In most emissions forecasts and scenarios, the inertia of the electricity sector only plays a role in so far that scenarios that act later tend to have higher economic cost. This is in parts due to the stranding of ‘dirty’ infrastructure investments. Even though it is widely acknowledged that the effects of such stranding on the feasibility and cost of environmental policies are significant they are rarely made explicit in most of the applied scenarios. This paper introduces a methodology that extracts the implicit amount of new ‘dirty’ capacity that is added in every year to the global energy infrastructure capital stock in any given scenario. It furthermore allows us to then calculate the amount of capacity that would need to be stranded either via early retirement, lower utilization, or retrofitted efficiency technology in every year for the scenario to be in line with its emission forecast. We find that scenarios that assume significant additions to the fossil fuel powered generation infrastructure over the coming 15 years but still meet 1.5 and 2 degree Celsius warming targets experience a high level of asset stranding. Not only will assets have to be retired much earlier but also the utilization rates of operating assets tend to be much lower in such scenarios then in scenarios that don’t add much ‘dirty’ capacity over the coming decades. Our findings have implications for investors and policy makers who might want to look further into the better utilization of existing fossil-fuel assets instead of promoting additions to this capital stock.


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