China this year has continued a coal spree that started in the summer of 2022, approving more permits for new coal plants, commissioning newly built plants and even bringing long-dormant plants back online despite the approaching 2030 deadline for the nation to reach peak carbon emissions, according to new research.
The country approved permits for 52 gigawatts (GW) of new coal power capacity in the first half of 2023, maintaining the previous pace of approving two plants per week, according to a report published by Global Energy Monitor (GEM) and the Centre for Research on Energy and Clean Air (CREA) on Tuesday.
China also doubled its commissioning of coal plants year on year, plugging 17.1GW into the grid in the first half of the year, according to the report.
Moreover, the report said, most new coal projects are in locations where there is no need for new coal capacity to support grid stability or the integration of variable sources of renewable power like solar and wind – reasons Beijing has cited for its continuing build-up of coal capacity.
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“As the world turns its back on new coal projects, China is making the path towards its energy transition and climate commitments more complicated and costly,” said Flora Champenois, research analyst at GEM and co-author of the report.
The excessive permitting of new coal capacity also points to a lack of enforcement of the government policies that are meant to keep China on track to reach peak carbon emissions before 2030 and carbon neutrality by 2060, according to analysts. The world’s largest carbon emitter, China now relies on coal for more than half of its power generation.
From January to June, construction started on 37GW of new coal power capacity, while 41GW of new projects were announced and in the queue for government approval. Meanwhile, China for the first time restarted suspended projects, reviving 8GW of previously shelved coal capacity in the first half of the year, the report said.
China has 243GW of new coal power plants under construction or permitted after the spree started last summer amid a widespread power shortage. But the number could rise to 392GW at 306 coal-fired plants if the facilities announced this year are included – a 23 to 33 per cent increase from 2022 levels.
“The coal power spree is a last-minute push by China’s coal industry to lock in capacity and emissions before China’s [carbon dioxide] emissions are due to peak late this decade,” said Lauri Myllyvirta, lead analyst at CREA and co-author of the report. “This is happening even as clean energy installations are rapidly expanding.”
Most of the new projects do not meet the central government’s stated requirements for permitting, and the provinces building the most new coal capacity are not using it to support a correspondingly large buildout of clean energy, the report said. Most of the projects are in provinces that have no shortage of generating capacity to meet demand peaks, the authors said.
New coal project activity accelerated most dramatically in the coastal provinces of Jiangsu, Shandong and Hebei, and in the inland provinces of Inner Mongolia, Shaanxi and Gansu, according to the report. Guangdong, which led the charge in 2022, continued initiating and permitting more new projects than any other province, the report showed.
Unless permitting is stopped immediately, China will not be able to reduce coal-fired power capacity before 2030 without subsequent cancellations of already permitted projects or massive early retirement of existing plants, the report said. The surge in new coal capacity could lead to a massive increase in coal power generation and emissions, as well as lower plant utilisation and increased risks of financial losses and stranded assets, according to analysts.
“China is on track to start delivering all of its electricity consumption growth from solar, wind, nuclear and hydropower, leaving no space for power generation from coal to grow,” Myllyvirta said.
“Continuing to permit more coal capacity will either result in massive emissions increases, or plants sitting idle, generating losses, and perpetuating the power system’s dependence on coal,” Champenois said.
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