Environmentalists are celebrating after plans to build a new coal-fired power station at Kingsnorth in Kent were put on hold for three years.
Energy firm E.On blamed the recession and a fall in electricity demand saying it would not now be needed until 2016.
Protesters who held a Camp for Climate Change at the site last year said it showed how people could take back the power from corporations and government.
Ben Stewart, of Greenpeace, said it was likely the plant would never be built.
Mr Stewart, one of the so-called Kingsnorth Six who climbed the existing power station in a protest against carbon emissions two years ago, described it as "a really big setback" for E.On and "really good news for the environment".
"As time goes on people get more concerned about climate change, there's more time for renewables to get built and that squeezes out coal," he said.
Ben Stewart believes the chances of a new coal-fired power station being built at Kingsnorth have reduced dramatically
The plant, which has yet to receive government permission, would be the UK's first coal-fired power station to be built for 30 years.
It was to be the first new plant to be fitted with carbon capture storage (CCS) technology.
An E.On spokesman said: "As a group, we remain committed to the development of cleaner coal and [CCS], which we believe have a key role to play alongside renewables, gas and nuclear, in tackling the global threat of climate change, while ensuring affordability and security of energy supplies."
Protect Kent (PK) said E.On's announcement came as its deputy director gave a presentation on CCS to a public meeting in Rochester on "Kingsnorth - the Great Debate".
PK chairman, Richard Knox-Johnston, said: "It was a great meeting and it ended with a bombshell - E.On had announced shelving their plans.
"Everyone in the room was stunned. We had won."
Emma Jackson, of the Camp for Climate Change, added: "E.On are finally recognising that the days of building new coal-fired power stations are over."
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