CHINA STOPPING WORK ON 85 COAL-FIRED POWER STATIONS

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17 january 2017

4C Note: On January 18, Lauri Myllyvirta, representing Greenpeace, sent us, via the CAN-E network, the following update on this story:

"Hi all,

"as many of you have seen, over the past few days the Chinese energy regulator rolled out orders to 13 provinces to suspend a total of 104 coal-fired power plant projects with a total capacity of 120GW. The most significant things here, compared with earlier policies, are that the projects to be suspended are now named instead of stating broad rules or principles
-it turns out that almost half of the projects, 54GW, were already under construction. While it was already clear that very few new projects would go into construction, there was no telling the vast under construction pipeline would be curtailed so significantly
-in addition, 18GW of planned projects in so-called western coal power bases - gigantic coal industry complexes meant to export power to the eastern provinces - and 10GW of combined heat and power projects got axed. We had expected these projects to be able to still move ahead.

"Furthermore, we can expect some more suspensions, because 1) the total suspended capacity of 120GW is still short of the 150GW targeted in the electricity five-year plan that these orders are implementing, and 2) several provinces that were given a "red light" for coal power expansion last year are not covered by the orders that have come out to date."

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China halts construction of 85 coal-fired power stations

by Angus Grigg, Financial Review, January 17, 2017

China has halted construction and planning for 85 coal-fired power stations across the country, as Beijing grapples with excess electricity capacity and seeks to limit fossil fuel consumption.

The announcement by the National Energy Administration covered only 13 provinces, suggesting further suspensions were possible when the other 18 mainland provinces were included in the plan.

"We expect more suspensions," said Zachary Davies Boren from the Energy Desk at Greenpeace.

Beijing is also seeking to limit the mining of coal in an effort to reduce over-capacity and return the sector to profitability by boosting prices. Shanxi Province, China's top coal producer, has committed to cutting capacity by about 2 per cent this year, a similar level to last year.

This followed coal production in the province declining by 143 million tonnes or about 14 per cent last year.

Rising imports


These cuts boosted profits for Australian coal producers last year and indications are that the production declines will not be reversed this year.

After two years of declines, China's overall coal imports rose by 25 per cent last year.

As part of China's 13th Five-Year Energy Plan, released on January 5, Beijing has committed to cap coal generation capacity at 1100 gigawatts (GW). While this figure is 20 per cent above capacity now, it is below the 1250 GW which was scheduled to be built.

Yuan Jiahai, a researcher at the North China Electric Power University, said the suspension of coal-fired power plants showed the central government was serious about halting unnecessary construction.

"This shows they are making concrete efforts to cut over-capacity," Mr Yuan said via phone.

Overcapacity


Mr Yuan estimates as much as 20 per cent of the capacity at China's coal-fired power stations was not used last year.

As part of the new five-year plan, Beijing aims to limit overall energy consumption growth to 2.5 per cent annually. This is 1.1 percentage point lower than growth during the previous five-year plan.

The latest plan aims to bring coal's share of the energy mix under 64 per cent by 2020, from 68 per cent now. The share taken by renewable energy, including hydro and nuclear power, will rise to 31 per cent from 28 per cent. Natural gas will account for 5 per cent.

After decades of denying China's poor air quality was a problem, the central government declared a "war on pollution" in 2014.
'Best efforts' on emissions

This has seen the government ramp up efforts to cut coal use and promote renewable energy, while shutting down outdated and heavy-polluting factories.

China has also become a global leader in the fight against climate change and has pledged to maintain its commitments from the 2015 Paris climate change talks, even if the United States backs out under President-elect Donald Trump.

Under this deal between Beijing and Washington, the Obama Administration pledged to cut US emissions by 28 per cent from 2005 levels by 2025, largely by placing tighter restrictions on coal-fired power plants.

In return, China said it would make its "best efforts" to ensure its emissions peaked by 2030 and that 20 per cent of its primary energy consumption came from renewable sources by 2020.

This commitment was initially announced in a Sino-American climate change agreement signed in November 2014 during a visit to Beijing by President Barack Obama.


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