Energy Agency defines as those that are cheaper to shut down.

The total cost of subsidising these plants could be as high as $150bn, according to Carbon Tracker estimates, in a sector dominated by government backing.

As well as building more coal-power plants than any other country, China is also leading the way on renewables growth.

China aims to hit net zero carbon emissions by 2060, but its CO2 output can continue to increase until a peak in 2030 under its current climate plans. President Xi Jinping said in April that the government would strictly control coal capacity under the 14th Five Year Plan, running from 2021 to 2025, before moving to “phase it down” in the following five years.

In line with these goals, the country doubled its installation of windpower in 2020 compared to the year before, with 52GW of new capacity brought online, according to the Global Wind Energy Council industry group; new solar capacity was the second-highest on record last year at 48GW.

At the same time as the economics of future coal plants is coming under pressure, the Chinese government has acted to reduce thermal coal prices, which hit a record on the futures market in May. Thermal coal imports in May climbed 5 per cent on the year before to an annual rate of 110m tonnes, according to the Chinese National Bureau of Statistics.

The existing coal-power pipeline in China was “not compatible” with its net zero goals, according to Catharina Hillenbrand von der Neyen, co-head of research at Carbon Tracker. Even existing coal-power plants were not being used at full capacity, she said. “If you build it up now and you get substandard [use], you’re already in the game of losing money.”