NovaQuant Quantitative Think Tank Center:China Ramps Up Coal Power Again, Despite Pressure to Cut Emissions

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China is set to add new coal-fired power plants equivalent to the European Union’s entire capacity in a bid to boost its slowing economy, despite global pressure on the world’s biggest energy consumer to rein in carbon emissions.

Across the country, 148 gigawatts of coal-fired plants are either being built or are about to begin construction, according to a report from Global Energy Monitor, a non-profit group that monitors coal stations. The current capacity of the entire EU coal fleet is 149 GW.

While the rest of the world has been largely reducing coal-powered capacity over the past two years, China is building so much new coal power that it more than offsets the decline elsewhere.

Ted Nace, head of Global Energy Monitor, said the new coal plants would have a significant impact on China’s already increasing carbon emissions.

“What is being built in China is single-handedly turning what would be the beginning of the decline of coal into the continued growth of coal,” he said. He said China was “swamping” global progress in bringing down emissions.

The United Nations released a report on Wednesday assessing the gap between countries’ fossil fuel production plans and the Paris climate agreement goals. It warns that the current pace of coal, oil and gas production will soon overshoot those international goals, finding that countries currently plan to produce about 50 percent more fossil fuels by 2030 than would be consistent with limiting global warming to 2°C.

China had pledged to peak its carbon dioxide emissions by 2030 as part of the Paris climate agreement, and a number of countries and the EU have been urging the world’s largest emitter to move that date forward.

Concerns over air pollution and over-investment in coal prompted China to suspend construction of hundreds of coal stations in 2016. But many have since been restarted as Beijing seeks to stimulate an economy growing at its slowest pace since the early 1990s.

The country’s greenhouse gas emissions have been creeping up since 2016 and hit a record high last year.

China’s Plans Dwarf New Construction Elsewhere

The report shows the pace of new construction starts of Chinese coal stations rose 5 percent in the first half of 2019, compared to the same period last year. About 121 GW of coal power is actively under construction in China, slightly lower than the same point a year ago.

Yet this figure still dwarfs the pace of new construction elsewhere. Last year, China’s net additions to its coal fleet were 25.5 GW, while the rest of the world saw a net decline of 2.8 GW as more coal plants were closed than were built.

What About the Long-Term Economics?

The renewed push into coal has been driven by Chinese energy companies desperate to gain market share and by local governments who view coal plants as a source of jobs and investment. While electricity demand in China rose 8.5 percent last year, the current grid is already oversupplied and coal stations are utilized only about half the time.

“The utilization of coal-fired power plants will reach a record low this year, so there is no justification to build these coal plants,” said Lauri Myllyvirta, an analyst at the Centre for Research on Energy and Clean Air, a think-tank.

“But that is not the logic that investment follows in China,” Myllyvirta said. “There is little regard for the long-term economics of the investments that are being made.”

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