technology

https://cleantechnica.com/2025/05/21/south-america-sets-historic-benchmark-zero-new-coal-plants-planned/

Chile is perhaps the most instructive case study in this transition. In the last decade, Chile has transformed from a coal-heavy nation to a global leader in renewable energy. This rapid transformation came about through deliberate policy measures including aggressive carbon pricing, strict emission standards for coal plants, and a well-designed renewable energy auction system. The economic advantage of renewables quickly became apparent, as Chile’s Atacama Desert, one of the sunniest places on Earth, became host to massive solar projects providing electricity at record-low prices. By 2024, Chile’s reliance on coal had dropped dramatically, with coal now accounting for less than 20% of total electricity generation. Furthermore, Chile implemented innovative financial mechanisms to facilitate early retirement of coal plants, such as blended finance schemes supported by international lenders. These measures have proven highly effective, allowing coal plants to shut ahead of schedule, accelerating the nation’s transition to renewables.

Colombia’s experience illustrates another aspect of coal phase-out — the management of a “just transition.” With coal exports central to Colombia’s economy, the domestic political landscape posed significant challenges. Despite this complexity, Colombia joined the Powering Past Coal Alliance in 2021, sending a strong international signal that the era of coal power was ending. The government under President Gustavo Petro, elected in 2022, explicitly committed to winding down coal power and mining operations, albeit with careful attention to workers and communities dependent on coal-related employment. Plans are now in place to gradually retire Colombia’s few remaining coal power plants, with a particular focus on developing alternative economic activities such as renewable energy projects, agriculture, and eco-tourism to replace coal mining and related sectors. Colombia’s ongoing transition highlights the crucial importance of incorporating social and economic dimensions into the decarbonization process, ensuring no community is left behind.

The broader factors underpinning South America’s remarkable transition away from coal include robust economics, international climate commitments, effective environmental activism, and geopolitical shifts in energy finance. Renewable technologies, especially solar and wind, have plummeted in cost, making them unquestionably more competitive than coal across the continent. Simultaneously, international financial institutions, previously critical sources of coal plant financing, have largely withdrawn from coal projects. China’s decision in 2021 to cease funding overseas coal power was particularly impactful, as several planned South American coal projects relied on Chinese financing.