Coal Is Poised for a Comeback in China

China is building so much coal power that it more than offsets the decline elsewhere.

Source Qilai Shen/Bloomberg via Getty

Why you should care

The Middle Kingdom is increasing its coal capacity — by a lot.

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Around the world last year, coal power started to decline: More plants were closed than were built and the globe’s coal power capacity went down by 2.8 gigawatts.

But that’s about to change, and it all has to do with China. In a break with the global trend, China added 25.5 gigawatts to its coal capacity last year. And it’s due to ramp that up, as the world’s biggest energy consumer ignores global pressure to rein in carbon emissions in its bid to boost a slowing economy.

China is building or preparing to build 148 gigawatts of new coal-fired plants, equivalent to the EU’s entire coal capacity.

That’s according to a report from Global Energy Monitor, a nonprofit group that monitors coal stations. The current capacity of the entire European Union coal fleet is 149 gigawatts. While the rest of the world has been largely reducing coal-powered capacity over the past two years, China is building so much coal power that it more than offsets the decline elsewhere.

Ted Nace, head of Global Energy Monitor, says the new coal plants will 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 says, adding that China was “swamping” global progress in bringing down emissions.

Concerns over air pollution and overinvestment 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.

Pressure has been increasing on China, the world’s largest emitter of greenhouse gases, to reduce emissions, which have been creeping up since 2016, and hit a record high last year.

China has pledged to peak its carbon dioxide emissions by 2030 as part of the Paris climate agreement. However, a number of countries including the EU, have been urging China to move that date forward.

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

The renewed push into coal has been driven by Chinese energy companies desperate to gain market share and by local governments that 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 used 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,” says 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.… There is little regard for the long-term economics of the investments that are being made.”

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By Leslie Hook

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