Climate change: China approved most coal power plants since 2015 last year, making environmental goals harder, research shows

Local governments gave permission for 106GW of new coal power capacity in 2022, the most since 2015, and four times the amount a year earlier
‘China continues to be the glaring exception to the ongoing global decline in coal plant development,’ says analyst

Business of climate change

Yujie Xuein Shenzhen

Published: 2:28pm, 27 Feb 2023

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China embarked on a massive expansion of its coal-fired power capacity in response to last summer’s historic power crisis, approving the equivalent of two large coal power plants per week, new research has found.

The rapid coal buildout has been happening at the same time as China speeds up installation of renewable power to meet its decarbonisation goals. That raises concerns that many of the new coal power plants will be largely redundant, acting merely as spare capacity and placing a huge financial burden on the nation’s power generators, according to climate analysts.

Chinese local governments gave permission for 106 gigawatts (GW) of new coal power capacity in 2022, the most since 2015, and four times the amount a year earlier. It was equivalent to 100 large coal-fired power plants, according to a report by the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM).

Construction of some 50GW of coal power capacity got under way in China last year, a more than 50 per cent increase from 2021 and six times that in the rest of the world combined, according to the report.

“China continues to be the glaring exception to the ongoing global decline in coal plant development,” said Flora Champenois, a research analyst at GEM. “The speed at which projects progressed through permitting to construction in 2022 was extraordinary, with many projects sprouting up, gaining permits, obtaining financing, and breaking ground apparently in a matter of months.”

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Such speed leaves little room for proper planning or consideration of alternatives, added Champenois. It also makes the country’s goals of reaching peak coal use by 2025 and net-zero greenhouse gas emissions by 2060 much harder to achieve.

“If China is going to meet its climate commitments, as we expect, these new coal power plants are going to end up as short-lived and under-utilised malinvestments,” said Lauri Myllyvirta, lead analyst at CREA.

The massive new wave of coal power plants appears to be a reaction to power shortages last summer caused by a historic drought and heatwave. The blackouts hit several of China’s most important manufacturing hubs including Sichuan, Zhejiang, Anhui, and Jiangsu provinces, forcing them to halt production.

Though it is making big strides in installing renewable energy such as hydro, wind, and solar, China has faced a long-term structural issue in its power infrastructure. The country’s power system remains dependent on coal to meet peak electricity peak needs and manage the variability of demand and clean power supply.

Investments in China’s electricity infrastructure have also lagged behind growth in consumption, making it harder for the power sector to transition away from fossil fuels to clean energy.

The addition of new coal-fired capacity does not necessarily mean that coal use or carbon dioxide emissions from the power sector will increase in China. The rapid growth of clean power installation could drive the use of coal power into decline, according to CREA and GEM.

In any case, China’s climate targets will be harder and costlier to achieve. The owners of the hundreds of new coal-fired power plants will want to protect their assets and avoid a rapid coal phase-out, according to the report.

“To meet China’s goal of [peak carbon dioxide] emissions, the most urgent milestone is to scale up investments in clean power generation to cover all of power demand growth, which means declining demand for power generation from coal,” said Myllyvirta at CREA.

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