A massive retirement of coal-fired power plants looms around the world.

The resulting 'upgrade cycle' presents a once-in-a-generation opportunity to make real progress against climate change. Best of all, the opportunity is being offered on a silver platter. The real question is, what energy source will be ready to replace coal-fired power?

Natural gas and renewables like wind, solar and geothermal are available now. By contrast, carbon capture and storage won't be available until well after 2020. By then the 'replacement cycle' will be largely over.

Europe will be the first forced to choose a replacement, its coal-fired power capacity is rapidly reaching retirement age. An alternative will need to be found quickly, as a steep decline in energy is set to occur as plants are retired and replacements found. By 2020, this replacement cycle will be nearly half-way over. This hobbles latecomers looking to take over,like carbon capture.

The United States is a bit further back in the replacement cycle. Even so, a huge number of coal-fired plants there will start hitting 40 years of age in 2010.

Australia is in much the same position. Starting in 2010, much of the country's clapped-out coal-fired plants will reach 40+ years of age. They will need replacement and carbon capture won't be ready. Another technology will have to be chosen. The only other choice is to allow old, dirty plants to continue to operate, but that could prove politically unpalatable.

Now, consider the potential replacements.

Renewables are on a rapid downward price curve due to innovation, aggressive investment and rapidly-accumulating experience.

Geothermal and wind energy are already cheaper than carbon capture and storage. Concentrating solar thermal power will be possible shortly. New price milestones are reached almost daily in solar photovoltaics. These cost-cuts are expected to continue, and even accelerate.

That simply isn't the case with carbon capture. It's forecast to start off expensive and only slowly decline in price.
 
This 'power of compounding' differential between renewables and carbon capture presents a huge handicap for coal as a cost-effective future energy source. Every month that goes by these dynamics will become more apparent, assuming the marketplace is allowed to do its work free from interference of vested interests.

DESERTEC-Australia recommends Australia invest in replacing coal-fired plants with renewables backed up by natural gas between now and 2020. This will provide the lowest-cost, most reliable, most environmentally-friendly, most secure combination of technologies for meeting Australia's electricity needs during the medium-term. Should carbon capture arrive as promised, it can compete on merits. But Australia shouldn't wait on a unproven technology with continually receding timelines.

Stewart Taggart is a director of Acquasol Infrastructure Ltd., a developer of environmentally-friendly power and water solutions building a municipal-scale solar desalination plant in South Australia's Upper Spencer Gulf. Stewart is also founder/administrator of DESERTEC-Australia, DESERTEC-USA and DESERTEC-China. DESERTEC promotes the concept of "Clean Power From Deserts."