Global Energy Monitor
  • Lauri Myllyvirta (CREA), Xinyi Shen (CREA), Xing Zhang (CREA), and Caitlin Swalec (GEM)

Key findings

  • Coal power plant permitting accelerated in the first six months of 2022, demonstrating increased government support for expansion. However, announcements of new projects, construction initiations and completions slowed down, indicating a waning appetite among power generators. Thermal power generation has been steeply loss making since early 2021.
  • Steel companies have accelerated investments in new electric arc furnace capacity which will help the sector absorb more scrap steel and support peaking CO2 emissions from steelmaking.
  • Investments in wind and solar power have expanded rapidly, approaching the market size needed to peak and reduce CO2 emissions.
  • Investments in both new coal-fired power plants and in coal-based ironmaking capacity (blast furnaces) continue at a high level that is not aligned with Chinaʼs carbon goals. The most likely outcome is the build-up of excess coal-based capacity, and falling utilisation, rather than increased emissions.
    • 15 gigawatts (GW) of new coal-fired power capacity was permitted in the first half of 2022, an uptick compared with last year but less than in 2020.
    • 30 million tonnes per annum (Mtpa) of new blast furnace capacity was announced in the first half of 2022, the largest amount for the first half-year since 2019.
  • New investments in coal-based power and steelmaking capacity in the first six months of 2022 will result in $8.5 billion (CNY 82 billion) and $15-22 billion (CNY 100-150 billion) in stranded capacity, respectively, if Chinaʼs low-carbon transition is successful. The presence of large amounts of newly built coal-based capacity complicates the transition economically and politically.

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