“Subcritical” coal-fired power stations are most at risk of becoming stranded assets, with close to 90 per cent of Australia’s power stations falling under this category, according to new research from the Stranded Assets Programme at the University of Oxford’s Smith School of Enterprise and the Environment.

According to the report 75 per cent of the world’s coal power capacity is subcritical – the least efficient form of coal-fired generation, with the average subcritical power station requiring 67 per cent more water and 75 per cent more fuel than the latest power station technology.

Australia was the worst performing in the world with the highest SCPS carbon intensity out of any country, including China, India, the US, EU and Indonesia. Close to 90 per cent of Australia’s coal fired generation capacity was subcritical, with most power stations older than 25 years.

To limit emissions to a level consistent with limiting average global temperature rise by 2°C, 25 per cent of the world’s SCPSs would need to be switched off, the report said. Subcritical power stations are more vulnerable to policies regulating carbon emissions, as well as air pollution, such as the emissions of particulate matter, NOx, SOx, and mercury, the report said.

“There is a strong case for investors to evaluate the risk of companies exposed to the least efficient coal plants, as these assets are at the greatest risk of becoming stranded due to a wide range of environmental and social factors,” lead author and director of the Stranded Assets Programme Ben Caldecott said. “Our research will help investors decide how to screen, engage with, or even divest from exposed companies.

“Subcritical plants are typically older and more expensive to operate. Consequently, closing these plants down may represent a sound choice for budget-constrained policymakers looking for cost-effective ways of tackling pollution.”