As much of the northern hemisphere reels under the devastating impact of climate change brought out in clear relief during the summer of 2023, China continues unveiling more coal projects, defying both the government’s plans and the state of the world.
The latest briefing from Global Energy Monitor (GEM) and the Centre for Research on Energy and Clean Air (CREA) shows that in 2023, China has continued a coal power plant permitting spree that started in 2022. The first half of 2023 saw 52 gigawatts (GW) of new coal power permitted, maintaining the previous rhythm of permitting two coal power plants per week. One gigawatt is the equivalent of one large coal power plant.
Coal power plant commissioning also doubled year-on-year, with 17.1 GW added to the grid in the first half of 2023. This is the first time that the results of the accelerated permitting of new projects and restarting of suspended projects in 2020 are seen.
After the permitting spree of the past year, China currently has 243 GW of new coal power plants under construction, or permitted for construction. When plants currently announced or in the preparation stage but not yet permitted are included, this number rises to 392 GW of capacity at 306 different coal power plants. This means that coal power capacity could increase by 23% to 33% from 2022 levels, implying either a massive increase in coal power generation and emissions or a massive drop in plant utilization, implying financial losses and potentially asset stranding.
The analysis shows that none of the official reasons given for new projects pans out: most new projects are in locations where there is no need for new coal power capacity to support grid stability or the integration of variable renewables. The provinces adding large amounts of new coal-fired power are getting most of their added power generation from coal, contradicting the framing of coal power as a "supporting" source for clean energy.
The excessive permitting of new coal capacity points to a lack of enforcement of the government policies that are meant to keep China on track to reach peak CO2 emissions before 2030 and carbon neutrality by 2060.
Lauri Myllyvirta, co-author of the report and Lead Analyst at CREA.“The coal power spree is a last-minute push by China's coal industry to lock in capacity and emissions before China's CO2 emissions are due to peak late this decade. This is happening even as clean energy installations are rapidly expanding. China is on track to start delivering all of electricity consumption growth from solar, wind, nuclear and hydropower, leaving no space for power generation from coal to grow."
Unless permitting is stopped immediately, China won’t be able to reduce coal-fired power capacity during the 15th five-year plan (2026–2030) without subsequent cancellations of already permitted projects or massive early retirement of existing plants. This would make it harder and costlier to implement Xi Jinping's pledge to reduce coal consumption from 2025 onwards, as it would mean leaving much of the expanded coal power capacity heavily under-utilized.
Flora Champenois, co-author of the report and Research Analyst at Global Energy Monitor (GEM), said “China can pick its poison. 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. 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."
