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By Steve Johnson  

China axes part-built coal power plants

Published on: October 23, 2016 1:41 AM

 

Unprecedented’ move may not be enough to stop country breaking emission quotas China has said it will halt construction work on 30 coal-fired power plants, in what Greenpeace, the environmental group, has described as a “globally unprecedented move”. So far this year Beijing has already shelved or postponed plans for 114 gigawatts of thermal coal power stations, according to Energy Transition Advisors, a London-based consultancy, compared to a total installed capacity of around 900GW, as the Communist party has sought to shift the world’s largest polluter towards cleaner forms of energy and tackle air pollution. However, this would be the first time China has moved to scrap plants already under construction. “Up to now, the Chinese government had avoided interfering in projects that had already been contracted and financed, and where construction had started,” says Lauri Myllyvirta, an energy analyst for Greenpeace in Beijing. “The cancellations will be painful, and entail major commercial losses and disputes. But spending money to complete these unneeded coal plants would have been even more wasteful: it would likely have cost well over $20bn. Now China avoids throwing good money after bad.” The statement from the National Energy Administration says that construction of 30 coal plants with a combined capacity of 17GW will be halted. The plants are all in the 13 Chinese provinces that were told in April not to develop new coal-fired plants. A further 30 plants, 10 of which are under construction, in the west of the country will also be hit by plans to abandon the construction of long-distance transmission lines designed to send their power to coastal regions. However, given the tendency for local governments to ignore attempts by Beijing to crack down on overcapacity in the steel and aluminium industries, at this stage it is not clear whether the edict from the NEA will be acted upon. Even if it is, carbon emissions from China’s coal-fired power sector will rise to levels incompatible with attempts to limit global temperature rises to 2C by 2020, according to research by Energy Transition Advisors. The findings add to fears that China’s large-scale financing of coal plants elsewhere in the emerging world imperils the 2C target, despite president Xi Jinping’s ratification of the Paris climate accord – the culmination of more than 20 years of effort by the UN to tackle global greenhouse gas emissions – last month. Research released earlier this year found that two Chinese policy banks had provided $118bn of overseas energy finance between 2007 and 2014, as much as the World Bank and the Asian, Inter-American and African development banks combined. However, while coal constituted a negligible share of the projects financed by the multilateral lenders, it accounted for 66 per cent of energy-related lending by China. The Energy Transition Advisors’ analysis suggests that China’s domestic coal consumption is also incompatible with efforts to curb climate change, despite Beijing’s efforts to tackle the problem. Coal production fell by a “staggering” 9.7 per cent year-on-year in the first six months of 2016, according to the Institute for Energy Economics and Financial Analysis, a large absolute decline in a country that accounted for 47.7 per cent of global coal production in 2015, according to BP, even if domestic production was partially replaced by an 8.2 per cent rise in coal imports.

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